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Locking the Turnover Turnstile

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Is Profit Literally Walking Out Your Door?

Despite its potential for offering anyone who wants to work hard a rewarding career, the construction industry has long struggled with a high rate of worker turnover. In fact, just last year alone the U.S. Bureau of Labor Statistics announced the average turnover rate in the construction industry remains higher than pre-pandemic levels with some areas of the country reporting as high as a 68% turnover rate. This sort of number makes turnover a tangible, profit-depleting business liability—dipping into profit dollars just as sure as a missed line-item on a bid or the correction of faulty work in the field.

But there’s more. For wall and ceiling contractors working in a competitive market, high turnover can result in increased production costs, decreased productivity and the loss of experienced and knowledgeable personnel. With so much at stake, it seems prudent that we take a moment to examine some key causes and consequences of worker turnover, and then discuss strategies to reduce it.

Worker Turnover: Causes
Lack of Job Satisfaction. Simply put, workers who are dissatisfied with their compensation, work environment, career growth opportunities or the organization’s culture in general are more likely to seek employment elsewhere.

Work Versus Life Equilibrium. Long and unpredictable working hours, excessive workload and/or a general lack of work-life balance can cause deep dissatisfaction within a worker that inevitably can lead to worker burnout and eventually drive that worker to seek a position with a better organized environment.
Deficient Leadership. Poor leadership, lack of effective and real communication and a lack of appreciation and recognition for workers’ contributions can lead to frustration and detachment on the part of the worker, prompting talented individuals to go off and seek opportunities down the street.

Limited Career Advancement. Workers—humans—value opportunities for growth and improvement. When organizations fail to provide clear career paths and invest in their workers’ professional development, talented individuals will look for better prospects elsewhere.

Flaunting Executive Wealth. I have witnessed this many times in my 43-year career, and it is indeed a morale killer. It’s when a member(s) of the company’s upper echelon flaunts (without sharing) things like sporting box seats, season theater tickets and fancy political functions in the faces of the workers “below them.” Another form of this is when one of the company warehouses is filled with the boss’s jet skis, snow mobiles, RVs, bass boats, custom buses and vintage car collections. The audacity is alarming and the tone deafness is something of which to absolutely marvel. It will also drive the regular worker into the arms of a competitor faster than most anything.

Seasonal Nature of Work. I’m from the upper Midwest where it’s not uncommon for work levels to fluctuate according to the seasons. Following months of intense activity, each autumn (around deer-hunting time) layoff notices would be sent out due to a lull in work. This uncertainty of employment will drive workers to seek more stable opportunities elsewhere.

Physical Demand. Construction work is a physically demanding occupation, more so than most jobs. This physical toll can lead to fatigue, injuries and medical treatments later in life. (I can’t tell you how many older drywallers and masons I know who have had their knees/hips replaced with plastic.) This tends to prompt workers to leave for less strenuous or safer job opportunities.

Worker Turnover: Consequences
One of the biggest effects turnover has on a company’s operations is in the way it disrupts continuity in the field. When site workers familiar with a project are replaced with new hires, learning curves begin anew. Old communications and directives are repeated (or forgotten entirely), and growing pains are repeated. As quality declines and schedule ebbs, the client starts to take notice—and not in a good way. Suddenly there are stress-filled job meetings and word starts getting out that your crews are “suspect,” inhibiting future clients—and trust me, word does get around!

Unfortunately, this is just the tip of the iceberg. Here are other consequences of high worker turnover:
Loss of Company Skill and Knowledge. Your experienced workers possess valuable knowledge and skill accumulated during their employment with you. Losing these people can result in a loss of institutional wisdom and can be challenging to repair or replace.

Loss of Company Secrets. Let’s face it, most of aren’t MicroSoft®. We have maybe four or five major competitors in our local market and when we lose a worker, he or she often walks out our door and into the arms of one of our foes. Company secrets or strategies go right out the door with them, and suddenly your competitor has something he can exploit.

Trash Talking. Lost secrets would be bad enough, but unfortunately when working with human beings, there is an element of personal animosity between the departing worker and the old company. So now, besides secrets, bad things may be said. Rumors and innuendo then make the bad things bigger and badder—and more credible with every telling. Eventually, these fables find their way to the ears of prospective customers and—voila!—negative impact on your bottom line.

Loss of Familiarity. Customers become comfortable working with one particular person (such as a well-liked superintendent) from your company—especially if the projects are spread out over long periods. When one of these people leaves the company, the client can feel abandoned, disillusioned and dissatisfied that he has to start all over with a new contact.

Recruitment Cost. Frequent turnover forces construction companies to invest substantial time and resources into recruiting, background checks, blood tests, interviewing and training of new workers. This financial burden brought on by the hiring process strains budgets, interrupts schedules and hinders long-term company plans.

Future Uncertainty. With disruptions in staff due to turnover, an employer may be apt to “pull his horns in” regarding aggressively going after future work. Concerns over insufficient staffing or productivity are major considerations when deciding what and how much future work should be pursued.
Furthering Labor Shortages. Pretty much everybody knows the construction industry is facing skilled labor shortages in the field. The demand for construction projects often outpaces the supply of qualified workers, and this shortage of skilled labor creates fierce competition among contracting companies, enticing workers to frequently switch employers for better compensation, benefits and work environments.

Poor Morale. I saved this one for last on purpose because I’ve felt for a long time that jobsite moral is wholly undervalued by upper management and absolutely vital to a company’s success over the long haul. High turnover can create a sense of instability and uncertainty, which lowers morale among those workers still out on the site. Low morale reduces camaraderie and productivity and increases the likelihood of further turnover—creating negative cycles that can turn into company-killers.

Worker Turnover: Turning the Tide
Of course there are always going to be some “pass through” workers—like students—who only want a job for a short period of time. You’ll also come across a small group of people who just shouldn’t be in the industry in the first place—to which turnover is a blessing to all. But for those people worth keeping, here are a few ways to battle worker turnover you might want to try:

Compensation and Benefits. I consider myself a realist and it’s why I list this remedy first. No matter how much we’d like to wish otherwise—or how many times “business buzzword gurus” purport that you can win over workers with plaques, stickers and casual Fridays—compensation and benefits are the MOST important thing you can do to fight worker turnover. And do not tell me you don’t have the money!
In my over four-decade career in construction I never once worked at a place where there wasn’t money enough for the owner’s sons (sorry, I mean “upper management”) to buy expensive toys for themselves (see “Flaunting Executive Wealth” above) ranging from (these are real examples) a $200,000 custom sports bus/RV (to take to sporting events, box seats of course) all the way down(?) to $3,500 for one potted plant for an executive’s office. Such extravagant purchases prove a colossal blind spot some bosses have when it comes to distributing wealth around the office, but then balking when it comes to offering key, valued workers $2, $3 or even $10 more per hour to retain them. We can also use simple math: one $10,000 snowmobile/trailer equals 10 $1,000 bonuses to valued workers.

Enhanced Training and Advancement Programs. Investing in ongoing training and professional advancement programs help workers to acquire new skills, advance their careers and increase job satisfaction. More than that, it increases the worker’s own self-esteem, which is essential in maintaining good workers and making overall “good people.”

Work-Life Balance. Nothing is more important to many workers than achieving an acceptable balance between their work and family lives. Setting up things such as flexible scheduling, paid time off, sick days and regular breaks during the day (so the worker can call home) can go far in achieving that end.
Also, set up a social event (roast a pig on a Saturday afternoon) and invite the workers’ families to attend. Not only is this nice for the families but it also gives you an opportunity to hear how the families feel about the work-life balance. And believe me, they will tell you.

Cooperative and Supportive Work Culture. Fostering a positive work environment that promotes teamwork, camaraderie and communication helps the worker feel a sense of belonging. Once you have that, loyalty often follows closely behind. Encourage open dialogue, and do not get your feathers in a wringer when you hear something critical of the company. This give-and-take is vital in establishing a “worker voice” and allows them to submit concerns and contribute to a company-wide safe and supportive culture.

Particularly in a post-pandemic world where field workers are already scarce, turnover poses an even more significant challenge for building contractors that impacts morale, productivity and financial stability. By understanding the causes of turnover and by putting into place strategies to thwart it, organizations can reduce the negative impact of turnover and retain talented workers.

By investing in workers, you will ultimately cultivate a thriving workforce within a buoyant environment that contributes to your company’s long-term viability and success. However, the first thing you need to do is start recognizing turnover as a real problem, and then take the steps needed to provide a remedy.

Good luck!

S.S. Saucermanis a retired commercial construction estimator and project manager who worked for a large upper-Midwest general contractor. He is also an established freelance writer and author whose work spans 20 years.

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