The shortage of construction workers is well-documented, with builders everywhere scrambling endlessly to find good talent. It turns out the most cost-effective approach to finding good employees is to keep and train the ones you have.
The ability to retain good workers pays off in a number of ways, according to 365 Talents, an online platform for HR services.
- It’s far more expensive to recruit, hire and train a new employee – perhaps as much as half the annual salary – than to keep an existing one.
- Long-term employees “contribute to organizational stability, cultural alignment and knowledge-sharing” while frequent departures disrupt processes and harm morale.
- A steady workforce is likely to be safer than one in which people are constantly switching in and out.
- Having employees who are satisfied in their job supports recruitment and hiring; good people want to work for companies that are known to be good places to work.
Despite the way hiring managers might feel about the constant headache of recruitment, the number of construction jobs that need to be filled throughout the United States is consistently lower than the average across all industries. In 2024, there were 3.6 construction job openings for every 100 construction workers – compared to a rate of 4.7 across all industries, according to data from the U.S. Bureau of Labor Statistics.
But this measure of unfilled jobs shouldn’t be confused with turnover – the percentage of workforce that needs to be replaced each year. By some estimates – and they vary widely – turnover across the construction industry in recent years has been as high as 54%.
Knowing that doesn’t make the job of replacing laborers and tradespeople any easier – but it does point to retention as a meaningful strategy.
Various studies – some specific to construction and others more general – have demonstrated the main reasons people leave one job for another. While pay and benefits consistently rank high on any list, the top reason they leave is for better advancement, development and training opportunities.
Other reasons include:
- Escaping a toxic manager.
- Poor company performance and low morale.
- Feeling unheard and undervalued.
- Lack of concern for work-life balance.
- Seeking better pay and benefits.
- Stability.
With this information, what can be done to improve employee retention in construction?
Here’s a short list of action items any construction business can consider, according to a variety of sources, including workforce labor management software company Smart Labor Management:
- Reorganize your thinking and your budget: It’s easy to justify recruiting costs – no matter how high they become. But when money is tight (when is that not the case?) employee retention activities feel like luxuries. Viewing retention as part of your recruitment budget can change the perspective and enable a true cost-benefit analysis of hiring vs. keeping the employees you have.
- Invest in career development: Don’t limit training to safety issues. Consider cross-training employees with new specialties and skills, and providing leadership training to managers. Assign mentors to help newer workers develop their skills, and offer promotions and pay raises based on experience and performance.
- Build a positive culture: A culture of respect, inclusion and teamwork improves employee engagement and retention. Encourage teamwork and open communication, address conflicts quickly and fairly. Provide guidance and support rather than just giving orders. Organize activities that bring the team closer together, like holiday parties and family barbecues.
- Increase job stability: Consider offering multi-project employment contracts instead of hiring separately for each project. The stability can improve satisfaction and increase the consistency of your work from one project to the next.
- Provide recognition: Whether it’s periodic shoutouts for standout performance, celebrating work anniversaries, rewards for meeting goals or anything else, routinely recognizing employees for their commitment and contributions helps workers feel valued and engaged.
- Prioritize safety and good working conditions: Demonstrate concern for employees’ health and well-being by investing in quality tools and protective gear, and ensuring job sites are well-organized and follow safety regulations.
- Seek input: Hold regular meetings to discuss operations and hear concerns and suggestions. Keep employees informed on progress of any initiatives that come out of such efforts.
- Communicate, communicate, communicate: If you look carefully at the points above, effective communication is a thread that runs through all of them. Whatever actions you take to increase engagement and connection with workers will be pointless if you’re not consistent about keeping them in the loop.
- Be consistent: Whatever activities you undertake, follow through and keep at it. Nothing undermines a retention program faster than false starts and a lack of sincerity.
- Improve pay and benefits: Make sure your compensation offerings are at least on par with good companies that do the same work in your area.
Raising base pay rates and sweetening benefits packages might be the most difficult suggestion on this list. That’s why it’s offered as the last suggestion. It matters, but if your compensation offerings are already competitive in your market, it’s not necessarily the most impactful thing you can do to reduce turnover and develop a more stable workforce.
Best Supply has the tools, PPE and equipment your team needs to do its best work – with competitive prices and white-glove delivery to keep your job on time and on budget. Request a quote here.
