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Home | Columnists | Accounting | Accounting - New year, new ideas for recruiting and retaining employees in the construction industry

Accounting - New year, new ideas for recruiting and retaining employees in the construction industry

image Cyndi Mergele, Senior Director, RSM US LLP, San Antonio, TX

AUSTIN - For the U.S. economy, the positive signs continue: unemployment rates are at historic lows, consumer spending is increasing, the stock market–while volatile at times–continues to set new records and optimism is at an all-time high.

 

 

 

 

    The construction industry is expected to flourish right along with the rest of the economy. According to the Bureau of Labor Statistics, the construction industry added 210,000 jobs in 2017, which is a 35 percent increase over the previous year. In addition, construction spending is on the rise. The Commerce Department reported that construction spending was up approximately 2.4 percent in 2017, including a record $1.257 trillion in November.
    The robust economy and the surge in spending are anticipated to boost construction hiring even more in 2018. Not only is the industry expected to create new jobs, it will need to replace an aging workforce, which will begin retiring in record numbers over the next decade.
    Studies have estimated the industry is only producing one replacement worker for every four workers who leave. If this trend continues, it’s expected the industry will face a shortage of nearly two million workers in just the next few years. Uncertainty regarding immigration policies and the estimated 1.3 million undocumented immigrants working in construction could cause those numbers to rise.
    So what should contractors do to fill the gap and attract more workers? One of the biggest challenges is capturing the interest of younger people and, overall, society still heavily stresses the value of higher education. 
    But there are changes which contractors should consider to shift this traditional mindset:
    Be competitive: If construction companies want to attract a different and new demographic, they have to re-imagine the needs of that population. That means providing skilled trade workers with competitive compensation and benefit opportunities. Candidates new to construction need to be confident they will get similar leave and group benefits as their college-educated counterparts.
    Rethink recruiting: Construction companies should be purposeful in their recruiting efforts. Part of that effort will be identifying the best company representatives to share positive messages about the industry with potential workers, especially those just coming out of high school.
    While human resources and corporate recruiters should take part, who is better at sharing positive experiences than a recent, high-performing high school alumnus? Quantifying the benefits of a career in construction is key—work hours, income potential and the opportunity for advancement should not just be discussed, but detailed in collateral material that is provided to candidates. Using these peers to represent the company is one of the best ways to illustrate the value of this type of career and to demonstrate that expensive degrees are not necessarily required for success.
    Engage employees: The most cost-effective method to alleviate a worker shortage is to retain the ones you already have. While that’s not always possible—there will always be employees who find reasons to quit—it’s important not to overlook the importance of engaging employees. Yet, on average, only 39 percent of construction firms measure employee engagement. Companies that have shown positive steps in retaining employees find ways to frequently (and informally) get employee feedback, host in-house classroom training and even coach employees. While these might not produce instant engagement, it can show employees the company is invested in them and cares about their future with the organization.
    Regardless of position, employees want feedback on performance and opportunities to enhance their skills and knowledge.  Studies have shown that companies with the highest employee retention rates have committed to rich professional development cultures and have effective performance management processes. Yet 55 percent of contractors do not have any formal processes in place for identifying and developing high-potential employees.
    It’s a critical time: Approximately 89 percent of construction firms report facing talent shortages.  As economic trends indicate, the construction industry can expect strong performance for years to come and with that, rewarding careers with competitive pay. It’s time to get that message out to the next generation preparing to enter the workforce.
    Cyndi Mergele is a Senior Director with RSM US LLP’s Human Resources group.


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