Turnover Is A Death Sentence To Contractors

Do you like things kept simple? Let me point out something very simply.

High Turnover = Bankruptcy

Do you know the biggest difference between construction and most all other industries?

Construction work still requires craftsmanship. In construction, skilled workers are still essential to survival.

Even service companies aren’t as dependent on their individual employees as are contractors. Carpentry, concrete finishing, electrical wiring, painting, an so forth cannot be automated. No matter what your construction trade, your quality and costs are controlled by your workers’ skills and efforts.

The truth is that no matter how great a salesman you are, poorly motivated and constantly changing crews will do you in. You can’t hide a series of missed deadlines, installation mistakes, or inferior workmanship. The word will spread throughout your market among owners, builders, and developers. Your company will end up with a scarlet "A" hanging around its neck, with the "A" standing for the word AVOID like the plague.

High turnover creates a laundry list of problems that become a death sentence to construction contractors.

1. Low productivity.
2. Poor quality.
3. Missed deadlines.
4. Low morale - poor work effort.
5. Poor customer service.
6. Excessive absenteeism.
7. Management time wasted recruiting and interviewing new workers.
8. Time wasted training new employees.

The turnover I am talking about, the turnover that will kill your company, is the turnover created when good employees walk out our door. Just to be clear, I am not talking about the type of turnover created when you jettison a bad worker. That’s pruning and it should be done. But, good workers leaving is a story that often has a very ugly ending.

Quitting is just the last step employees take in the process of disengagement. Long before they quit, employees become disengaged, disloyal, de-motivated, and often downright disruptive. Such employees are affectionately knows as ROAD Warriors - Retired On Active Duty.

Yes, they are drawing a paycheck but they aren’t earning it. Hence, missed deadlines, blown budgets, and poor quality.

Solving the turnover problem often solves the low productivity problem. The two go hand-in-hand. That's a deal that's hard to pass up. Imagine having crews that are more productive yet work for lower wage rates than your competitors.

Think about how hard it is to find good workers, union or non-union. You can’t afford to lose the goods ones you've got. You need to eliminate any turnover you are currently suffering. To do that, become an employer-of-choice!

An employer-of-choice is a company that employees are eager to work for. An employer-of-choice gets his pick of the litter when hiring workers. Employers-of-choice often have a waiting list of high quality candidates eager to work for them.

What makes a company an employer-of-choice?

1. You keep the crews busy with good work.
2. You set employees up for individual and group success.
3. You create a team atmosphere.
4. You respect and value your employees.
5. You have realistic performance expectations.
6. You hold non-performers accountable.
7. You pay fairly.

Here’s interesting fact: employers-of-choice don’t have to pay market wages. Numerous studies have shown that employees will join and stay with companies viewed as employee-friendly even when they could get more money working for another company. Rarely do good employees walk away from employers-of-choice.

Naturally, contractors who completely eliminate turnover gain a tremendous competitive advantage. I know of a couple of contractors in my home town who have over 100 field employees each and lose less than one employee a year to voluntary turnover. Would it surprise you to learn that both of these companies have incredibly productivity crews and tremendous cost advantages?

If you are a non-union shop, you may not be able to be to find enough proven workers to replace good ones you use. If you are a small contractor, you certainly don’t have time to be recruiting new workers and training them. You probably can’t afford to hire proven ones. You need to be chasing down work and making sure the work you do have is going in right.

Just remember, turnover is a deadly problem. Trying to live with the problem instead of investigating and solving the problem is a dangerous gamble. It can be a very expensive mistake to make. Try not to.

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