Recruiting and retaining employees in the construction industry
INSIGHT ARTICLE |
For the U.S. economy, the positive signs continue: unemployment rates are at historic lows, consumer spending is increasing, the stock market–while volatile at times–continues to set new records and optimism is at an all-time high.
The construction industry is expected to flourish right along with the rest of the economy. According to the Bureau of Labor Statistics, the construction industry added 30,000 jobs in December 2017. Overall, the industry added 210,000 jobs last year, which is a 35 percent increase over the previous year. In addition, construction spending is on the rise. The Commerce Department reported that construction spending was up approximately 2.4 percent in 2017, including a record $1.257 trillion in November.1
The robust economy and the surge in spending are anticipated to boost construction hiring even more in 2018. Not only is the industry expected to create new jobs, it will need to replace an aging workforce, which will begin retiring in record numbers over the next decade.
Replacing retired construction workers has been an issue for some time, and its urgency is somewhat regional in nature. The median age in the Northeast and parts of the Midwest is 47, while half of the workers in states such as Nebraska, Utah and Wyoming are under 38 years old.2
Studies have estimated the industry is only producing one replacement worker for every four workers who leave.3 If this trend continues, it’s expected the industry will face a shortage of nearly two million workers in just the next few years. Uncertainty regarding immigration policies and the estimated 1.3 million undocumented immigrants working in construction could cause those numbers to rise.
So what should contractors do to fill the gap and attract more workers? One of the biggest challenges is capturing the interest of younger people. Overall, society still heavily stresses the value of higher education. As college admission is the prevalent goal for high school students and a principal measurement of achievement, the construction industry often does not have a seat at the table early enough to inform students and their parents about the opportunities in construction trades.
But there are changes which contractors should consider to shift this traditional mindset:
If construction companies want to attract a different and new demographic, they have to re-imagine the needs of that population. That means providing skilled trade workers with competitive compensation and benefit opportunities. Candidates new to construction need to be confident they will get similar leave and group benefits as their college-educated counterparts.
Construction companies should be purposeful in their recruiting efforts. Part of that effort will be identifying the best company representatives to share positive messages about the industry with potential workers, especially those just coming out of high school.
While human resources and corporate recruiters should take part, who is better at sharing positive experiences than a recent, high-performing high school alumnus? Quantifying the benefits of a career in construction is key—work hours, income potential and the opportunity for advancement should not just be discussed, but detailed in collateral material that is provided to candidates. Using these peers to represent the company is one of the best ways to illustrate the value of this type of career and to demonstrate that expensive degrees are not necessarily required for success.
The most cost-effective method to alleviate a worker shortage is to retain the ones you already have. While that’s not always possible—there will always be employees who find reasons to quit—it’s important not to overlook the importance of engaging employees. Yet, on average, only 39 percent of construction firms measure employee engagement.4 Companies that have shown positive steps in retaining employees find ways to frequently (and informally) get employee feedback, host in-house classroom training and even coach employees. While these might not produce instant engagement, it can show employees the company is invested in them and cares about their future with the organization.
While it is not reasonable to shut down a job site without a project-related cause, a bad weather day can serve as an opportunity to host a meeting or provide training. It can provide an opportunity for high-level management to deliberately engage with employees. Purposeful employee engagement activities and career growth communications may deter those employees considering leaving not just the company but the industry.
Regardless of position, employees want feedback on performance and opportunities to enhance their skills and knowledge. Studies have shown that companies that have the highest employee retention rates have committed to rich professional development cultures and have effective performance management processes. Yet 55 percent of contractors do not have any formal processes in place for identifying and developing high-potential employees.5
It’s a critical time
Approximately 89 percent of construction firms report facing talent shortages.6 Talent shortages aren’t unique to construction, and opportunities abound for U.S. workers. As economic trends indicate, the construction industry can expect strong performance for years to come and with that, rewarding careers with competitive pay. It’s time to get that message out to the next generation preparing to enter the workforce. The construction industry will provide them with the benefits, training and investments in performance development that they could expect from a career that typically requires a professional degree. It’s time to rethink the human resource strategy in the construction industry.