construction employee turnover

How to Mitigate Risk of Construction Employee Turnover or Shortfall

There is no question that high construction employee turnover negatively affects any construction firm and causes shortfalls that affect the bottom-line. Experts say that it costs more than twice the employee’s salary to find and train a new employee. Aside from the monetary losses, high turnover takes a toll on overall employee morale and job satisfaction.

If your construction firm is not prepared to effectively mitigate the risk of employee turnover, you will face decreases in productivity, increases in costs due to employee overtime and costs associated with finding a replacement, as well as incur time losses due to employees taking on a heavier workload and time being spent looking for new employees. These shortfalls of turnover often persist even after a new employee is hired due to the time it takes for the employee to adjust to a new company and catch up to the skill level held by the previous employee.

What might be causing high construction employee turnover at your construction firm?

  • Pay and benefits are not competitive enough.
  • An employee’s skills are not a good match for the company’s needs.
  • Another company has superior equipment and materials.
  • The employee does see a potential for growth within their current company.
  • The employee does not feel valued at their current company.
  • There is uncertain job security at an employee’s current company.

How does a construction firm mitigate the risk of construction employee turnover and shortfalls?

By carefully tracking each employee’s length of employment, and reasons for leaving determined by their exit interview, subcontractors will be able to get a better understanding of what positions have the highest turnover and why. Once the subcontractor knows what is causing the turnover, he can take steps to improve those positions and make them more attractive for long-term retention.

Although the underlying issues of employee turnover differ from company to company, here are some of the common ways to mitigate high employee turnover:

Productivity Improvements

One way to overcome the shortfalls that often come with high turnover is by improving productivity. This can be done by implementing a construction technology that will allow the subcontractor to streamline manual processes, thereby allowing more time for productive work to be done. Having construction software in place will allow the team to do more with less when facing turnover or absenteeism from co-workers. Similarly, having a mobile technology will allow all team members to be able to work on different things at once, no matter their geographical location. This will allow fewer people to get more done by enabling them to seemingly be in more than one place at one time.

Mentorship or Freelance Programs

A great way to ensure the passing down of knowledge as the older and more experienced employees begin to leave the industry is by allowing these older employees to mentor the newer employees before they retire. Companies can also invite retired employees to do freelance work on projects that they have expertise in. This will also allow for the passing down of knowledge and also provide an incentive for retiring employees to perform well toward the end of their career to be considered for this freelance work opportunity.

Early Detection of Signs

Often, employees show signs of job dissatisfaction and red flags that should signal to the subcontractor that they may be facing a turnover issue. These signs can include absenteeism, a decrease in job performance and quality, possible signals of job hunting. These signs will be more easily recognized if the subcontractor takes the time to know his employees, talk to them about their concerns, and is aware of their standard level of job performance and quality. If the subcontractor can recognize these signs, he can talk to these employees and see if there is anything in the company’s power to keep them satisfied with their current job position. By doing this, changes may be able to be made that will keep the employee from looking for employment elsewhere.

Standardize processes

When training new hires, it is important to make the transition as easy as possible to speed up the process and ensure a high level of understanding on the part of the employee. Many construction project management solutions provide standardization that can aid in getting new-hires up to speed as quickly and efficiently as possible.


As the construction industry ages, the subcontractor firm must be prepared to deal with turnover in the most efficient way possible. The subcontractor should begin implementing these best practices now, to be prepared whenever a turnover issue arises.

Resources: PM Champion | Harvard Business Review  | Biz Filings