A construction company’s workforce is one of its most valuable tools. The success of any project is a direct reflection of the skill of the workers who completed it and the managers who supervised it. In building and maintaining a strong workforce, businesses in the construction industry face several unique challenges, including a lack of qualified candidates to fill open positions, high employee turnover, perpetual safety concerns, and the burden of complying with employment and immigration laws.
Here are five of the most common HR issues for construction companies—and solutions for overcoming them:
1. Recruiting qualified workers
Given the low national unemployment rate that has persisted throughout 2016, employers across all industries are facing stiff competition for top talent. In the construction industry, however, certain factors compound this problem. For instance, many workers are deterred by the perception of construction jobs as low-paying and excessively strenuous and dangerous. Furthermore, each project carries different requirements, and companies often struggle to find workers who have the skills, experience, and certifications needed from project to project.
How can employers in the construction industry attract qualified workers who will ensure success on each job? Of course, it is important to offer competitive pay and benefits, but businesses should also ensure that they are leveraging the most effective mediums for reaching their desired candidates. For example, using social media to post job descriptions that clearly explain the requirements of the position is an excellent way to connect with the younger workers that construction companies often need. Businesses should also invest in employer branding, which is the process of cultivating a positive reputation as an employer. Businesses with strong employer brands save time and money on recruitment because candidates are more likely to seek them out. Offering plenty of training opportunities for workers will help boost employer branding efforts—and will also enable workers to easily attain any certifications they need for specific projects.
2. Ensuring safety and controlling workers’ compensation costs
Construction is an inherently risky activity, and workplace accidents may result in staggering costs for employers. These direct and indirect costs include medical expenses, escalating workers’ comp insurance premiums, lost productivity as the injured worker heals, costs incurred in recruiting and training substitute workers, and the possibility of lawsuits stemming from the incident. Therefore, safety must be a paramount consideration at any worksite. All construction companies must have comprehensive safety plans in place, including regular training for all workers and clear protocols to follow in the event of injuries. Construction managers must ensure that safety information is understood by all workers, including non-native English speakers. By invoking the help of safety and risk management professionals, businesses can reap significant savings on workers’ compensation insurance and avoid the many undesirable effects of workplace accidents.
3. Coping with changing labor laws
Employers in any industry face onerous laws governing the treatment of workers. In addition to the safety regulations promulgated by OSHA, many construction companies are subject to the Affordable Care Act (ACA)—which was greatly expanded in 2016—and other labor laws. Complying with these laws imposes high costs on employers, but failing to comply will result in staggering penalties and the risk of lawsuits and other sanctions.
As of January 2016, the ACA applies to companies with 50 or more full-time employees. These organizations—known as applicable large employers (ALEs)—must provide affordable, minimum essential health insurance coverage to all employees who work, on average, 30 hours per week. Since construction companies often experience high rates of employee turnover and tend to have large numbers of uninsured workers, they must carefully understand the unique ways that the ACA applies to them.
Construction companies should also be prepared for an expansion of overtime pay protections under the Fair Labor Standards Act (FLSA). A new rule that would have drastically raised the salary threshold for exempting workers from overtime pay was scheduled to go into effect on December 1, 2016. Currently, workers who earn up to $23,660 annually are entitled to time-and-a-half pay when they work over 40 hours in a week, but the proposed rule would have raised this threshold to $47,476—thus extending overtime protections to an additional 4.2 million workers. However, with a mere ten days remaining before the implementation deadline, a federal judge in Texas issued a nationwide injunction temporarily blocking the rule from taking effect. At the time of this writing, it is unclear whether the rule will ultimately be upheld, but employers should expect an expansion of overtime pay in the near future since the current regulations have not been updated since 2004.
4. Temporary workers and high employee turnover
While many construction workers are hired on a temporary basis for specific projects, the high turnover rate that is common in the industry is also attributable to other factors. For example, some workers may drift from company to company due to poor wages or worksite conditions. Considering that employees are more likely to be injured within the first few weeks on a job, construction companies have a strong financial incentive to improve retention. One of the most effective steps that companies can take to keep employees engaged is to equip them with the tools they need to succeed. For example, employers should offer opportunities for training and development, establish channels of communication through which employees can voice concerns, and if applicable, have bilingual workers on hand to translate important information for those who do not speak English. By empowering workers to achieve their full potential, companies will reduce turnover, improve safety, and boost productivity.
5. Immigration compliance
Construction companies commonly employ workers from other countries. In addition to coping with language and cultural barriers, companies must ensure that they are complying with all applicable immigration laws. They must properly file a Form I-9, Employment Eligibility Verification, for each new individual hired and maintain employee files in the event of an audit. Immigration law is confusing and subject to change, so businesses should consider seeking professional assistance to navigate the hiring and compliance process.
By working with a provider of HR outsourcing services like CBR, construction companies can reduce costs and yield better results on common issues like safety, compliance, and employee recruitment and retention. Contact CBR today!
(Sources: https://work.chron.com/hr-policies-construction-1160.html, https://www.ce.udel.edu/courses/CIEG%20486/Challenges%20Facing%20Today’s%20CM.pdf).