Construction employees are the lifeline of any project. Thus, their resignation or removal are a disruption to operations. Most companies simply replace their workers, but this is often a band-aid solution that may result in further turnover. It’s important to recognise and address what’s keeping your business stuck in the hiring cycle.

Why can’t construction teams keep their workers?

Construction teams have been struggling to retain their workers for quite some time. Separation rates were 4.6% in February 2023 in Australia and the increase was attributed to non-residential builders and engineering firms.

Research suggests that 14% of studies on construction employee turnover pointed to the person-context-interface, or employee relations with their work environment, as the main influencer for these incidents. However, there are several other factors such as:

• Personal influencers: Employees’ attitude, attributes, behaviour, demographic and psychological background
• Job-related influencers: Job characteristics, pay and difficulties
• Organisational influencers: Organisational context, practices, support or benefits
• External influencers: External factors like a better job offer

The impact of turnovers

Construction employee turnover reduces your skilled workforce and affects the consistency of your work. It can translate into low-quality outputs or even project delays, increasing client dissatisfaction and damaging the company’s reputation.

A worker walking away can also affect the morale of their fellow employees. If they were fired, it would raise questions about management and make them fear their job stability within your business.

There are also financial implications to consider. Finding and training new talent can cost construction companies over twice the amount of an existing employee’s annual salary.

How to get out of the hiring cycle

Getting out of the hiring cycle is challenging. Still, it’s vital to have a two-pronged approach. Hire quality construction workers worth retaining and reduce overall costs to adequately compensate them without running short of money.

You can usually find skilled construction workers by diligently posting job listings and conducting extensive interviews to assess your candidates. Reach out to your internal network and have current employees refer quality contractors to your business.

Another option is to find entry-level talent through trade schools and internships. Hone their skills and provide a good work environment to keep them under your wing throughout their career.

Ways to reduce construction costs and pay workers more

Scaling back on your construction costs to have more financial resources to meet your workers’ needs is a key strategy that can target job-related, organisational and external influencers. Here are several ways you can achieve this.

1. Analyse project scope and costs

Understanding your project scope one by one can help you make more accurate estimates and determine ways to improve efficiency while keeping the budget down. For example, delegate fewer workers and optimise scheduling on smaller projects.

Review the materials and building design to see if any modifications can reduce the expenses. Remember to communicate with your clientele to meet their requirements.

2. Avoid idling construction machinery

Construction machinery can help cut operational costs, but it can also create unforeseen expenses. If the engines run idle, they unnecessarily consume fuel and wear down the machine as a whole. It would force you to use warranty coverage.

Train operators to keep the equipment off when they’re not in use. You can also enable auto-shutdown features when available.

3. Minimise and manage waste

Construction waste comes from excess material that has already been paid for. Its transportation and disposal can also incur extra expenses. Be vigilant with your budgeting and ensure you only order what’s necessary.

If you have salvaged any materials, consider reusing them in some form. Excess concrete can be crushed and used as aggregate for future mixes.

4. Prioritise safety on the construction site

Medical bills and workers’ compensation due to safety incidents can drain your funds. In 2023, the construction industry saw 3.4 fatalities per 100,000 workers, which is already too many lives lost. Investing in construction safety can help bring down costs and encourage workers to stay in the field.

To mitigate the risks, wear the proper PPE and conduct hazard inspections. Joining a construction safety group can also guide you through the process.

5. Practice diligent contract management

Projects progress quickly, and oversight can increase costs. Pay attention to the terms and conditions regarding the expected output, necessary certifications and any requested inspections.

That way, you’re performing services you had actually agreed upon and are getting paid for. You can also conduct contract reviews and modifications when changes like amended timelines occur.

Find and keep quality employees

Turnovers can have numerous drivers, but they all have the same impact of driving costs up and reducing organisational productivity. The sooner construction firms can retain employees, the sooner they can achieve stability.