Where’s my crew?
A labor shortage is coming. So say recent figures generated by the Construction Labor Market Analyzer, a Web-based tool for collecting and aggregating construction labor data. It estimates that, by 2016, U.S. construction projects will require 6.7 million total workers — about 50% more than are on the job or otherwise available today.
For contractors, such a drastic shortfall of skilled laborers could push up wages and disrupt or delay projects. But there are a variety of ways you can prepare your business now to attract and retain tomorrow’s best construction workers.
Find your benchmarks
Adopting industry-standard job descriptions, titles and corresponding salary ranges can help applicants compare apples to apples when deciding whether to join your team. Doing so may also help you keep them once they’re on the payroll.
For example, let’s say a growing HVAC shop needs to hire three mid-level installers, each with between two and four years of experience. In the past, the business typically paid its installers and other employees according to two general criteria — 1) zero to three years of experience, and 2) three or more years of experience — as well as a variety of subjective factors such as job performance.
The danger with this approach is that there’s no benchmark, or standardized reference point, for what employees are being paid for performing specific functions or series of tasks as detailed in their job descriptions. Over time, this ad hoc approach likely will lead to vast differences in pay for similarly titled workers, which can contribute to low morale, high turnover and even potential legal issues.
Benchmarking can ensure that wages and employee benefits (such as health insurance) are meted out consistently and on par with your competitors. The latter will help discourage good employees from leaving to find greener pastures elsewhere.
There are a variety of ways to benchmark your employees’ pay. A common method is to hire an outside consulting firm to perform a benchmarking study for your construction business. If that seems financially out of reach, local industry associations may be able to help and several online references are available, including the U.S. Department of Labor’s Occupational Outlook Handbook.
Meet the millennials
If you’re a baby boomer, a designation typically assigned to those born between 1946 and 1964, chances are you thrive on entrepreneurship, long days at work and a fairly rigid organizational hierarchy.
But consider this: By 2020, half of the U.S. workforce will be millennials. Exact definitions vary, but this generation is most broadly defined as individuals born in the United States from 1977 until a decade ago. This next wave of employees work, live and play very differently from their parents and grandparents, who came of age after World War II.
Here’s some food for thought on millennials as compiled by the Pew Research Center:
• While 84% of baby boomers expect to stay at their current jobs until retirement, only 42% of millennials expect to do so.
• Two-thirds of millennials expect to “switch careers sometime in their work lives,” while 31% of baby boomers expect the same.
• While 19% are now college graduates, “millennials may be on track to emerge as the most educated generation ever.”
Understanding these differences can help you create a construction company that attracts and retains the best millennial talent.
Create growth opportunities
From high-level managers to skilled laborers, top performers from the millennial generation will inevitably look elsewhere in the marketplace if they’re not regularly challenged in their current roles.
One way to keep employees motivated, whether millennial or not, is to ask them about their long-term professional goals and develop a plan based on each one’s response. If you haven’t already, implement an annual review process to assess accomplishments, reward progress toward specific goals, offer training opportunities and financial incentives, and outline next year’s objectives.
Tuition reimbursement for local colleges and management training and certificate programs offered through area trade associations also are great retention tools. These programs may affect your tax liability, however, so work with your financial advisor to come up with a formal professional development program.
Be a destination
With the construction industry appearing poised for a comeback, don’t get caught asking, “Where’s my crew?” Start thinking today about how your construction company can be the go-to destination for tomorrow’s top building talent.
Work Opportunity tax credit extended
Are you ready to start hiring right now? If so, don’t forget about a temporary tax incentive for hiring military veterans and other workers that was recently extended under the American Taxpayer Relief Act of 2012.
The Work Opportunity credit allows employers to claim between $2,400 and $9,600 for hiring former members of the armed services as well as other applicants — including felons, public assistance recipients, vocational trainees and others — who meet specific criteria.
For your construction company to qualify for the tax credit, disabled veterans must have been unemployed for six of the last 12 months and nondisabled veterans must have received food stamps during the last 15 months. Other eligibility requirements apply; the credit is due to expire Dec. 31, 2013.
For more information on this topic, please contact Denice Hertlein at [email protected]