Why is Staff Retention Important?

In many cases, finding skilled workers can be difficult, that’s why staff retention is so important within the construction industry. Not only is staff retention vital for your company’s success, but it also helps save your business time and money.

Construction requires hard-working and skilful individuals who can take on demanding projects. With poor staff retention, your company will face more recruitment costs while losing skilled workers.

The built environment sector can only thrive with talented employees who ensure projects run smoothly. It’s important to keep skilled workers in construction jobs and retention high. Read on to learn more about staff retention and why it’s important.

What is Staff Retention?

Staff retention is a company’s ability to keep their employees. Essentially, it’s a company’s dedicated effort to ensure their employees are both safe and happy, limiting their chances of leaving their jobs.

It’s important for any company, whether it’s in construction or not, to make improvements to ensure high retention. High retention rates prove that your company provides a good working environment and offers opportunities for employees to grow in their careers.

The Construction Industry Training Board (CITB) revealed:

• The construction industry recruits roughly 200,000 people each year
• An average of 38,000 vacancies for job roles in construction were advertised per month in 2023
• A third (31%) of construction employers struggle to find suitably skilled staff
• The construction industry has seen a loss of 210,000 workers, which is more than what the industry has taken on

What Causes High Staff Turnover?

Typically, high staff turnover is caused by factors such as salary issues and minimal growth opportunities. To prevent high staff turnover, companies should look at prioritising their employees.

Unfortunately, many UK construction companies struggle to prioritise employee well-being and effectively communicate with their staff. This often leads to high staff turnover rates. Some common culprits that cause high staff turnover include:

• Poor salary
• Long commutes
• Bad management
• Lack of work-life balance
• Lack of training
• No opportunities for development
• No room for flexibility
• Poor mental health

This isn’t just an issue in the UK. For example, in Hong Kong, 66% of RICS Global Construction Monitor respondents in Hong Kong report staff shortages as a major issue. Several factors contribute to this, such as a competitive labour market and an ageing workforce.

That being said, certain roles within the UK construction industry are in demand more than others, including:

• Quantity Surveyors
• Site Managers
• Engineers

In fact, 25% of all UK job postings are seeking skilful engineers. This high demand for skilled workers has led to intense competition for talent, with rival companies often luring employees away with better pay and benefits. This can be detrimental, directly increasing employee turnover rates.

Moreover, we’ve seen a rise in salaries for construction workers with The Office for National Statistics (ONS) announced that the wage for construction workers had increased by 3.8% by May 2024.

Other issues are caused by mental health due to personal issues or a negative work-life balance. Research shows that male construction workers are three times more likely to commit suicide in comparison to other men. This only reinforces how important it is to prioritise staff and their needs.

Having more training and development opportunities to allow staff to grow within your company is also important. Instead of hiring new employees, construction companies should consider who they already have. Internal recruitment offers a great way to upskill existing staff – it also protects your company and boosts productivity.

How to Calculate Your Employee Retention Rate

Retaining skilful employees can be difficult if your company isn’t providing what they need. This is why it’s more important than ever to ensure your top performers don’t leave. Your current employee retention rate offers insight into your ability to keep your workers. To calculate your employee retention rate, you’ll need to:

• Divide the number of employees you currently have on the last day of the given period by how many employees you had on the first day
• Then, you’ll need to multiply that number by 100 – which turns it into a percentage

The retention rate is usually calculated on an annual basis, but some companies prefer to check their retention rate over shorter periods. A key figure in the staff retention calculation process is how many employees you had in your defined employment period.

For example, if there were 100 employees on January 1st 2023, your company’s number of employees in that specific period would be 100. The goal is to track staff retention, so you shouldn’t count any new staff members who have been hired at this time.

It’s insightful to compare your staff retention rate to other companies in your industry. Retention rates vary from industry to industry, which is why it’s important to focus on construction (or whichever sector you’re in).

The Importance of Staff Retention

Retaining employees is vital, and should be a business priority – regardless of whether your company’s current employee turnover rate is low.

It’s no secret that employees are more likely to commit to companies when they feel appreciated. Several benefits come with retaining employees, from increased employee engagement to avoiding recruitment costs.

Higher Employee Engagement

In the construction industry, employees who prioritise communication and engagement are more likely to focus on safety, maintain quality standards, and work towards meeting project deadlines.

When employees know they’re appreciated, they’ll show genuine support for their company by engaging efficiently and communicating both their needs and concerns.

Stronger Company Culture

A strong company culture is key for many businesses, including those in construction. Company culture can impact your staff retention, proving to be a key factor when employees are deciding to leave or stay.

Cultural initiatives can help maintain your high retention rates. In construction, several aspects of everyday work life can be improved with:

• Great communication
• Healthy work relationships
• Expert leadership
• Teamwork

Decreased Hiring and Recruiting Costs

Having to continuously seek new employees can be both time-consuming and expensive. Costs to replace an employee range between 16% to 213% of their salary. For employees in executive positions, expect to pay a larger amount to replace them. This hones in on the importance of staff retention – not only to save money but also valuable time.

Reduced Training Time

The construction industry in the UK faces labour shortages frequently, making recruitment challenging and expensive. When you’re having to take on new staff members due to poor retention, you’ll likely need to focus on training – which comes at a cost.

A vital part of employing new staff members is the onboarding process. Research shows that the onboarding process varies, but it typically takes anywhere between a few months and a year.

Retained Institutional Knowledge

When skilful and experienced employees leave, they take their knowledge with them. In the construction industry, it’s vital to employ knowledgeable workers. The sector can be tough to work in, with lots of information to be aware of.

Understanding local building codes and regulations, being able to create positive working relationships with suppliers, and having experience in specific projects are advantageous.

When someone works somewhere for a long period, knowing this type of information becomes second nature. This is why it’s important not to lose these types of workers.

Increased Revenue

If you fail to retain staff, your company’s profitability will drop. With good staff retention, you’ll have an experienced team of workers who can improve project efficiency and remain dedicated to both the company they work for and the projects they’re working on. With good retention also comes higher quality work, resulting in:

• More referrals
• Repeat business
• Trustworthy reviews

Once new staff members become long-term employees, they’ll likely make fewer mistakes (due to increased knowledge) and be able to take on more complex and high-value construction projects.

Competitive Advantage

Companies with a much higher retention rate are better positioned to attract new and diverse talent.

When an employer has an exceptional reputation for making a workplace a positive and safe environment, they’ll appear more appealing to potential hires.

With a high retention rate, you can confidently stand out from a crowd of industry competitors. There are many benefits of staff retention in construction – it proves your company’s excellence and ability to keep staff long-term and shows your company’s dedication to staff members.

Find and Retain Top Construction Talent with Strategic Resourcing

At Strategic Resourcing, we offer an innovative and streamlined digital platform that allows you to find trusted talent within the construction, professional services and infrastructure industries.

Our platform is straightforward to navigate, making it easier than ever to find your dream candidatess. We’re here to simplify recruitment, making finding the right candidates an enjoyable and hassle-free process.

We understand how important it is to find the most suitable employees for your company – this is why we provide our platform to connect you directly with top talent in your area. Our platform provides a role description builder, which means you can voice your requirements easily and connect with suitable candidates.

Not only does our software save you time and effort, but it increases your chance of finding employees who match your job description perfectly.

Our recruiters are specialists in the built environment sector with relevant experience and knowledge to assist you in finding new employees. Once we help you hire the best candidates, you won’t want to lose them!

For more information, get in touch with us today.