Are You Ready to Lose 30% of Your Construction Workers?

Contractors need to be more persistent, creative and flexible to find new construction workers

Feb 11, 2015

When you look at costs like that it makes a lot of sense to invest in whatever we can do to retain our current workers and those we’ll be hiring over the next few years.

Finding construction workers is hard work. Contractors will certainly need to be more persistent, creative and flexible to find new construction workers. But perhaps just as important, maybe more so, is that contractors must do more to retain the workers they do hire.

Employee retention is and will be the hot topic for years to come for most contractors. This issue is certainly bigger now than at any other time in my 35 years in the construction industry.

Consider another national labor statistic that projects that we’re getting “older” as a workforce. It’s estimated that some 25% to 30% of our workforce will be 55 years of age by 2020. Contractors have their work cut out for them both in finding good workers and retaining those that they do have working today.

Consider what impact employee turnover, or an employee leaving a crew, department or project team short one worker has on most organizations. While labor rates and salaries differ across the country, the average turnover cost for a general laborer can be $5,000 to $7,500. For a front line foreman that turnover cost might be $15,000 to $20,000. To replace an experienced superintendent, project manager or a veteran department manager that replacement cost can easily exceed $35,000.

Why the huge numbers for turnover costs? Well, consider a few factors that might make up some of the costs, including:

Production that is NOT made due to the void
Time spent by anyone involved with interviewing, screening, etc.
The number of days, weeks or months involved with educating and training a new worker before he or she is producing at a consistent level
Fees paid to a professional recruiter (aka “Head Hunter”), which can be as high as 50% of a new hire’s first-year salary.

Now, when you look at costs like that it makes a lot of sense to invest in whatever we can do to retain our current workers and those we’ll be hiring over the next few years. The good news here is that retention is everyone’s problem — including your competitors’. The better news, for you and your company, will be if you choose to put to practice the following seven steps to worker retention. Each of these steps is explored further in a separate article.