As 2020 wraps up and the numbers begin to roll in, the results are disheartening and shocking. Work slowed down due to Covid19 and work that was in progress continued to go over budget and have schedule slips.
The construction industry took a hit in 2020. Construction leaders have to be thinking about where they can squeeze the lemonade from the lemons that have led up to this:
Everyone is anticipating this trend will carry at least into the first half of 2021.
A new administration in the White House.
Covid still looming.
More technology needed to manage project complexities
In looking at all those potential factors, having and keeping the right employees could be the make-it or break-it this year.
According to yesterday’s report from Business Wire and Dodge Analytics, for the full year of 2020:
Total construction starts fell 10%, $766.3 billion.
Non-residential starts saw the steepest drop, losing 24%.
Residential fared better, up 4% because of single-family.
70% of projects are still late and over budget
35% of project teams report being overwhelmed
As construction leaders look ahead at 2021 and consider the different facets of their business, employees have to be one of the key factors that have the potential to bring on success.
When it comes to employees you need to have strategies in place to attract and retain the best team. With most companies using services to find the best employees, we want to focus on the high-cost of losing employees, and the methods to keep good employees around long term.
When it comes to losing an employee there are both the direct costs and indirect costs, short-term, and long-term consequences as well. Like most of you (we hope), we constantly read articles on this subject from experts. Here are some ideas that have caught my attention:
Direct Costs of Losing An Employee:
Some studies predict that when you replace salaried employees, it costs 6-9 months’ salary on average. Other studies predict 16% to 213% of the annual salary.
The cost for a $10 / hr employee at 10% is $3328
The cost for mid-level employee ($40,000 salary) would come in around 20% or $8000
The cost for an executive could be as high as $213,000.
There is the cost of hiring a new employee, including advertising or agencies, interviewing, screening, and hiring.
Then there is the cost to onboard, including training and management time
Customer service and client errors can add significant expenses.
Let’s face it, the total cost of employee turnover is likely higher and is really unknown as most companies don't have systems in place to track exit costs and onboarding.
Indirect Costs Of Losing An Employee:
Turnover can damage your brand. Stressed employees do poor work and a revolving door can erode customer loyalty.
Productivity takes a dive. The absence of work being accomplished by the now departed employees and another person finding and training a replacement.
Your overall employee development might stall. You may end up missing an important cog in the wheel of a great team.
Valuable knowledge and relationships often exit with the employee.
What are the specific client needs that the employee was handling that others don’t know about?
Did the employee have close ties to an important contact in the client's office?
Is he taking that insider knowledge with him/her to your competitor?
According to a study from the work institute, 42 million US employees left their jobs voluntarily in 2019. That is 27% of the workforce.
It is important for construction leaders to know the reasons employees leave. Some of the most common are:
Motivation for higher pay.
Benefits and employer contributions to those benefits including health and education.
Paid time off.
401K or stock.
The work is not engaging or challenging enough.
Ideas aren’t being heard.
Employees are poorly managed.
There are proven methods to avoid, or at least lessen, employee turnover and create positive and happy employees, and from those:
Employees will be more productive.
They become better leaders.
Happy employees make for better team players.
Technology driving organizational and personal efficiency
Here are some recurring themes we’ve seen when it comes to employee happiness and contentment:
Recognize when an employee makes progress.
Give employees ownership in their responsibilities.
Make everyone feel they belong.
Don’t assume they are happy, but rather inquire.
Take a personal interest.
Inject fun and engagement.
Stop keeping score all of the time.
Build in systems to track retention and satisfaction.
Here are a few unconventional tools that stood out to me:
Team building. Get them out of the office. Don’t force it, but rather look for things your employees truly like to do. Maybe a nice informal dinner, an escape room, or laser tag.
Start the weekend sooner. One survey found that workers are least productive on Fridays after 2 PM, cut your losses and boost morale by sending them home just those couple hours early each week.
Creating fun weekly games and contests can be positive and offer new and more engaging ways to handle responsibilities. Gamification in the workplace is proven to lead to higher levels of motivation.
As we move through 2021, I wish everyone the best and increased success.
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