High employee turnover in construction and field service – are your workers deserting a sinking ship or are there other underlying problems?
Some projects have a large turnover of employees with people continually leaving and new employees taking their place. Unfortunately, some managers have an attitude that it’s ‘good riddance’ and if someone wants to leave they should – and the sooner the better. However, this churn of people can be disruptive and expensive for the project.
The costs of high employee turnover:
A high employee turnover rate:
- It causes the project to lose a skill which has to be replaced, which could take some time. Without skill, certain tasks may not be able to be done. Others might have to fill in for the missing person.
- It can cause a problem when there’s a shortage of skills to replace the person leaving, and the person may not be able to be replaced.
- The absence of a vital skill such as a crane operator may mean that others can’t do their tasks until there’s a replacement operator.
- This means each time a new employee arrives on site they have to learn the project rules and processes, which may take time before they become effective, resulting in lost productivity.
- Increases recruitment costs. Often there are advertising costs, recruitment fees and management time required to interview potential recruits.
- Creates additional employment expenses, such as; medicals, inductions and personal protective clothing.
- Sometimes requires the replacement comes at a higher salary.
- Often sees the best employees leave first.
- Results in other employees having to shoulder more responsibility and do more work in the absence of the person that’s gone.
- It can impact morale since those left behind find the continuous churn disruptive and disconcerting and they start to consider if they should also be leaving.
- When those in management leave there’s often a knowledge gap and the new person has to understand the project, the team, the client and what’s been done and what they have to pick up. Often vital information can be lost especially pertaining to variation claims. Sometimes tasks fall between a gap and are left undone until they eventually become a problem and a delay.
- Often employees considering leaving the project are less productive than they should be. They are disinterested in the task at hand and consumed with making arrangements for their next job. They may be actively engaging other workers and spreading their discontent with the project. Employees working their notice time can be particularly disruptive with no interest in the project at all.
- When we employ someone new there is always the risk they’ll be unsuitable – no matter how carefully we check their credentials. Sometimes it is the case of ‘better the devil you know, than the one you don’t’. It sometimes takes time to uncover the new person’s strengths, weaknesses, and foibles.
What causes high employee turnover?
If the project has an excessively high rate of employee turnover it’s important to ascertain the possible reasons for this. There are many reasons why people resign, and sometimes the problem is simple and easy to remedy for example:
- It may be due to a particular staff member being abusive.
- Sometimes employees resign because there are more attractive working opportunities elsewhere, and you may not be able to do much, but it could be worthwhile to investigate what changes can be made to make the project conditions more attractive.
- Sometimes employees are ‘poached’ by other companies working on the project, in which case the Project Manager should raise the issue with the client, or managing contractor, so they can put a stop to this because it’s detrimental to the overall project progress and costs the affected contractor money.
- The employees may not receive the correct pay or benefits, or they might be regularly paid late.
- Frequently a high rate of employee turnover is a symptom of a bigger problem on the project which could include:
- A disorganized project where employees aren’t given direction or are continually moved between tasks.
- A lack of resources – either there is a lack of people and equipment or the equipment isn’t suitable or continuously breaks down.
- Work is continually being delayed because of a shortage of materials. Usually, a busy worker is a happy worker.
- The project is working long hours and on weekends.
- Poor quality work is resulting in lots of rework.
- Poor communication.
- Inconsistent project rules and discipline.
- A client that is meddlesome and continually giving instructions to the contractor’s workers.
- A project that is in financial and scheduling difficulties.
The appropriate way to ascertain the reason for a person leaving is to hold an exit interview with them. When the Project Manager talks to an employee who has resigned, they may find the employee hasn’t thought through the reason for leaving as fully as they should have. The employee may, in fact, be leaving for what they only perceive to be a better deal, but when their current conditions of employment are compared with their new ones, they may find they will be worse off and choose to withdraw their resignation.
Convincing an employee to stay may benefit the project. Of course, it is also important that employees aren’t persuaded to stay just because their pay will increase. It never works to keep an employee at ‘any’ cost. Some employees are mercenaries and will go to the highest bidder. Some workers aren’t worth keeping. Sometimes people have to move on.
Construction workers are highly mobile regularly moving from project to project. It’s important to keep workers on a project happy so they don’t leave in the middle of the project since this is very disruptive and costly. There will always be some that will leave mid-project but management should be proactive to ensure most of the employees stay until the project is completed.
Have you had projects with high employee turnover? What were the reasons?