Finding construction workers is hard work. 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 thirty-five years in the construction industry. Listen as Brad walks you through the onboarding process, the first of seven steps to retain workers. Enjoy!
TRANSCRIPT:
Finding construction workers is hard work. Some of the national labor statistics present a fairly dismal picture of what sort of talent pool is out there for contractors. Projections about the shortages of needed workers to fill jobs in the construction industry range from as low as one and a half million vacancies to as high as two to three million. It safe to say that if most of the projected building projects were to all start at the same time there would not be enough workers to complete the projects.
The whole “So What” learning from this situation is that 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 thirty-five years in the construction industry.
Consider another national labor statistic that projects we’re getting “older” as a workforce. It’s estimated that some 25% – 30% of our workforce will be fifty-five years of age by 2020. That’s just six short years away. Contractors have their work cut out for them both in finding good workers and retaining those that they do have working today.
Over the past few years I’ve had the privilege of working with some really outstanding construction companies around the world. In fact, I’ve worked with several other industry firms that have perfected some area of retention with their workers. What I want to do in this series is to share seven steps to retain your workers.
While it may be unrealistic to believe that any one contractor might execute each of the seven steps without error, it is important that they execute each of the seven steps if they are to have success. Executing the seven steps will strengthen your retention, build greater teamwork among the crews, produce better results, and in the end, develop a better trust between contractor and employee.
Let’s address the seven steps first before exploring in greater detail how to maximize each step’s effectiveness within your organization.
The 7 Steps to Worker Retention
Step #1 – “Onboarding”
Step #2 – The 90-Day Plan
Step #3 – Skill Training
Step #4 – Coaching & Mentoring
Step #5 – Engagement/Participation
Step #6 – Responsibility Enhancement
Step #7 – Performance Review
Looking at the seven steps there is little new that is present. While a term or phrase might be stated differently, most contractors have practiced one or more of the steps. However, what is more critical to positively seeing an improvement in your retention of workers is to commit to executing all seven of the steps consistently.
Before we begin to look at the first step consider what impact employee turnover, or an employee leaving a crew, department, or project team short one needed worker has on most organizations. While labor rates and salaries differ across the country, the average turnover cost for a general laborer can be $5,000.00 – $7,500.00. For a front line Foreman that turnover cost might be $15,000.00 – $20,000.00. To replace an experienced Superintendent, Project Manager, or a veteran Department Manager that replacement cost can easily exceed $35,000.00.
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 new worker before they are producing some consistent output of work.
- 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 such costs it makes more sense as to what we might do to retain our current workers and those who we will 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 seven steps presented in this series.
Now, let’s look at our first step.
Step #1 – “On-Boarding”
The term “on-boarding” isn’t new. While it hasn’t been around for fifty years it has become a more commonly used term in the past five to ten in some industries. It’s really hasn’t been all that common in the construction industry until just three to five years ago for many contractors. So what does “on-boarding” mean?
On-Boarding is a term used to define an approach to preparing both the company and the new employee for a positive employment experience. It’s an effort made by the hiring company to prepare the new hire for their new work environment. Likewise, it’s also the preparation a company takes to insure that their current workers are ready to project a positive and sincere image, creating a very good first impression on the new worker.
There are many actions, techniques, and approaches that can be used to insure that the on-boarding experience is effective. We’ll spend the remainder of this article providing you with a number of such efforts that you may want to use as stated or to modify to better fit your company’s culture and resources.
Components of Effective On-Boarding
- Prepare Your Culture for New Workers
This is not as easy as it first sounds. Some of your current workers are quite honestly horrible when interacting with a new employee. They may not be sociable or helpful in the early days, not to mention that they may refrain from making eye contact, quickly walking away from a new worker, or looking for opportunities to avoid the “newbie.” To prepare your culture for new workers is to communicate your personal expectation to welcome and integrate new workers. This first component really does begin with the contractor and the senior leaders.
- Train Your Current Workers on Interpersonal Skills
This training might include teaching your workers, especially field workers, how to shake hands with other people, how to ask friendly questions of a new worker without being too invasive or personal, and how to assist a new worker without making the new worker feel stupid. Learning how to make eye contact, how to square one’s shoulders up to another person when speaking, and how listen with interest are all skills that can be taught…and learned!
- Advance Newly Hired Employee “Reading Literature”
There is often a space in time between the candidate accepting your job offer and their first day as a new employee. Send the new hire an article or perhaps some company information that might begin their thinking process. Some contractors have sent a package to the new hire, before their first day, that contains some of the company literature, perhaps the employee handbook, maybe even information about a project that the new worker will be assigned to when they begin. Advancing such literature is less to do with the seriousness of the literature and more about sending a strong message to the new hire that they are needed, are being thought of, and that the company is anxious to get the learning process moving.
- Prepare for Day 1 and Making a Great 1st Impression
When that new employee arrives on the very first day, it is crucial that the contractor and every other person available work to greet and welcome the new employee. In most companies a general orientation on the company is part of the first day, maybe a few introductions are made, and then the new worker is escorted to their cubical or assigned to a crew. While the temptation is to get the new employee “doing” as soon as possible, it is more important on this first day to be sure that they are made very familiar with their co-workers, their work area, and a general confidence in where tools and resources are located.
Even for the new field worker, there is much that a contractor can do to make a great first impression, including:
- Introduce new worker to rest of crew workers
- Pre-assign a current worker to be the “buddy” for the new worker
- Provide lunch for the entire crew on the new employee’s first day (Crew members will begin to love the first day of a new worker!)
- Have the crew leaders spend a bit more time explaining work processes, standards, etc. for the way your company performs tasks
- Have the current workers present the new worker with a new company logo’d hat, shirt, etc.
- Encourage your current workers to each provide some fun information about themselves or the crew experience during break times
- Finish Day 1 with Supervisor Conducting “De-Brief”
To bring a bit of closure to what is usually an emotionally trying day for a new employee, have the new worker’s immediate supervisor spend a few minutes at the end of the workday just seeing how the new worker faired. Ask your leaders to share how glad they are that the worker has come to work for the company, maybe even pointing out any positive observation that they made about the new worker. Have the leader ask the new worker if they enjoyed their day and if they have any questions that can be answered before they leave work. Such follow-up really does provide the final “book end” of experience for the new worker on their first day.
Now, with the onboarding effort complete with the first day, this doesn’t justify having all the workers begin to treat the new worker with anything less than the same respect afforded them on the first day. However, we’ll look at the next eighty-nine days of effort in our second article in this series.
A final thought before closing out this first step. Onboarding is HUGE in the life of any new worker. Think about the fact that most new workers will return home and be asked by a spouse or significant other as to “How did your first day go?” You want your new worker to have nothing but positive things to say about their first day’s experience. Such a great first impression will get the entire relationship off to a great start!
Onboarding, no cousin to “water-boarding”, is your preparation and execution to retain new workers. Unless you want to experience the turn-over costs addressed earlier in this article, the components to making the first day on a new job the best experience possible for new workers will reward you handsomely.
Here’s to bringing new employees on board with your company and to building long-term relationships with your workers.
