For those of you too young to remember, Catch-22 was a book and a movie, both of which came out in the 60s. It has been described as one of the greatest works of literary fiction in the 20th century. The definition of a Catch-22 is a type of unsolvable logic puzzle sometimes called a double bind.
Employees as Long-Term Assets
There has been a change in how construction companies look at their employees since the great recession. Prior to the recession, construction companies viewed their employees as long-term assets. When the market slowed they would pull in their field people, have them help with estimating, and work as a team to help bring in new work. They understood that this would indeed reduce their profit margins but felt that the short-term pain would produce long-term gains.
Now it seems when construction companies don’t have another project to immediately put employees on, they look at the employee as a liability that they have to charge to overhead instead of an asset to the company. This mentality sets up a generalized anxiety within the organization which keeps everyone looking over their shoulder, and it diverts their attention from the project they are working on. And this is the Catch-22 for both the employee and employer.
What is the Operations Manager thinking during the last 4-5 months of the project?
“Where am I going to put Ken after he completes this project?”
What is the employee thinking during the last 4-5 months of this project if he knows his employer will likely let him go after this project? If they don’t let him go before the project is done, and replace him with a more junior level employee in a cost-saving effort, he is likely thinking this:
“I better take control of this situation and start looking.”
Catch-22 and the Cost of Turnover
There are numerous studies with fancy charts and pie graphs that discuss the cost of turnover and that show the cost of training new employees is more than the cost of keeping people employed during slow periods. Currently there is a labor shortage with no immediate end in sight. Investments in employees and employee retention programs will pay off in the current tight labor market. Keeping employees during slow periods will produce loyalty, which means they will look out for the company. This will result in long-term profits and continued long-term employee relationships, as well as – and maybe more importantly – client relationships.
What’s the solution to resolve this generalized anxiety? The answer is simple and cheap: communication. Employers, talk with your employees about what you are working on. Keep them in the loop. The communication door swings both ways. Employees, don’t make decisions in a vacuum, ask your supervisor what they have in the queue.
Corporate culture will dictate which way companies will handle this Catch-22. How will yours?