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Encouraging Employee Retention in the Construction Industry

January 6, 2020

The construction industry has been faced with a persistent challenge for years—high employee turnover and issues with retention. In the latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics, the construction industry had the second-highest employee turnover rate at 5.6%, which amounted to 418,000 separations in September 2019. 

The growing construction labor shortage stems from shifting demographics and recent economic and educational trends. A big part of the construction workforce comes from the baby boomer generation. Unfortunately, baby boomers are retiring from work faster than new construction workers can replace them. The industry is experiencing difficulty in attracting new talent due to the perception of construction work as “hard” and “dirty”. 

Because of these issues, improving employee retention is important now more than ever. Field workers and project managers have highly specialized work. Even if just one person leaves the job during an active construction project, the completion of a project may be at risk. From accounts receivable and lien management to job site management and operations, each cog is crucial to the whole machine. Construction HR managers need to explore opportunities that may help retain construction professionals. One of the best ways to do so is to put up an employee recognition program. 

Implementing an Employee Recognition Program in Construction

Productivity is one of the most important metrics that many project managers aim to improve. A highly productive workforce translates to faster project completion and the ability to take more projects. Having an employee recognition program in place can improve workforce morale, which in turn enhances worker productivity. Here are some tips on how you can implement your own employee recognition program. 

1. Reward hard work through recognition

Did one of your teams achieve a new work milestone? Did they discover a more efficient way to do work? Show your appreciation through public recognition. 

While money is a good incentive to motivate employees, not every type of recognition requires monetary compensation. Annual gatherings and end-of-year programs are great venues to give public recognition through awards and certificates to exceptional employees. If you have a company newsletter or blog, publishing a write-up about your employees is another great way to show appreciation. A peer-to-peer recognition program where employees can praise their fellow colleagues also highlight accomplishment while also shaping a collaborative environment. 

2. Emphasize employee-manager connection

There’s a common HR saying that goes, “Employees leave managers, not companies,” and there’s certainly a grain of truth to this. Managers actually have a huge impact on employee retention, so it is crucial that they know how to provide feedback and give credit where credit is due. Manager-driven recognition has long-lasting effects on productivity and can further improve the bond between construction workers and their managers. 

3. Promote managers from within

There is no greater form of recognition than an actual promotion and assignment of new responsibilities, especially for construction workers. Team managers who started at the lower levels understand the work and what it takes to get the job done. Because of this, they have the potential to become great leaders with the right job knowledge and mindset towards their subordinates. They will also know how to reward performance milestones, especially their subordinate’s commitment to safety.   

Employee recognition is an important part of the construction workplace. It helps build a productive environment and a positive relationship between employees and management. As the construction industry experiences a persistent labor shortage, construction firms need to focus on showing their appreciation to employees if they want to retain them in this competitive market. 

About the Author:

Chris Woodard is the Co-Founder of, where they build software that helps contractors, subcontractors, and material suppliers with late payments. also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing.


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