Human resources (HR) departments are often viewed as cost centers that regularly incur expenses and rarely earn money for their companies. Though this is a misconception, it can be extremely challenging to strategically position an HR department and streamline its processes so it contributes to revenue growth.
This article explores how living in an era of technological abundance is supplying construction companies and contractors with the tools needed to thrive and ultimately transform HR departments so they contribute to revenue growth for their companies.
Challenges That Inhibit Revenue Opportunities
Workforce Challenges
HR departments across all industries face demanding workloads and experience resource gaps, making it difficult to evolve and monetize the business unit. One study that surveyed 1,793 HR professionals found that 70% are working beyond capacity while 61% don’t have enough staff.1
The construction sector’s unique demands can further exacerbate HR challenges. Since construction companies work on a contract-by-contract basis, their workforce needs continually change and the hiring cycle never truly closes. It may also be necessary to hire and onboard many workers in a short time, which has become an increasing challenge as the potential construction workforce shrinks.
Moreover, administrative requirements like payroll and timesheet management can turn into a complex burden for HR staff to tackle, particularly if employee compensation rates are task-dependent or site-specific.
Manual, Paper-Based Processes
HR departments have many manual, paper-based processes. HR personnel are often tasked with managing dozens of mundane, repetitive activities that continually impact their productivity, preventing them from performing high-level thinking and complex tasks that bring true value to organizations.
At the same time, the more strategic parts of workforce management may still be done manually or via systems that don’t integrate, causing employees to spend more time on administrative tasks rather than value-added activities.
As construction labor costs continue to increase and given the industry’s challenges with recruiting and retention, having HR teams spend time on manual or inefficient tasks undercuts their ability to manage the workforce in the way that generates the most revenue for the organization.
The ways in which companies leverage emerging technology is key to linking HR departments to revenue and business success.
HR Technology Enhances Performance
The purpose of HR is to effectively manage the workforce for maximum impact. HR runs the gamut from recruiting and retaining the best talent to mitigating compliance risk.
HR technology automates processes for both HR staff and employees, offering three key advantages:
- Freeing up valuable time
- Enhancing the HR experience
- Increasing the accuracy of data across the HR continuum
While not huge drivers, using HR technology can also reduce some hard costs, such as paper, toner, printer/copier maintenance, and even storage space for all those forms. These advantages underpin the ability of HR to generate profit and value for the organization.
When evaluating technology, decision-makers — whether it be an owner, CFO, or HR director — should be looking for tools and software that can:
- Maximize the value of the company’s people
- Minimize the cost of doing business
- Help employees do more with less effort
- Ensure adequate staffing for growth and success
- Lower risk
- Increase retention
Automation of workforce functions
Leveraging technology to automate HR can take various forms across key workforce functions that impact both HR staff and employees.
Benefits Enrollment
Employees can self-enroll in benefits programs or make changes to their existing options as allowed. Empowering employees to manage this process digitally allows HR professionals to reclaim hours they would otherwise spend on benefits-related paperwork and administrative tasks.
Core HR
Setting up a centralized system for core HR tasks like updating employee information, viewing pay stubs, and accessing company policy documents can drastically improve productivity by automating functions.
Payroll Processing
The American Payroll Association (APA) estimates that automation cuts payroll processing costs by up to 80%.2 Additionally, a 2021 study placed a numerical value on employer savings, finding that automating payroll and tax-related tasks can save businesses $24,500 annually.3
Tracking Employee Time & Attendance
Manual time and attendance entries are prone to error and vulnerable to “buddy punching,” where employees can clock each other in and out. In addition, the APA estimates that using paper time cards result in 10 minutes of time theft per employee per day.4
Workforce Management Automation
HR technology supports the key components of workforce management including hiring employees, training them, and managing their performance. Let’s look at how automation in each of these areas streamlines and enhances the process.
Recruit With an Applicant Tracking System
Recruiting new employees is a lengthy, costly process — and the number of job openings in construction isn’t helping to alleviate the issue.5
Businesses spend an average of $4,700 per position on the traditional hiring process.6 But for the construction industry, where skilled trades positions are many and qualified candidates are scarce, recruiting top talent becomes even more challenging.
An applicant tracking system allows hiring teams to track, manage, and store information about candidates in a centralized system. It creates efficiencies across nearly every step of the hiring process, generating savings by simplifying candidate searches, reducing internal and external recruiting costs, and increasing retention rates.
Job Postings
Employers can expect to pay upwards of $500 for a 30-day listing on an online job board.7 But construction companies aren’t typically filling one or two positions per year — they might hire 100 employees for a single contract.
An integrated applicant tracking system automates job advertisement distribution, freeing up recruiters to focus more of their time on sorting, screening, and stacking incoming candidates — or, better yet, meeting face-to-face with potential workers at outreach events.
Candidate Screening
Construction projects risk going over schedule without proper staffing, and companies can’t allocate resources to new business until those projects close out. Hiring speed is imperative to sustain the growth and profitability of the business, but according to the Associated General Contractors of America, 91% of contractors are struggling to find qualified workers.8
An applicant tracking system can help prescreen and rank candidates based on criteria tailored to a company’s needs, enabling hiring teams to find and connect with ideal candidates faster.
Turnover risk also decreases with the right candidate, meaning that the company’s investment in the new hire won’t go to waste. Once applicants are registered in the applicant tracking system, their information can easily be pulled and reviewed to help fill future openings.
Automated Offer Letters
Getting one candidate, let alone dozens, to sign an employment agreement can be time-consuming for HR staff. Employers can use an applicant tracking system to fill out offer letters digitally, request electronic signatures, and track the status of completion up the chain of command for multiple applicants.
Once completed, companies can also configure the applicant tracking system to distribute onboarding and first-day instructions, facilitating a seamless onboarding workflow while eliminating rudimentary tasks from the HR team’s daily checklist.
Meet Compliance Standards
Employers must comply with various requirements established by the federal government, including the Affirmative Action Program, Vietnam Era Veterans’ Readjustment Assistance Act, and Equal Employment Opportunity. Businesses must also maintain adequate records and periodically compile reports to prove their compliance.9
Without an applicant tracking system that automatically generates reports from its database, HR teams can spend days collecting necessary documentation. Companies could also face
penalties for noncompliance if a paper document is misplaced.
For construction companies awarded federal contracts, penalties could mean federal contract suspension, cancellation, debarment, and being blacklisted in the Federal Register.10
Learning Management Systems
Ongoing training is important for productivity and retention, but it’s also a fundamental part of maintaining a safe work environment and avoiding costly penalties. Employees who fall behind on their certifications put themselves, their peers, and the company’s reputation at risk.
To put this in perspective, a single Occupational Safety and Health Administration (OSHA) violation can cost businesses up to $16,131 per violation.11 Construction companies pay for direct costs like medical bills, workers’ comp, and litigation as well as indirect costs such as personnel replacement and schedule delays. Prevention is key, and a learning management system can help.
Learning management systems use data to conduct, track, and report on company training, including everything from policy and culture training to OSHA safety certifications.
A learning management system can help construction companies with such tasks as compliance tracking, upskilling, and preventing damages.
Compliance Tracking
Learning management system automation aids in risk avoidance by enabling companies to easily track expiring safety training and certifications for local, state, and federal requirements, keeping workers safe and companies from incurring fines for compliance violations.
Most systems have notification features that automatically send reminders when expiration dates are coming up, helping both employees and employers keep track of deadlines.
Upskilling
Companies can establish virtual learning portals where employees can access all required training and additional coursework to help level up their craft skills.
Upskilling supports employee engagement and retention, and it enables businesses to pull from their existing workforce to fill roles that require specialty skills instead of recruiting a new person with that unique skill set.
Preventing Damages
In addition to adding to undue personal safety risks, underqualified employees amplify the potential for damaging construction equipment and property due to improper use. Accessible training and certification tracking equips teams with the knowledge needed to avoid these types of situations.
Onboarding Software
Even for companies with a structured process, onboarding new employees without technology can be slow and taxing. About 42% of HR managers will spend three or more hours per employee manually collecting and processing onboarding information.12
Companies inevitably pay for every minute of inefficiency, but their potential losses don’t end there. A poor onboarding experience is directly linked to increased turnover rates, meaning the business will need to foot the replacement bill and bid farewell to their initial hiring investment (about $4,700 per hire, as mentioned previously13).
Onboarding software automates many data-entry tasks involved in the process, capturing the critical information the business needs to get new employees up and running quickly with fewer data input errors.
Onboarding software can help with such tasks as completing onboarding paperwork, expediting group orientations, reducing human error, and compiling information for tax credits.
Complete Onboarding Paperwork
Automation streamlines onboarding workflows, effectively lowering staffing costs by eliminating time-consuming manual data entry (and the inherent possibility of human error).
It also allows new hires to work quicker and improves their onboarding experience, which ultimately increases
retention rates. A great onboarding experience can improve new hire retention by 82%.14
Complete Group Orientations Faster
It’s not uncommon for contractors to onboard multiple employees during the busy season or for seasonal work.
Traditionally, these groups will spend hours in a jobsite trailer filling out documents. Instead, HR departments can procure laptops or tablets that workers can use to complete their onboarding documents onsite. The information is automatically uploaded to the system without additional handling from an administrator or HR professional.
Minimize Risk of Human Error
With digital onboarding documents, HR teams won’t spend time deciphering illegible handwriting or chasing down employees in the field for missing information.
Compile Information for Tax Credits
Businesses can offset some of the costs incurred throughout the hiring and training processes by taking advantage of government tax credits. As part of the onboarding process, employees provide demographic information, which companies can gather to qualify for federal tax credits.
One example is the Work Opportunity Tax Credit, which incentivizes employers to hire people from groups who would otherwise face barriers to employment. Participating companies can earn a credit between $2,400 and $9,600 per new hire, depending on the worker category, hours worked, and wages earned.15
Performance Management System
The Great Resignation that impacted many white-collar jobs led employers to contemplate employee satisfaction.
The Pew Research Center surveyed 6,627 Americans across all industries to understand better why people quit their jobs, finding that 63% left because of a lack of opportunities for advancement.16 The cost to hire a new employee is already high, but replacing a seasoned one is even higher, especially in construction where experienced workers are at a premium.
A performance management system supports a company’s retention strategy to mitigate turnover and promote continued growth. It also tracks and stores information regarding an employee’s goals and performance.
Facilitate Regular Feedback
Research shows that regular feedback fuels both employee engagement and productivity. According to a recent survey, 85% of employees who have weekly check-ins with their managers report high engagement.17
An annual performance review is a key checkpoint, but it’s not enough. A performance management system grants supervisors and project managers better visibility into an employee’s daily performance, ensuring they can receive ongoing, comprehensive feedback on a project-by-project cadence.
Create a Clear Career Path
Performance management allows supervisors to establish clear goals and expectations for their teams. Employees who perform outstandingly can be easily identified and rewarded, incentivizing them to continue working hard.
This process also allows companies to progressively develop a roster of high achievers who can be promoted to vacant leadership positions.
Capture Performance History
When performance management is handled on paper or spreadsheets, it can be challenging to track an employees’ accomplishments and advancements over time. Having a dynamic history of all performance conversations and feedback enables both the employee and organization to better understand and address performance over time.