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How Employee Recognition Can Address Construction’s Labor Issues

11/21/19 9:45 AM

Just like claiming outstanding payment for a finished project, hiring and retaining skilled workers are among the persistent challenges in the construction industry today. While the industry has added 148,000 jobs over the past year to match the increase in construction demand, many contractors still report difficulties in filling jobs. Around 58% of contractors found it difficult to find skilled workers in the last quarter of 2018, a significant drop from the same period in 2017. 

Employee turnover has a negative impact on any industry, but especially so in the construction sector. A construction firm’s workers are arguably its greatest asset. From field workers to project managers, construction work is highly specialized. The completion of construction projects is at risk if even just one of them leaves the job. And compounding the problem is the time and financial costs of finding and training new people to fill jobs. 

That is why it is important for HR managers and construction business owners to explore strategies that will help engage and retain construction professionals--from field workers and back-office staff for lien management and collections to project managers. Without an employee engagement plan in place, it will be easier for your employees to find greener pastures in another company. And one of the best ways to engage employees is an employee recognition program. 

The Importance of Employee Recognition in Construction

One of the most important metrics in construction work is productivity. If your employees are productive, then your firm gets to finish a project as planned or even earlier and move on to the next. Employee recognition is important as it improves the morale of your workforce and increases their level of productivity. It relieves the stress commonly associated with construction work and keeps employees engaged in their work. 

In addition, recognition is not only an incentive to motivate employees, but it is also an opportunity for you to reinforce your desired culture. A huge part of forming company culture is concerned with incentivizing good attitude and behavior.  By linking your recognition program to your core values, you will be able to cultivate employees that embody these traits. 

However, not a lot of companies see the importance of employee recognition. Many company leaders are so focused on achieving company goals and making profits that they often forget the people that help them realize these goals. According to a Gallup analysis, only one out of three employees received recognition or praise for their work in a given week. For the construction industry to address its labor shortage issue, company leaders need to implement a strong employee recognition program to retain top talent.

Tips on Implementing Your Employee Recognition Program

  1. Not every type of recognition requires monetary rewards. Public recognition through awards in end-of-year programs and a feature in the company newsletter or blog are great ways to show appreciation. 

  2. Employees leave managers, not companies. This may not always hold true, but managers have a direct impact on your employees’ engagement. The same Gallup analysis showed that 28% of employees cite their manager as the one who gave their most memorable recognition. Encourage project managers and team leaders to provide personal feedback to team members. Emphasize the importance of recognition for employee satisfaction and its effects on productivity. 

  3. Your employee recognition program should have clearly defined criteria. Your employees will want to know what it takes to get recognition and what part of work performance they need to improve. Make sure that these criteria are attainable and aligned with your purpose, brand, and culture. 

Employee recognition is an essential part of any workplace and even more so in the construction industry. As the industry experiences difficulties in filling jobs and retaining talented workers, it is important now more than ever that company leaders explore opportunities to show appreciation to their greatest assets. 


About the Author: 
Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors, subcontractors, and material suppliers with late payments. Handle.com also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing.

Download: How Employee Recognition Influences Attitude & Behavior in the Workplace 

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