Effects of the Construction Labor Market
Back in the mid-2000’s it was not uncommon for a construction project team to sit on the bench for up to four to six weeks. We are now seeing signs in the construction labor market that are reminding us of those days, and then some. Last week, a Construction Project Manager in a western state told me that he has been sitting on the bench, along with his entire project staff (including two Assistant Supervisors, a Lead Supervisor, and a Project Engineer), for the past six months.
The fact that this company is paying hundreds of thousands of dollars to keep a team on the bench is the clearest sign we have seen of just how hot the construction labor market is right now. This company knows that, in this market, the value of retaining those people is greater than the cost of the overhead.
Paying for the bench is something we haven’t seen in awhile and we have never seen it to this degree. In previous years, no construction company would ever absorb that type of overhead for that length of time. The days of letting the crew go at the end of the job and hoping they are available to pick them back up when the next job begins are over. These days you cannot wait until the shovel is in the ground to look for people.
Smart Retention Strategies for a Hot Candidate Market
Paying for the bench is one way to ensure that you have a crew ready to get to work in such a tight candidate market, though it is certainly not the only one. It is more important than ever that you communicate effectively to your people what their future with you looks like. Skilled construction workers are very aware that we are in a hot market right now. Don’t leave your valuable employees’ futures to their imaginations. Make sure your workers know that they are going to be taken care of. Workers who are left to speculate about the future are more likely to be recruited by another company. Don’t make promises you don’t intend to keep — be proactive.
Your retention strategies should be updated to accommodate the current reality that good people are hard to hold onto. If you have a project ending, make sure you communicate with people what your plans are for them in the future. You may need to come up with some innovative strategies for keeping them on board.
Look Beyond Employee Retention
This candidate-hot market is more than a retention issue; it impacts recruitment, as well. When people are getting paid to sit on the bench, it becomes an even greater imperative to have a fast, efficient hiring process. There is a tremendous amount of competition for each candidate. Transparency is another key here. At the time of the interview, give candidates a firm time frame for the rest of the process and make an offer as quickly as possible.
Whether they are paying for the bench, making their hiring process more efficient, or updating their retention and recruitment strategies, smart companies are being realistic about the market and taking steps to respond accordingly.