A Labor War of Wages Won’t Cut It in Construction

Construction company owners must refrain from entering into a war of wages when looking to fill open positions.

Faced with an urgent skills shortage, construction leaders need to attract as many new faces into the industry as possible and importantly, retain them.
Faced with an urgent skills shortage, construction leaders need to attract as many new faces into the industry as possible and importantly, retain them.
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The construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to a proprietary model developed by Associated Builders and Contractors. Faced with an urgent skills shortage, construction leaders need to attract as many new faces into the industry as possible and importantly, retain them. But how?

Not by competing on salary. To attract workers, 72 percent of contractors increased base pay rates in 2022 and about a third boosted bonuses and benefits. This war of wages may seem the easiest way to attract and keep labor but it’ll likely increase rather than reduce staff attrition – workers will simply jump from one company to another in search of the highest wage.

The reasons workers are attracted to a particular company – and then choose to stay – are far more complex than what’s in each month’s pay packet, from quality of leadership through to their sense of belonging. However, to determine what’s important to your people, you need to ask them – and, importantly, you need to act on what they say.

This might sound simple, but it’s obviously not as easy as calling a meeting and asking everyone what they want. For a start, there are 10 key factors that impact employee engagement, and it’s important to find out what your employees think and how they feel in relation to each of them.

These include: the quality of senior leadership; growth opportunities; teamwork; direct manager relationships; flexible working (is it even an option?); empowerment; reward and recognition; wellbeing; diversity and inclusion; and organizational purpose.

Finding out what your employees think about all these fundamental elements requires the collection and interpretation of data, which can then be turned into concrete action so your organization becomes a magnetic place to work. And such a task requires engagement software that’s compatible with mobile technology and has been designed to capture and analyze information from deskless workers.

Ideally, the engagement software will send regular surveys to all workers at different points in the employee lifecycle, from their onboarding period right through to their exit. It must also be capable of sending out regular ‘pulse surveys’ which temperature-check employee sentiment. Always short and snappy, such surveys must be accessible to all via mobile devices as well as laptops, and be easily understood by a neuro-diverse and culturally diverse workforce.

The outcome will be a holistic view of what’s important to your workers, and what is and isn’t working. For instance, if a large section of the workforce is feeling unappreciated and taken for granted, an action plan can be put in place on how to improve this – such as the introduction of a reward and recognition initiative. Similarly, if people feel they have few opportunities for career growth, a training and development program may help to turn things around.

Onboarding survey insights are also vital for understanding how well employees are being trained-up and integrated into the company. With up to 20 percent of new hires leaving within the first 45 days of their role, organizations need to figure out what is and isn’t working with the onboarding process, including the key reasons behind new starter attrition. After all, investing heavily into attracting talent is money wasted if new hires aren’t going to stick around. The insights could reveal a range of issues that may require fixing or further investigation, from processes not being followed and absent managers, through to new hires being made to feel like outsiders rather than valued members of the team.

Likewise, exit surveys are crucial for finding out whether there are any inherent organizational issues that are causing employees to leave. There will naturally be a certain level of staff churn so it’s important to understand what is and isn’t normal. If the survey results reveal that most staff who are leaving have been in their roles at least three years and remain promoters of the organization, there is probably little to worry about. However, if those leaving point to certain reasons for them moving on, such as feeling overworked or stressed, there are clearly fundamental issues that need addressing.

By drilling into the data a little further, patterns may start to emerge that pinpoint potential reasons for employees feeling worn-out and stressed. Examples include poorly trained managers who don’t understand how to get the best out of their teams, and poor support networks for females, ethnic minorities and LGBTQ+ employees due to an exclusive rather than an inclusive workplace culture. With such powerful insights to hand, leaders can pull together an action plan for tackling the main issues driving employees away, reducing attrition rates while increasing employee engagement.

Ultimately, the only way construction companies are going to attract and retain new and diverse workers is to make their organization attractive to all rather than focusing on a war of wages. The culture needs to be inviting and inclusive, with plenty of opportunities for people to develop and shine, and everyone must feel part of a company that cares about them as individuals.

Making this a reality means drilling into the existing culture and recognizing what is and isn’t working, through an ‘active listening’ survey-based approach. By having a clear understanding of your people rather than basing decisions on assumptions and theories, you can bring about real cultural change that makes your company an appealing destination for all.