New pay and culture norms shape competition for talent
The intensity of the challenge facing any construction company trying to recruit and retain talent can be shown in a single number: 459,000. That was the number of job opening in the U.S. construction industry at the end of 2023.
Unfilled jobs are expected to top 500,000 this year.
That deep and worsening labor shortage means employers must redouble their efforts to attract and retain an array of workers from new graduates to highly experienced professionals to diverse populations that have historically been underrepresented in the construction industry.
Turner Construction Company has won multiple awards in the past year for its talent practices, including best employer for veterans, new graduates, diverse workers and parents. Kathleen Igoe, Vice President of Talent Management, said one key to Turner’s success has been its people-first culture.
“I think Turner does a great job at creating a culture where people can come to work as their authentic selves, where they are treated with respect and dignity, and our differences are celebrated,” Igoe said.
Over the years, Turner has established a series of Employee Resource Groups (ERGs) to support different types of workers. There are ERGs for employees who are parents, veterans, women, young professionals, LGBTQ, culturally diverse or with differing abilities. The groups provide supportive networks to individuals and generate ideas of how Turner can hone business practices and employee benefits to meet the differing needs and priorities of different workers.
“It is essential that we understand what is important to different individuals. I think we are getting that constant feedback through our engagement surveys and our new hire surveys which help us stay connected and understand those differences,” Igoe said.
Creating a supportive and motivating culture has become much more important among construction companies generally.
“For younger candidates with five years or less experience in the industry, the biggest thing to them is culture,” said Earl O’Bryant, Partner at Cornerstone Recruiting. “They want a nice environment and work-life balance. They want culture that is innovative and upbeat and team oriented. Younger folks don’t want to be stuck in a cubicle alone. They want to collaborate with other people in the office.”
Workers are looking for more communication, more feedback and a workplace where more experienced supervisors listen to them, O’Bryant said. They also want to work for companies that provide good opportunities and clear guidance on how to advance their careers.
“A lot of folks ask us about the mentorship program at the company. They want to be paired up with someone so they can not only learn company processes but how the company works on a personal level,” O’Bryant said.
The other hard reality of today’s construction labor market is that talent costs more.
O’Bryant offers this advice to companies trying to convince an experienced worker to leave their current job. “If you are not going 10 percent higher than what they are currently making, you are probably not going to get them,” he said.
When it comes to compensation, “there are still a lot of contractors out there who think that what they did before Covid is what they can do now,” said Rob Cossaboon, President and CEO of Skillforce, Inc. “But there has been a tremendous shift in the workforce. The reality is the person who was making $20 an hour in construction before Covid, is now making $25 to $30 an hour.”
Benefits and culture are also vitally important, even in small contractors.
“Smaller companies have to recognize that they are competing with the biggest and best companies out there for talent so you better provide a great 401k and paid healthcare, paid time off and work-life balance. Today’s workforce is demanding that,” Cossaboon said. “We find ourselves on a regular basis dragging our clients into this new world.”
The current labor shortage is also forcing contractors to contend with much higher attrition rates. “Attrition can be the death nail of construction companies” and many companies can’t support a recruitment and retention team to overcome that challenge, Cossaboon said.
Consequently, “the recruiting industry in construction has ballooned probably 10 times from what it was five or six years ago because of the difficulty in hiring and because of the high attrition rates,” said Cossaboon, who works with 10,000 construction companies throughout the United States.
One reality of the current labor market, he added, “is if you are a contractor and you don’t work with a staffing company, you are probably having a really hard time growing.”