As a nation we are experiencing one of the tightest labor markets in modern times, due in large part to demographics. The number of people leaving the workforce (retirements, COVID effects, and the gig economy, to name a few) exceeds the number of people available to fill their vacancies. The construction industry ranks among the top industries disproportionately affected by this tight labor market.
Since the return of World War II veterans and the creation of the GI Bill, the idea that higher education is required for success has steadily increased in the U.S. While this has helped many achieve the “American Dream” it has diluted the emphasis on the path to success through the trades. It is through the efforts of industries, like construction, that this trend is finally starting to reverse, with vocational schools seeing a 16 percent increase in enrollment in 2023 based on data from the National Student Clearinghouse Research Center.
The construction industry has worked hard to educate the public on the benefits of working in the trades, in addition to their efforts in recruiting, training, and retention, which makes losing talent that much more frustrating when it happens. Many of our construction clients cite frustrations around losing team members to their competitors down the street for an extra dollar an hour.
To help stem this tide, here is our best advice to retain the workforce that you have worked hard to build:
#1: Treat your employees as people first.
If you don’t currently connect business problems to people problems, start there. They are ALWAYS connected. Do not read the rest of this list if you are not comfortable with the thought “my business is nothing without our people.”
#2: Tap into their intrinsic motivation.
We easily fall into the trap of thinking that employees are motivated by title, status, and pay. Those are often the reasons cited in exit interviews after resignations. While that may be true in some cases, many people have a natural desire to be intrinsically motivated. They want mastery (I want to be good at my job), autonomy (I want to be trusted to do it well), and purpose (I want to know why my job is important). Assuming you pay fairly and treat people right, if you can tap into this intrinsic motivation, you may be surprised at the outcome.
#3: Divorce yourself of the “everyone is replaceable” mentality.
The construction industry simply doesn’t have that luxury anymore and won’t for a while. When faced with a difficult employee situation, challenge yourself by asking “if I couldn’t hire another person, what would I do in this situation?” You may find yourself exploring options you may have not previously considered: a role change, a team change, or a manager change, to name a few.
#4: Recruit current employees as diligently as you do prospective ones.
Just like dating, we always want to put our best foot forward early in a relationship. But as we get comfortable, we don’t always put in that same effort. This is true in the candidate/prospective employer relationship, which then turns into a comfortable employee/employer relationship. Recruit your current team by keeping focus on “what’s next” for them. What is their next role (or responsibilities)? What skills do they need to be a success? What resources do you need to provide them to help them obtain those skills? For this process to be the most successful, communicate openly and frequently on the individual, team, and company level.
#5: Focus on why an employee started looking, not why they left.
As previously mentioned, it is frustrating when someone quits and says they are leaving for better pay. Many times, we stop there and focus on that element. Challenge yourself to ask at least five “what” questions to get to the real cause of the departure. This will help you treat the actual problem, not just the symptoms. For example, someone who leaves for more pay may have started looking because they feel their efforts are not recognized by their manager. It isn’t about the pay; it is about the recognition.
Next Steps for Your Construction Company
Ultimately, by treating your employees as people first, understanding what motivates them, and getting to the heart of why employees leave, construction firms can address root causes and cultivate a resilient, motivated workforce poised for long-term success in the evolving labor landscape. Taking a proactive approach will always land in your favor.
For more information on this topic, click here to watch the latest interview, “Talent Trends,” from our Construction Industry Interview Series.