As the economy recovers and demand for new work returns, a shortage of experienced and capable industry professionals – particularly at the management and executive levels – is hindering many businesses’ ability to grow.
Competition to keep these valuable, high-performing employees is at an all-time high. A strategic performance and reward system is one of the most effective ways to retain your company’s top performers and grow profits.
A balanced compensation and ownership plan that incentivizes performance can also improve recruitment and retention efforts, positioning the company to achieve its business goals.
How Did We Get Here?
Key economic outlooks from such organizations as CFMA, ABC, AGC, AIA, and McGraw Hill all seem to predict relatively strong economic growth.1 As demand for construction projects returns to pre-recession levels, business owners and CFOs should be pleased. However, without enough employees to complete the work, responding to this demand is challenging.
This problem is not limited to the U.S.; the Construction Industry Training Board (CITB), a United Kingdom-based organization, recently surveyed approximately 300 construction employers and found that 42% struggle to recruit talent with the desired skill sets. The impact of this problem is significant: 18% of construction employers surveyed by CITB indicated this issue had hampered their growth in the past few years, and 5% of respondents indicated that it was jeopardizing their sustainability.
What has caused the inability of construction companies to close the hiring and retention gap? It can be attributed to demographics, downsizing, and competitive forces from within and outside of the industry.
Baby Boomers Retiring
One of the greatest hurdles for construction companies trying to ramp up hiring and improve retention is based on simple demographics. Large numbers of skilled professionals in the baby boomer generation are now retiring and will continue to do so throughout the coming decade. Baby boomers have played a major role in the development of the construction industry, and as they leave the full-time workforce, they take a high level of expertise and knowledge with them.
Recent Cost-Cutting Strategies
The second factor in the hiring and retention gap is the ongoing impact of the recent economic downturn. During the recession, as projects slowed and stopped, many businesses had to cut costs by downsizing the workforce. Skilled people left the industry because there was simply not enough work for them.