I’ve been studying the construction industry for a long time now, and have done a ton of research on why contractors succeed and why they fail. In fact, a lot of what we do here at busybusy is based on a pretty extensive body of research. One of the big factors in the success rate of construction businesses is employee turnover.
That’s true for all businesses, but in construction we have more of a challenge with it. Traditionally, construction is a pretty tough business on several levels. It’s tough in general, just to compete and be successful. But we’re also tough on people. It’s a natural tendency, since a lot of us are type-A personalities and we’re all working hard to get jobs done. But in the process we’re often hard on those who work for us, demand a lot of suppliers and subs, and we’re tough on ourselves. So it’s easy to forget about taking care of people in the right way – about how important people our to our businesses.
This certainly contributes to the construction industry having one of the highest turnover rates, averaging around 25% per year. This is a real challenge, since losing employees – especially key, skilled crew members – has a big ripple effect, negatively affecting productivity of the entire company. And of course, large turnover rates lead directly to big retraining costs. It’s not uncommon to spend thousands of dollars, even tens of thousands, to retrain someone to replace a skilled employee who left to go somewhere else. So, this isn’t about just “touchy-feely” stuff to make people feel good. Employee retention directly impacts a company’s bottom line, and ultimately affects entire industries and our whole economy. It’s really important.
Establishing a Positive Culture
Whenever I advise a business, one of the first things I talk about is the need to create a positive company culture – and a vision of what the company is about. Why does someone want to work in your business? What’s the grand vision that motivates them? What are you trying to achieve? Everyone wants to feel pride in their work. It’s interesting that as a basic measure of fulfillment, many people rank job and career satisfaction higher than religious faith. We want to feel that we’re really achieving something. This is very prevalent in construction. We build things, after all. And we’re proud of what we build.
So what is it that your company is building? What is the grand scheme, the great blueprint that you’re building on? When you can clearly articulate that, people will want to be a part of it. We all want to be proud of what we do. We want to be able to go home and brag about it to our families. When a company’s vision and culture satisfy that need, it’s a very powerful thing. When you have that vision, and have put into place the elements of a positive culture that promotes mutual respect, team values, high performance and loyalty up and down, it will draw in quality people. It will help you put together a high-calibre team that shares your vision and will work hard to advance the business.
Many larger companies get this culture thing. They spend time on it, spend resources to get it right. But in my experience, medium and small businesses often skip over it. They just don’t see the immediate value in developing their culture. But this is a fundamental mistake in my view.
Whether you’re conscious of it or not, some kind of culture will take hold in your company. And without purposely working on it, it can develop in ways that aren’t so good. So it doesn’t matter how big a business you’re in, real thought needs to be invested into this area. To really be successful over the long term, you need to take time and develop a strong and lasting positive culture that helps attract, motivate and retain great people. – Isaac
[Employee Retention Part 2] (https://busybusy.com/blog/employee-retention-pt2-team-members/)