High Employee Turnover as a Silent Construction Manpower Crisis
Human capital is one of a company’s largest asset. Today, in order to succeed and achieve operational efficiency, overseas construction companies rely heavily on reliable, productive and competent labor force. These employees play a crucial role in the success of the company. As Alfred Marshall once said, “The most valuable of all capital is invested in human beings.”
Losing an employee may not hurt your business but losing a dozen more may cause your company to stumble. Furthermore, losing a bad employee can give way to a better one, however, not all loss of employee can bring back good to your company. You may find and hire new people to work for you, but are you willing to sacrifice your company’s delay in production?
Replacing your employees can be damaging to your company. According to an article written by Heather Boushey and Sarah Jane Glynn, HR experts of Center for American Progress, replacing your employees may hurt your business’ productivity for it all results to increasing direct costs and turnover costs.
Now, despite the unpopularity as a career choice, the construction industry is one of those labor markets struggling to get along with the continuously growing demand for output. Apart from skills shortage, the ADP Workforce Vitality Index 2017 reported that one of the major but unnoticed problems that affect construction companies and contractors is the high turnover among employees. Turnover refers to the rate at which workers voluntarily leave the company. This has a negative impact most especially in a specialized industry like the construction sector. Turnovers pose risks from losing a skilled machine operator to a top engineer.
Finding and retaining the best employees is a competitive edge in the construction industry. However, addressing turnover has been not prioritized and was deemed normal by some human resource managers. Executives should be reminded that turnover is a sign of unhappiness in the workplace. It is beyond cancerous.
In a journal entitled “Investigating Employee Turnover in the Construction Industry: A Psychological Contract Perspective” published in 2016, authors identified what predicts employee’s turnover in the construction industry. Apparently, emotional exhaustion emerged as the top reason for the younger construction workers to suffer greater levels of exhaustion and who are more likely to exit the construction site.
Other causes of turnover included; conflict with management, toxic work environment, and job dissatisfaction. This problem constitutes unprofessional management, poor compensation, insufficient recognition, or even isolated cases like discrimination in the workplace and bullying among workers.
The Cost of Turnover
This industry long suffered from workers who keep on looking for better working environment, salary increases, and shorter working hours. Persistently high workers turnover affects operational efficiency and morale of employees. Without efforts to keep employees, a company may find it hard to establish a lasting culture within the organization if people continuously come and go.
High turnover hurts productivity and revenue due to constant hiring and training of new employees. This greatly affects continuity of services which is vital for a company to compete.
Based on a study of the Society for Human Resource Management, the cost of losing a salaried employee can cost as much as twice as their annual salary. This is a summation of the exit and separation costs; cost of recruiting a replacement; training and onboarding costs; lost expertise; administrative costs; and cost of lost productivity. This doesn’t include all the intangible and untracked costs prior to resignation and recruitment of vacated position.
Turnover may also push other employees to follow suit and leave you crippled with impaired human resources.
Effective Recruitment and Employee Retention
Managing employee turnover and exerting efforts toward employee retention is not just a tough job among contractors but among construction recruitment agencies as well where the burden of attracting skilled professional starts. Retaining employees and reducing employee turnover could be managed as early in the recruitment stage.
Turnovers, which may not be an issue within the workplace, might be an issue on recruitment when we initially hire the wrong person. Successful recruitment practice in construction should not just involve finding capable and qualified workers, but also those who can fit your work environment and could stay for a longer term.
Recruiters can easily spot job hoppers by simply looking at their resumes and by checking their references. During the recruitment stage, employees who are most likely be committed is easily detectable.
As soon as they landed on the job site, employers should find time to check out to their employees to pre-diagnose any chance of turnover. Establishing a comfortable environment and an ambiance of mutual respect among supervisors and workers could also cut issues that lead to turnover.
Finding a good employee is tough, and it will be more difficult if we have to lose the ones we already got. We can no longer extinguish the bills once it gets burned. We can no longer take them back once they walked out your door.
Seasoned recruiters will always have an eye for star performers. Learn more of our best practices in talent acquisition and let us collaborate to achieve your business goals.
ABOUT THE COMPANY: Rensol Recruitment and Consulting, Inc. is the fastest growing recruitment agency in The Philippines. A career consultant that aims to go above and beyond the level of expectations of both the aspirations of the candidates and the dream team standards of employers through providing exceptional opportunities and unparalleled quality-driven recruitment services.
Upon finishing a journalism degree with flying colors, he has discovered his niche as a freelance journalist in a health and lifestyle journal, a travel magazine, a science blog, multiple news websites, various advocacy blogs, and a social entrepreneurship network. His innate affair with writing eventually brought him to the business of recruitment and human resource. A writer and an advocate at heart, serving people through his capacity for words has been his passion.
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[…] The job requires long hours and a stressful work environment. Most of whom worked overnight, during the evening, weekends, and long hours. Workers spend irregular hours that makes people with the right skill turning away from this industry. […]
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