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Employee with Permission Copyright © 2020 by the Construction Financial Management Association (CFMA). All rights reserved. This article first appeared in CFMA Building Profits (a member-only benefit) and is reprinted Employee with permission. BeyondRetention Bonuses: Five Considerations By Dan Schwartz & Kelly Postlewaite Gone are the days when an employee would retire comfortably from the company that they worked for most of their (if not their entire) career. In recent years, instead of focusing on growing within a single organization, the increasing trend is to continually seek newer and more exciting opportunities. Much like the market for mobile phones and televisions, employees know there is an upgrade right around the corner, making employee retention a top issue for many organizations. Why Is Today’s Competitive Labor Market Leading to More Voluntary Turnover? While unemployment rates are at an all-time low, career options are also at an all-time high. Employees can choose a career in vir- tually any industry, and with available online education, it’s easier than ever to gain the necessary skills to make a transition at any point in their careers. This transformation in our economy has led to unprecedented levels of voluntary turnover. According to the Bureau of Labor Statistics, 3.5 million people voluntarily left their employer in November 2019,1 which is an increase from two million in November 2009.2 With the inclusion of new roles, recruitment marketing tactics, and upgraded total rewards packages, companies continue to find ways to attract new talent and provide rewarding career oppor- tunities, thus creating increased competition in the marketplace. REASON 1: JOB GROWTH REMAINS HIGH The Washington Post recently reported that 266,000 jobs were added in November 2019 and the unemployment rate was at 3.5%, a 50-year low.3 Specifically for the construction industry, job growth is expected to rise 11% by 2028, which is much faster than the average for all occupations, according to the U.S. Bureau of Labor Statistics.4 Employers are constantly looking for ways to expand and inno- vate, which has led to the creation of new departments and roles as the economy has grown. Not only do job seekers have endless opportunities at their A specific benefit on the rise in the construction industry is fingertips, but employers also are competing for top talent, an apparel allowance where contractors provide employees often seeking already-employed individuals who are experi- with funds to purchase high-quality boots and apparel for encing career success. protection and comfort on the jobsite. Simply put, it’s a candidate’s market where employees leave Companies are continuously evaluating their competition and for better opportunities elsewhere – even if they’re engaged upgrading their own total rewards packages to stay competi- and happy in their current roles. tive. This trend is also influencing employees and encouraging them to regularly evaluate their current benefits package REASON 2: CONSUMER MARKETING TO JOB SEEKERS against the potential of another company. The rise of social media and networking sites (such as LinkedIn) makes it easy for employers to target prospective Why Are Employees Leaving? talent, as candidates have increased visibility. Organizations are taking advantage of these tools to proactively reach out We’ve established that the competitive job market has sev- and nurture relationships, which often leads to job oppor- eral contributing factors leading to voluntary turnover. But tunities. The combination of these trends and the rising what specifically causes an employee to be dissatisfied and number of career options available has caused companies start looking for opportunities elsewhere? Based on a survey, to step up their recruitment marketing tactics. Instead of the top drivers of workplace dissatisfaction in 2018 were: simply posting a job and waiting for candidates to apply, • Future career opportunities organizations are employing marketing strategies similar to Compensation those aimed at increasing sales or bringing in new business. • • People management Applicant tracking systems have evolved to function like cus- • Development opportunities5 tomer relationship management (CRM) systems, where com- panies can send targeted e-mails and job recommendations as FUTURE CAREER OPPORTUNITIES well as customize a candidate’s experience to help prospective While not everyone wants to be a CEO, many employees talent buy into the organization’s employee value proposition. desire to advance in their careers and have increased respon- In addition, larger companies are employing entire recruit- sibilities. Employees want to know that there’s a future for ment marketing teams dedicated to ensuring that the com- them at the company and that management will support them pany’s employment brand is effectively communicated to the along their journey. Companies that do not possess a clear right audience at the right time to attract new talent. path upward for their talent will often cause their employees REASON 3: TOTAL REWARDS PACKAGE UPGRADES to feel “stuck” and limited in their growth opportunities. Historically, the primary components of a standard total In addition, employees may decide to change their interests rewards package have consisted of cash compensation (sal- within a career track. The absence of options for these types ary), health insurance, paid time off, and a retirement plan. of workers leads to low levels of engagement and, as a result, However, as the workforce has modernized, human resource (HR) leaders have recognized that today’s employees value a desire to leave the company for another organization with benefits differently. Companies are spending more time more opportunities. understanding their ideal candidate and developing benefit COMPENSATION packages that are more closely targeted toward a specific tal- There are many factors involved in determining compensa- ent segment. As a result of these changes, the array of benefit choices are expanded for new employees. tion, which can be a challenge for businesses, especially those located in multiple geographic markets. While HR depart- In the age of customization, employees can often pick and ments are aware of this, employees likely don’t see all of the choose the benefits they need most for their own situations. decisions made behind the scenes and just want to be com- In addition to the basics, employers are offering benefits like pensated fairly, equitably, and on par with competing busi- profit-sharing, flextime policies, professional development nesses. In addition, more companies are offering innovative reimbursements, financial planning services, and student compensation methods such as bonus programs and health loan repayment programs. incentives. CFMA Building Profits March/April 2020 Employee Retention To start developing employee engagement strategies, it’s important to understand how your people are feeling and what makes them excited to come to work. If companies do not embrace these growing trends or change talent and investing in their people. Investing in employees their compensation packages, then their employees may be can result in higher performance and an increased return on more likely to become dissatisfied and seek opportunities investment (ROI). elsewhere. So, what can you do to improve your retention rate? Here are PEOPLE MANAGEMENT five considerations. People want to feel valued and appreciated by their manager, CONSIDERATION 1: CREATE FUTURE CAREER regardless of the role or industry. Since each person has their OPPORTUNITIES own preference for how he or she wants to be managed, man- aging people can be one of the hardest parts of leadership. When employees have defined paths to advancement and Those who are under the influence of good management are opportunities to grow into more challenging roles, then their more likely to perform better and remain engaged. However, engagement and performance increases. micromanagement, high criticism, and unrealistic deadlines However, in the construction industry – especially when are common practices that can cause stress and dissatisfac- it comes to roles in the field such as carpenters, installers, tion in the workplace. electricians, and roofers – it may not always be easy to cre- DEVELOPMENT OPPORTUNITIES ate future career paths. In addition, certain employees may not have a desire to move up or change roles. Even in these People who enjoy their work generally have a desire to cases, if an employer is visibly working to create options for improve, become more efficient, and move into higher-level its people, then employees will recognize and appreciate the roles. Employees want the opportunity to improve their skills effort, which can lead to increased morale. and the resources to help them do so. Furthermore, it has been widely proven that participants in development programs who So how can an organization create future career opportu- feel as though the content was customized for their particular nities even in situations where there might not be a clear needs tend to experience higher levels of growth and develop- advancement path? One strategy might be to separate a ment. And, those who are exposed to development opportuni- job family into multiple levels of experience and create an ties experience higher levels of engagement, which ultimately advancement ladder, which would give more experienced leads to better business results. workers a chance to coach entry-level professionals.
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