The current labor market has had an impact on many industries due to its high competitiveness for employers trying to fill roles within their workforce. The construction industry is no different, and our construction-focused team at BerganKDV has been helping our clients navigate the discussion around the current labor market, compensation structures, and strategies for effective recruitment and retention. The challenges may vary, but most clients are experiencing difficulties with the cost to recruit, onboard, and train new employees, and the wage rates for hiring new employees often outpacing the rates paid to existing team members which further complicates an already tricky situation. When having these conversations with clients, we first ask them to consider their culture.
Simply put, workplace culture is powerful. Some of the best-performing contractors we see and have been around are intentional and continue to have a focus on their culture. They have stated values, clear and communicated goals, and show that they care about their people.
Studies continue to show that when people leave one job for another job, pay is typically third on the list of reasons why. The main reason people leave a position is because of their managers and the culture (or lack thereof). We have had plenty of our clients disagree with this concept, stating the only thing construction laborers care about is pay.
While that might seem true, because pay certainly becomes important, especially when culture is lacking, the common root cause for employee departure boils down to how they feel when at work, and culture is the driver behind that. Why would you stay working somewhere that is miserable if you could make a little bit more money somewhere else, with the hope of a better manager and an environment that you feel you are a part of, not just a number? To better evaluate how your organization is monitoring its culture, we recommend considering the following questions:
- Are we doing exit interviews with departing employees and asking them for feedback? Do we really know why they are leaving, or only assuming it is for money?
- How often do our leaders visit job sites and engage positively with team members?
- Are we attracting the best talent?
- What do our competitors say about our crews?
- Are we providing jobs or creating opportunities for careers?
As you build on your culture and assess your managers for not just driving work, but motivating people, having a competitive compensation plan and strategy in place is also important. It helps to recruit the best, boosts retention, and it should create incentives for your people to continue to drive engagement, work efficiently and drive quality results.
How do you know if you’re offering competitive compensation rates? First, you need to determine if you are paying your people market salaries and wages. Benchmarking your wages and salaries is a terrific way to do this. Additionally, we recommend listening to your peers, being observant and absorbing your team’s feedback. Consider asking specific questions about pay in your exit interviews as a way to receive helpful feedback. We believe it is important to have your base salaries and wages at market and make sure you are offering a competitive benefits package. With the base pay and benefits structure in place, there are several items to consider on how you can further incentivize and reward your people. Our teams have assisted several clients recently to help them design robust incentive programs. Here are several incentive ideas that can help increase your employee morale and cultivate a strong work environment.
- Provide wage raises multiple times during the year, not just at yearend or in the spring.
- Adopting a simple bonus plan to further define and clarify how an individual earns their bonus
- Adding or expanding your benefit offerings to include disability, group life, 401(k) plans, PTO/vacation, accident coverage, etc.
- Providing experiences as a reward for bigger goal accomplishments.
- Invest back into your people, such as sending up-and-coming team members through outside leadership training programs.
- Develop an in-house training program and have your best crew members lead training, not only to continue to improve your crew but to allow your best people to be recognized for their knowledge and talent.
- Provide recruitment bonuses to incentivize existing team members to help fill needed positions.
- Explore options to improve hours or provide some flexibility for field labor as an incentive for increased efficiency and quality.
- Do not forget the small things, they matter. Such as team outings, BBQs, and on-the-spot bonuses or handouts (for safety achievements, good behavior, going above expectations, crews hitting targets).
Labor markets will only continue to be challenging and competitive for the foreseeable future. Almost every employer is facing these issues, which emphasizes the need for a standout culture to create a strategic advantage for your organization. By evaluating and continuously improving your culture through employee and peer feedback, offering a competitive compensation plan, and rewarding your employees for great work ethic, you can feel confident that you have established a people-focused workplace that drives growth both professionally and personally. How many of your competitors can say they are doing this?
If you have questions about how to develop a robust workplace culture at your organization, our construction industry experts at BerganKDV can help. Contact us today to further discuss the best options to develop strategy and implement plans to attract and retain the best workforce.