If you’re in construction, you’ve seen chaos on jobs. You can get so busy dealing with it, that you don’t actually have time to determine the cause.
Chaos is a symptom of inadequate systems. Once you find the root cause of chaos and get people to think in a systematic way, you can put the right systems in place to eliminate a lot of confusion.
Employee turnover is an understandable result of chaos. People get tired of constant stress in their job. A paycheck doesn’t matter so much if there’s nonstop chaos, stress and bad experiences. It is exhausting physically and emotionally to be in a chaotic environment. And the hard truth is that chaos can often be traced back to poor leadership.
Quality leadership is more important to the health of a company than we might think at first. Some companies are so production driven that their project-focused culture drives employees away. But a culture based on good leadership and employee encouragement results in lower turnover and smoother operations. We must bring people into the culture and make them feel heard in order to get higher productivity.
There’s been a great deal of discussion the last few years around a skilled labor shortage in construction. A number of explanations have been posited, including retirements and a workforce that just isn’t interested in construction jobs. However, if we look a little deeper, would we find that what seems like a shortage of workers is actually perpetual job openings? Are those job openings caused by growth, or are they caused by turnover?
The separation rates in construction are among the highest of any industry – 60% of employees leave or change jobs every year. That is a breathtaking statistic. Until March of 2020 the economy was booming, and the housing market was strong. And yet, the separation rate in construction related businesses was increasing. Obviously, the cost of turnover that high is substantial to the construction industry – thus the alarms raised about the perceived labor shortage. Fortunately, the root problems of poor leadership and company culture can be addressed successfully. With quality leadership and a culture of appreciation for people, employee turnover can be addressed.
When companies can shift the focus of their business from building projects to building people, that’s the beginning of a healthier culture. Now this may sound easier said than done but it is a problem that construction must solve quickly in order to compete.
If companies could decrease their employee turnover/separation problem, the skilled labor shortage might be solved. There are about 7 million people working in construction today. If they were truly engaged in their jobs, they’d be more likely to stay, build their skills and continue to contribute to the company’s success. It’s a lot less expensive to keep trained employees than to hire 40% of your workforce anew every year and then train them on your processes. No wonder the construction industry has an efficiency problem with having to constantly train new people every year.
Another part of a healthy culture is rewarding employees for the things they do well. The simple truth is positive reinforcement works. Negative reinforcement, for instance disciplining employees for low productivity, does not work in the long term. People want to be appreciated, so be sure to catch employees doing the right things. Get to know your people and let them know you care. It’s human nature to enjoy being recognized for doing things well. I mean, who doesn’t like to feel like they matter and they are doing something of importance?
Once your company has the right systems in place, it can harness chaos and face disruptions more adeptly and successfully.
In the 50th episode of the Bridging the Gap podcast, I tackled this very topic with Todd Dawalt of the Construction Leading Edge podcast. Listen to the full episode today and ask yourself is it a “Labor Shortage or Delusion?”