Once demand increases, contractors will seek to replace the workers they’ve lost.
According to the Associated General Contractors of America’s (AGC) 2024 Construction Hiring Outlook, 69% of firms surveyed expect to add workers in 2024 to match demand, particularly with infrastructure projects. The issue is currently recruiting pools are extremely shallow, making it difficult to find enough workers to meet project demand, let alone replace those workers who left. AGC’s hiring outlook shows 55% of respondents say it will be harder to hire in 2024 – making it vital to retain as many employees as possible.
Why Employee Retention is So Cost Effective
Replacing lost talent is expensive and the more accomplished the employee, i.e., the more training and certifications they have, the more it costs to replace them. Hours of training, including both time and money invested, quickly add up for each employee who leaves. Tangible turnover costs include:
- Unemployment compensation
- Job postings
- Time spent interviewing, screening and performing background checks on candidates
- Pre-employment tests
- Signing bonuses and relocation costs
- Time spent on orientation, onboarding and training
But there are also less tangible costs like lost productivity and institutional knowledge as well as the possible negative impact on your other employees. It’s been estimated that replacing one employee can cost upwards of $4,000, making retaining employees far more efficient.
How Your Culture Impacts Retention
Employees don’t typically leave a job they love, and company culture has a lot to do with how your employees feel about their positions. Company culture is what defines your company, including beliefs and values. It’s also what helps keep your team together. A strong company culture helps sync the actions of employees and management. With a strong culture, everyone is on the same page and working towards fulfilling the company’s goals.
If your turnover rates are high, there are some simple changes you can make to your company culture that will have positive effects.
Paying Competitive Wages
Look closely at your wage offerings. If you’re not offering a competitive wage, one that matches or beats what your competitors are paying, not only will candidates be less likely to accept a new position with your company, but your existing employees may decide it’s time to go elsewhere. To strengthen their offerings and entice workers, 63% of AGC’s Construction Hiring Outlook respondents say they’ve increased base pay rates in 2023 and 25% provided incentives or bonuses. Doing the same in 2024 can help improve retention.
Improving Benefit Packages
Along with competitive pay, a good benefits offering can entice candidates and strengthen your current employees’ commitment to your company. In fact, according to a study by Aflac, 29% of employees have left or turned down a job due to the benefits. It’s not surprising that 24% of the firms in AGC’s report increased their portion of benefit contributions and/or improved employee benefits in 2023.
Some cost-effective benefits enhancements include:
- Providing a base amount of life insurance and some level of disability coverage.
- Adding an employer HSA match, and even pre-funding the employer amount, to offset high-deductible plans.
- Including voluntary benefits offerings like pet insurance, critical illness coverage and hospital indemnity, which don’t cost an employer anything.
- Pitching in for family coverage. If your employees pay full-freight for their dependents’ coverage or your company contributes significantly less than average you may be losing current and prospective talent.
Offering Career Planning
Career planning via development and succession planning programs helps your employees grow their careers by expanding their opportunities. Offering development programs allows your employees to improve or learn specific skill sets to help drive better overall business performance. Coaching, mentoring, job shadowing, attending webinars and conferences, and online training courses are all types of development learning.
Dedicating resources to your employees and developing formal training makes them feel valued as individuals and as employees. Valued employees will be loyal to your company because they will feel you’ve invested in them, even when other opportunities present themselves. Plus, when you invest in your employees, they become invested in your company’s future success.
Dedicated HR software for construction can also help contractors both recruit and retain more workers. A hire solution, like applicant tracking and onboarding systems, streamlines the hiring process and starts candidates off on the right foot via ease of use and engagement. Benefits management software lets HR complete tasks in a fraction of the time it would take if done manually, while automating essential communication with employees like an expanded benefits package. Learning management systems give companies the ability to develop specific training plans for employees, while actively monitoring their progress so managers know who is progressing and who should be promoted.
Want to learn more?
Arcoro provides HR solutions that allow companies to hire, manage and grow their employees. Arcoro’s solutions provide HR departments with the tools they need to promote company culture in every step of the recruiting and talent management process and beyond.
Contact our team to see how our solutions work or ask questions about Arcoro can be your bridge to better HR.
