According to the U.S. Chamber of Commerce, nine out of 10 U.S. contractors report skilled labor shortages. Yet, cities such as Atlanta, Houston and Nashville, Tennessee, seem to be permanently under construction. There are simply not enough qualified employees to fill the ever-growing number of projects.
Before the 2008 recession, there were 7.7 million construction workers; today there are 7.1 million—meaning 600,000 workers have not returned to the industry. Slow population growth and an aging workforce also have contributed to the lack of available labor.
Following are six risk management strategies construction companies should consider as they face today’s workforce challenges.
1. BE AN EMPLOYER OF CHOICE
One of the best discussions on how to build a vibrant workplace can be found in Simon Sinek’s TED Talk, “Start With Why.” Sinek argues that great companies put the “why” before the purpose. “Why does this company exist?” “Why should people care?” He states that there are two ways to manage employees: either through manipulation and fear, or by empowering people through structure, inspiration, example and loyalty.
Contractors should strive to provide value for their employees rather than just give them tasks to complete. One way is to offer employees a vision beyond just being a builder and instead focus on their passion for developing communities, building careers or creating win-win relationships with subcontractors and other suppliers.
Construction company websites are often solely focused on attracting new business opportunities, missing an opportunity to market themselves to new employees. The best sites showcase community improvement initiatives or highlight employee benefits.
2. ESTABLISH A BEST-IN-CLASS SAFETY PROGRAM
It’s not a surprise that safety consistently ranks high in employee surveys, given that the risk of injury is high. To mitigate risk, contractors should ask the following questions:
- What is the safety training plan for employees?
- Are executive teams held accountable for safety performance?
- Are there corporate and site-specific safety policies?
Communicating the proper safety protocols and ensuring that employees are fully trained will raise employee awareness and create a safer work environment. In addition, contractors should reward employees for going a certain number of consecutive days without an accident. This will increase employee buy-in to safety protocols.
3. ESTABLISH A CLAIMS MANAGEMENT PROGRAM
When an accident occurs, how an organization responds from a claims perspective is essential to maintaining employee happiness and productivity. People want assurance that their company will treat injured employees in a professional and caring way. The first question an employer asks an injured employee should never be: When are you coming back to work?
Even worse, the last thing that an injured employee wants is not having their claim processed. Workers’ compensation disputes can harm corporate culture and create friction between employees and employers.
The best employers stay in contact with injured employees. The goal is to help employees understand they work for a company that is concerned for their well-being. This type of culture improves morale among employees, which is a key risk mitigation measure against loss of talent.
4. PROVIDE EXCELLENT TRAINING
Construction companies should establish training that not only prepares employees for the jobs they will need to complete, but also demonstrates a commitment to career-building. Examples include establishing a training budget to allow for mentoring programs or providing additional training to high-potential employees.
Furthermore, shifting millennials’ perception of the construction industry is critical to attracting new employees. Offering internship programs and apprenticeship programs that provide hands-on experience can expose younger generations to careers in construction.
5. RETAIN GREAT PEOPLE
While every company wants talented millennials, construction companies also must maintain a core group of experienced workers. A healthy work culture thrives on recognition programs and bonus programs to incentivize and retain quality personnel.
All employees want to be recognized for their work and compensated fairly. Insurance organizations can help contractors design compensation and retention programs that include safety programs, phased-in retirement and flexible work arrangements.
6. DON’T STRAY FROM THE COMPANY’S VALUES
One concerning trend is that some construction companies have relaxed drug and background checks to hire more employees. While this may attract more employees, an inferior workforce will simply lead to more accidents on the job and create more expensive claims. Furthermore, hiring an employee who does not meet hiring standards may lead to more absenteeism and turnover.