Recruiting and Retaining Qualified Employees

October 1, 2008

A major challenge of the construction industry in the near future will be an insufficient quantity of qualified craft workers, supervisors, managers, and staff. The following factors affect the entire construction industry, but many also apply to the insulation industry:

  • The “baby bust” from 1965 to 1976, resulting in a reduction of new work force entrants
  • An image problem that makes the construction industry an unattractive career choice, especially for young people
  • Competency levels of those attracted to construction, often below levels needed to meet minimum requirements for skilled labor
  • Retirement of thousands of long-time craft workers
  • Current federal immigration laws

To meet this challenge, the industry will need to develop and implement effective ways to attract and retain qualified workers. However, there are significant obstacles to be overcome. When asked, high school students rank “construction worker” 247 out of 250 career choice options. When 1,500 craft workers were asked if they would encourage their child to be a craft worker, 70 percent said no. Obviously, the industry has an image problem.
Retention is a significant factor in a contractor’s success. Recent Construction Industry Institute (CII) research found that contractors with a retention rate of 80 percent or greater realized expected profits on more jobs, completed more projects on or ahead of schedule, and experienced better project safety performance.

It is no secret that turnover negatively impacts productivity. CII research found that a 10 percent change in turnover results in an increase of 2.5 percent in craft worker labor costs, and each turnover results in a loss of 24 to 30 hours per craft worker.
Contractors can use five foundational attributes to attract and retain workers.

  1. Offer wages and benefits competitive with the construction and other industries.
  2. Provide job security to the extent possible, especially through multi-skilling.
  3. Provide a safe and healthy working environment by implementing the CII Zero Accident Techniques.
  4. Treat workers fairly and with respect.
  5. Provide good working conditions.

Offer competitive wages and benefits

The first step is to determine what competitive wages and benefits are in your area. Tools you might find helpful include wage and benefit surveys and governmental resources (such as the Bureau of Labor Statistics, www.bls.gov). Always keep in mind that workers have transferable skills and knowledge—your good workers have other options, and you may want to consider hiring someone whose skill set is similar to, but not exactly the same as, what you typically hire.

Provide job security

Personnel staffing plans can help you employ your workers effectively and creatively by accounting for seasonal slumps and other variables. Cross- or multi-skill training gives you more flexibility in who does what. Worker sharing can reduce the need for layoffs and rehiring.
Careful scheduling of project startups also can play a role. Owners in a local area who are considering when to start up new, large projects that might cause a shortage of craft workers should coordinate their efforts and not begin all the projects at the same time. Phasing projects in over time will prevent a drain of needed available craft workers out of the job market.

Multi-skilling is a labor utilization strategy in which workers possess a range of skills for more than one work process and are used flexibly. CII research shows that employers using multi-skilling benefit from a 35-percent reduction in project work force, a 46-percent increase in employment duration, and 5- to 20-percent cost savings for labor.

Provide a safe and healthy work environment

The first step toward a safe and healthy work environment is to adopt and maintain effective office and project safety programs. Include safety performance in all supervisor and manager performance evaluations, and implement CII’s Zero Accident Techniques in project-wide safety programs. CII’s comprehensive safety program consists of 170 attributes, 5 of which are the most important:

  • Pre-Project/Pre-Task Planning
  • Safety Orientation and Training
  • Written Safety Incentive Program
  • Alcohol and Substance Abuse Program
  • Accident/Incident Investigation

Treat workers fairly and with respect

Part of the challenge ahead lies in understanding the changing demographics of the work force and what they mean. Different generations hold different values and expectations of their work lives. People look for environments that support their values and meet their expectations. Participatory management techniques, such as those discussed below, can help attract and retain employees by helping fulfill those goals.

Provide good working conditions

Good working conditions are also important to workers. Start by maintaining organized work sites and providing rest periods and lunch breaks in clean, designated areas. A heated or cooled work space is important, as is readily available drinking water. It helps to implement and enforce dress and language codes and, of course, post and enforce anti-discrimination and harassment policies.

Changing Work Force Demographics

In the construction industry overall, there will be a decreasing number of native, Caucasian males in the work force, while the number of women and minorities will increase. More workers will be immigrants. As the work force ages, employers will be dealing with the largest number of different generations in the work force in history:

  • The Veterans: 1922 to 1943
  • The Baby Boomers: 1943 to 1960
  • The Xers: 1960 to 1980
  • The Nexters: 1980 to 2000

A more diverse work force means employers must consider a wider range of educational levels in employee development efforts and a wider range of worker values and expectations in company human resource endeavors. No longer can companies take a “one-shoe-fits-all” approach to their human resources.
The future work force expects more from a job than a paycheck. Many of them will want to work part time, share a job with another person, or have more flexible working hours.

Leisure time is important to these future workers, who probably will change careers at least once during their working life. They are likely to be less educated than existing workers, be retired and seeking a second career, and belong to a minority group. They also may be physically and/or mentally challenged, bilingual, and either a single parent or part of a two-income family. They are more likely to work two jobs at least occasionally and dislike repetitive work. These workers will want more opportunities for development and to be involved in decision making. They also will want feedback on their performance.

Attracting and Retaining Qualified Workers

In addition to adopting the five foundational attributes listed above, give some thought to where you are most likely to find workers. You might aggressively recruit at schools or pursue reduction-in-force workers who currently are not working. Try working with other contractors and recruit outside the project location. Written and performance tests are good ways to evaluate potential employees.

To keep your good employees, conduct a needs assessment for continuous training and continuous supervisory human relations training. Try tying wage progression to skill enhancement, while giving long-term preferential treatment to tenured workers.

Keep your employees informed about project progress, and emphasize the “family side” of construction, such as company picnics, a newsletter, and other opportunities for your workers to bond.

Commonly used craft worker retention programs include training and re-training, improving working conditions, building morale, and paying overtime. The most effective retention programs include paying a retention bonus, improving working conditions, conducting multi-skill training, other work-related training and re-training, and paying overtime.

When it comes to cost effectiveness, the best craft worker retention programs are building morale, implementing re-employment plans, paying a retention bonus, training and re-training, conducting multi-skill training, and conducting exit interviews.
High-performing organizations provide the following.

  • Challenging and interesting work
  • Opportunities for learning and growth
  • Control over the factors that enable high performance and continuous improvement
  • Knowledge of results
  • Positive personal relationships
  • Sense of personal contribution and satisfaction
  • Support from management

Effective Management of the Changing Work Force

Management must create an environment where people are motivated to direct and control their own behaviors and outputs through involvement, participation, teamwork, and empowerment. To that end, assess the changing composition of your employees frequently and implement proven methods of attracting and retaining employees. Try improving your hiring practices through more effective interview methods and job matching, and hire under-utilized and non-traditional workers.
Training is critical and should include: annual training needs analysis and “360 degree” training for all employees; on-the-job task training for the less-qualified, entry-level workers; and training for supervisors and managers to be more effective leaders. Tie successful completion of training to wage/salary and benefit increases.

Your management practices and processes should adapt to accommodate the more diversified work force, including annual performance evaluations for all employees and keeping employees informed of their individual performance on a regular basis. Also, consider developing plans to extend the retirement age and keep older workers.

Conclusion

For your company to maintain a qualified work force, you need to have formal processes to attract and retain productive construction craft workers. Prepare now for the challenges that lie ahead by planning how you will find, train, and keep workers in the future labor market.