Reduce Employee Turnover at Your Construction Company

Why Your Construction Company Needs a Turnover Reduction Strategy

We recently interviewed a dispatch manager at a construction company. The interview revolved around their use of Vizzn, a leader in heavy civil construction automation and project management. Even with advanced software, the human factor is critical. “It’s important to check in with your team regularly, because even construction workers need to know you care about them – especially the old timers,” were some words of wisdom from that dispatcher.

Construction companies have many challenges to contend with when it comes to reducing turnover. The construction industry has one of the highest rates of employee churn, which is why it’s crucial for construction business owners to implement strategies that help reduce turnover. Whether you operate a small general contracting firm or manage a large construction company, your organization will benefit from implementing a turnover reduction strategy. Operating any business is challenging and requires an inordinate amount of time and resources. Construction is no different and poses its own set of unique challenges. Even if you thrive under pressure and enjoy the fast-paced nature of this dynamic industry, there are some downsides to being part of construction. Chief among them is employee churn. Reducing turnover in your company is essential because it will save you money, time, and resources while also helping attract better talent going forward. Here’s why your construction company needs a turnover reduction strategy:

Turnover is costly

The most obvious reason to reduce turnover in your construction company is its high cost. It’s estimated that the average company loses anywhere from 20-40% of its annual payroll due to turnover. For example, if you have 100 employees and have slightly higher than the average turnover rate, you will be losing anywhere from 20-40 employees per year. At an average rate of $50,000 per employee, that’s a significant loss. While reduced turnover may not seem like a major problem in the short term, it can cause significant long-term issues for your business. If you are constantly hiring and training new employees, it can be extremely time-consuming and disrupt the work flow. An insufficient staff also has the potential to harm your reputation and customer relationships. If your business is in the commercial construction industry and you have clients who are expecting timely project completion, a shortage in the workforce can delay projects and negatively impact your company’s reputation.

Turnover leads to missed deadlines and delayed projects

If you don’t know how to manage a construction site, turnover will kill you. Not only does turnover negatively impact your bottom line, but it can also lead to missed deadlines and delayed projects. Employees who are new to the industry may take longer to learn their jobs and complete projects since they lack experience in the field. If your business is a general contractor, missed deadlines can harm your reputation and negatively impact the progress of your projects. For example, if you are managing a construction project that involves a strict deadline, and an inexperienced employee is responsible for meeting the deadline, he or she may struggle to meet the contractual obligations. This can end up costing you money, as well as negatively impacting your client relationships.

Turnover is demoralizing for employees and contractors

Construction is a field that relies heavily on relationships. The work is highly collaborative, and successful projects depend on the efforts of skilled employees and contractors who work well together. When you have high turnover rates, however, it can put tremendous pressure on those who remain. While it’s understandable that you seek to replace employees who aren’t a good fit for the company, it can be harmful to the morale of those who remain. New employees may feel as though they’re constantly looking over their shoulders, wondering if they’re next to be let go. This can create an environment of stress, which can lead to poor work performance and overall unhappiness among staff. That’s not only bad for productivity, but it can also drive away current employees. If they feel as though they are being pressured to perform while also managing the emotions of others, they may leave your company.

Strategies to Help Reduce Construction Company Turnover

The best way to reduce employee turnover is to implement strategies that will improve the work environment. This means taking an active approach to improving employee engagement. Here are a few strategies to help reduce construction company turnover:

Offer competitive salary and benefits

This is a no-brainer, but you’d be surprised how many companies fail to take it into consideration when trying to reduce turnover. You should always aim to provide the highest salary and benefits in your industry. If you can’t compete in terms of salary and benefits, then you need to at least be honest with your employees about what their jobs will entail and what they can expect. You must be transparent about the work environment and expectations, so that employees can make informed decisions about whether it’s a good fit for them.

Rotate staff through different teams

Another strategy to help reduce turnover is to rotate staff through different teams. This will ensure that they’re not getting bored with their jobs and provide them with the opportunity to explore different roles within the company. While it’s important to have a consistent and reliable team structure, rotating employees through different teams can help with turnover. This strategy is especially useful for larger construction companies. Small general contracting firms may not have the resources to actively rotate staff, but larger companies can benefit from this approach.

Celebrate milestones with your team

Celebrating milestones and good work is also a great way to reduce turnover. Whether an employee has completed five years with your company or you’ve successfully completed a project, it’s important to celebrate those milestones. Not only does it show that you appreciate the efforts of your employees, but it also helps to motivate them going forward. By implementing these strategies, you can help to reduce turnover in your construction company.

Conclusion

Construction is a high-turnover industry. No amount of construction dispatch software can makeup for a construction site with no workers. The average construction company loses 20-40% of their employees each year. This is why your construction company needs a turnover reduction strategy. The best way to reduce turnover is to improve the work environment by offering competitive salary and benefits, rotating staff through different teams, and celebrating milestones with your team.

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