At least once per week, a client asks me the going rate for salaries in their market. Uncertainty about current salary levels is understandable. We are now on par with where we would have been between the years 2008 and 2013, had the economy not gone into a recession. We did not arrive at today’s salary levels through conventional means, i.e. typical 4% per annum salary raises. We arrived at today’s salaries through five to six years of frozen salaries and three years of double digit increases. The situation is complicated by the fact that today, we are seeing (and will continue to see) a scarcity of talent that is accelerating the escalation of salaries.
Salaries are only one piece of the compensation pie. Even if you know for certain that your company’s salary levels are on par with your competitors, there are the other table stakes every construction company needs to have in place in today’s market.
A Construction Compensation Quiz for 2017
I have put together a simple quiz to help you determine if your construction company is competitive in terms of total compensation in today’s market. Answer yes or no to the following questions:
- Do you currently fund your employees’ 401(k) at a minimum dollar-for-dollar match up to 3% of their base salary?
- Do you provide Senior Project Managers and above a vehicle or a minimum of $600 per month transportation allowance, plus a gas card?
- Are the total costs of health insurance for family coverage less than $400 per month?
- Do you provide maternity and paternity leave?
- Do you provide leave for special situations (such as caring for aging or ailing parents or sick children) for a minimum of two weeks per year, on an as-needed basis? (Very few are doing this, but more companies should be talking about it.)
- Do you offer flex hours to allow employees to work outside of the office at least one day a week? (Note: Millennial workers have repeatedly told me that they view freedom and flexibility as the most valuable benefits a construction company could offer.)
- Do you provide life insurance at a rate of at least two times base salary?
- Do you provide some matching for employees’ children if they choose a college major related to construction?
- Do you pay bonuses based upon achievable metrics?
- Do you provide employees the opportunity to grow in their construction careers?
- Is it easy to understand how bonuses are calculated?
- Do you provide at least two reviews per year (once per six months), one for salaries and one for bonuses?
- Are you investing in training in the latest technology including iPads and Revit software for BIM?
- Do you either provide an in-house gym or reimburse for gym memberships?
- Do you provide your employees with an errand runner service so they don’t have to spend their valuable time picking up laundry, changing oil, going to the post office, etc.?
- Do you have an emergency (rainy day) fund contributed to by employees, on a voluntary basis, that is matched by employer contributions?
- Do you recognize children and spouses of employees for birthdays and other special events?
- Do you recognize spouses at office functions and through cash or prize drawings at annual parties?
If your company did not answer yes to a majority of these questions, you are vulnerable to seeing some of your most valuable talent taken by one of your competitors.
Now is the Time to Invest In Your People
We can give atta boys and atta girls all day long, but nothing speaks louder than an expression of your core beliefs. Actions demonstrate how a company views people. The willingness to share in the wealth says more about your company culture than you might think. Is your most valuable resource in your construction company seen as means to an end or an end in itself? The proof is in the retention numbers.
We are in the midst of the best construction market we have experienced in the last twenty years. Now is the time to invest in your people. If you do not, be assured that your competitors are willing to make the investment.