Your best carpenter just gave two weeks' notice. Again.
For the third time this year, you're scrambling to find a replacement, juggling project schedules, and hoping the rest of your crew doesn't follow him out the door. You know this is costing your company money. But do you know how much?
Construction companies face a brutal reality: workers leave at twice the rate of other industries. The average construction turnover rate sits between 20% and 30% annually, while some companies report rates as high as 57%. Compare that to the national average of 12-15% across all industries, and you start to see the problem.
Here's what that means in real terms. A mid-sized construction company with 100 employees making $50,000 per year could spend $660,000 to $2.6 million replacing workers who quit. That's money that should be going toward growth, better equipment, or higher wages for the workers you want to keep.
The problem isn't just the obvious costs. When experienced workers leave, they take knowledge with them. They know which suppliers deliver on time. They understand your company's standards. They've built relationships with clients. All of that walks out the door with them.
This guide breaks down the real costs of construction turnover, the ones you see and the ones you don't. More importantly, we'll show you what's actually working to keep good workers around. Not theory. Real strategies that construction companies are using right now to cut turnover and build stable teams.
Construction wasn't always this way. Twenty years ago, workers stayed with companies for decades. Today, that's rare. Understanding why helps you fix it.
Construction turnover rates have stayed consistently high over the past several years. In 2020, the rate hit 68.5%— likely due to COVID-19. It dropped to 56.9% in 2021, but that's still way higher than the 47.2% average across all industries that year.
Some construction companies have it even worse. One large Texas construction firm reported annual turnover of over 400%. A crane operator worked for eight different companies in just one year. That's not sustainable for anyone.
The hardest hit? Young workers. Construction employees aged 24 or younger show turnover rates around 64%. These are the workers who should be learning your systems and building careers. Instead, they're leaving before they get started.
You can't compare construction turnover to an office job. The work itself creates unique challenges that other industries don't face.
Project-Based Work Creates Instability
Construction jobs often end when projects finish. Some companies reduce their workforce by 50% or more between projects. Workers know this. They're always looking for the next opportunity because they can't count on steady work.
Even skilled workers with proven track records face uncertainty. When a commercial project wraps up, there might not be another one starting right away. Workers can't wait around without pay.
Seasonal Slowdowns Force Hard Choices
In cold climates, outdoor construction slows or stops completely in winter. Landscaping companies shut down. Concrete work becomes impossible. Roofing jobs wait for better weather.
Workers facing months without income don't stick around. They find industries with year-round work, even if it pays less. You can't blame them.
Physical Demands Take Their Toll
Construction is hard on your body. Long days. Heavy lifting. Uncomfortable positions. Extreme weather. Not everyone can handle it long-term.
Younger workers might see construction as temporary. Something to do until they find easier work. Older workers' bodies eventually say enough. Either way, you lose experienced people.
Pay Drives Movement
Here's a surprising fact: Nearly 50% of construction workers would switch jobs for a pay increase of just $1-4 per hour. Half would leave for a one-time bonus of $250.
When workers see money as the only reward, loyalty disappears. They become free agents, always watching for better offers. Your competitors know this and actively recruit your best people.
Turnover doesn't happen in isolation. When one person leaves, others start thinking about it too.
The Domino Effect
Your crew works closely together. They talk. When someone quits for better pay or conditions, everyone else wonders if they should do the same. One departure can trigger several more.
Good workers leaving sends a message to those who stay: "Maybe I'm the fool for sticking around." That's dangerous thinking for your company.
Knowledge Gaps Slow Everything Down
Experienced workers know your shortcuts. They remember lessons from past projects. They've seen what works and what doesn't.
When they leave, new workers have to learn everything from scratch. They make mistakes veterans would avoid. Projects take longer. Quality suffers. Customers notice.
Team Cohesion Falls Apart
Construction crews build rhythm over time. They anticipate each other's moves. Communication becomes almost automatic. That efficiency disappears when workers constantly change.
New workers need time to fit in. They don't know the crew's unofficial rules or communication style. The whole team slows down while everyone adjusts.
Most construction companies only track obvious costs like recruiting and training. But turnover's impact goes much deeper.
These are the expenses that show up in your budget. They're easier to track, but companies often underestimate them.
Recruiting and Hiring Expenses
Finding workers costs money even before you hire anyone. According to the Center for American Progress, replacing a low-wage hourly worker costs about 16% of their annual pay.
Here's what that looks like in real dollars. If you're replacing a laborer making $20 per hour ($41,600 annually), you'll spend about $6,656 just to fill that position. For a skilled tradesperson making $30 per hour ($62,400 annually), that's $9,984.
These costs include:
Many construction companies hire recruiters or HR staff specifically to handle constant turnover. For a small to mid-sized subcontractor, that can mean a $50,000 annual expense just to keep positions filled.
Onboarding and Training Costs
Getting new workers up to speed takes time and money. They need:
One construction HR manager reported total HR costs for short-term employees reaching $10,000, or about 20% of a worker's annual wages. That's for workers who don't even stay a full year.
New workers aren't productive on day one. They need supervision. They make mistakes. They work slower than experienced hands. You're paying full wages for partial productivity.
Administrative and Paperwork Costs
Every worker who leaves creates administrative work:
This administrative burden falls on your office staff, pulling them away from other work. Multiple departures can overwhelm small HR departments.
These costs don't show up as line items in your budget. That makes them easy to ignore. But they're just as real and often bigger than direct costs.
Lost Productivity and Delays
When experienced workers leave, productivity drops immediately. The replacement worker needs time to reach full speed. Meanwhile, projects slow down.
Your remaining crew picks up slack. They train the new person while trying to maintain their own pace. Everyone's productivity suffers.
Project timelines stretch. You might miss deadlines or rush to catch up. Either way, it costs money. Delays can trigger penalty clauses in contracts. Rushing increases mistakes and safety risks.
Quality Issues and Rework
New workers don't know your quality standards yet. They haven't learned your company's way of doing things. Mistakes happen.
Rework is expensive. You pay for labor and materials twice. The project timeline extends. Your reputation takes a hit.
Experienced workers catch problems before they become serious. New workers don't have that instinct yet. Small issues become big problems.
Safety Incidents and Insurance Costs
Research shows that workers with less than one year of experience account for over half of workers' compensation claims. New workers don't recognize hazards that veterans spot automatically.
Safety incidents cost you in multiple ways:
Your insurance company tracks your claims history. High turnover leading to more incidents means higher premiums for years.
Client Relationships Suffer
Clients like seeing familiar faces on their projects. They build relationships with your crew. When workers constantly change, clients wonder about your company's stability.
Some clients specifically request certain workers. When those workers leave, you lose that advantage. Clients might take their future business elsewhere.
These are the hardest costs to measure but potentially the most damaging to your company's future.
Company Knowledge Walks Out the Door
Veteran workers know things that aren't written down:
This institutional knowledge builds over years. It makes your company more efficient and professional. When workers leave, you lose it instantly.
Team Morale Takes a Hit
Watching coworkers leave affects the workers who stay. They start asking questions:
The workers who remain feel overworked. They're covering for open positions and training replacements. Resentment builds. More people think about quitting. The cycle continues.
Your Reputation in the Industry Suffers
Construction is a small world in most markets. Word spreads fast when companies treat workers poorly or can't keep anyone around.
High turnover becomes your reputation. Good workers avoid you. The workers you can attract are often the ones nobody else wants. Your talent pool shrinks.
Suppliers and clients notice too. They see different faces on every visit. They wonder if you can deliver consistent quality. Some decide not to risk it.
Future Leadership Pipeline Dries Up
Who will run your company in 10 years? Ideally, workers you're developing now. But high turnover makes that impossible.
Leadership development takes time. You need people who understand your business deeply, who've worked through challenges, who embody your company culture. When workers don't stick around, you can't build that pipeline.
Eventually, you face a crisis. Key people retire with no one ready to replace them. You're forced to hire leaders from outside who don't know your business. Or worse, you can't find qualified leaders at all.
Most construction companies drastically underestimate what turnover costs them. Here's how to calculate your real expense.
The Basic Formula
Let's work through an example. Say you have:
With 25% turnover (below the construction average), you're replacing:
Total annual turnover cost: $97,200
That's for below-average turnover. If your turnover matches the industry average of 30-57%, multiply those costs significantly.
The Full Cost Picture
But wait. That's just direct costs. Add indirect costs:
Realistic total annual cost: $177,200 or more
For a company with 40 employees, that's over $4,400 per worker annually just from turnover. Imagine what you could do with that money instead.
Understanding why workers quit helps you keep them around. The reasons aren't mysterious. Workers tell you directly if you ask.
Money matters. Let's not pretend it doesn't.
Base Pay Falls Behind
In 2021, construction wages only increased 6% while the consumer price index rose 6.8%. Workers effectively took pay cuts despite getting raises.
When your wages don't keep pace with living costs, workers notice. They start looking at what other companies pay. If they can make more elsewhere—even slightly more—many will leave.
Benefits Don't Match the Competition
Base pay isn't everything. Workers compare:
Some construction companies offer minimal benefits to keep costs down. Workers notice. They leave for companies that offer better packages, even if base pay is similar.
Bonus and Incentive Programs Are Missing
When workers do the same job at the same pay regardless of performance, why would they go above and beyond? High performers feel undervalued. They leave for companies that reward excellence.
Many construction companies lack any recognition programs. Workers who complete projects early, maintain perfect safety records, or go the extra mile get nothing extra. That's a problem.
Workers want to advance. When they can't see a path forward, they look elsewhere.
No Clear Advancement Path
Many construction companies have flat structures. You're either a worker or management. There's nothing in between.
Workers ask themselves: "What's next for me here?" If the answer is "nothing for 10 years," they start looking. Why wait when other companies offer opportunities now?
Training and Development Don't Exist
According to industry surveys, 46% of construction firms report launching or expanding in-house training programs to address talent shortages. But that means 54% still aren't investing in worker development.
Workers want to build skills. They want certifications. They want to be worth more in the marketplace. Companies that don't help them develop push them toward competitors who will.
Favorites Get Promoted Over Qualifications
Nothing kills morale faster than watching less qualified workers get promoted because they're buddies with the boss. It happens in construction a lot.
When merit doesn't matter, good workers leave. Why work hard when advancement depends on relationships rather than performance?
Construction is tough work. But some companies make it unnecessarily difficult.
Safety Culture Is Weak
Construction accounts for 20% of workplace deaths despite being only 5% of the workforce. Workers know the risks. They want companies that take safety seriously.
When companies cut corners on safety to save money or time, workers notice. They don't want to risk their lives for companies that don't protect them. They leave.
Younger workers especially care about safety. They've grown up with better safety awareness. Companies with poor safety cultures struggle to attract and keep young talent.
Schedules Are Unpredictable
Construction work varies. Weather delays happen. Projects get rescheduled. Workers understand that. But some companies take unpredictability to extremes.
Last-minute schedule changes. Mandatory overtime with no notice. Weekend work announced on Friday. Workers can't plan their lives. They can't commit to family activities or maintain relationships outside work.
Eventually, they find companies with better work-life balance. Even if it means less money, some workers choose predictability.
Equipment and Tools Are Inadequate
Workers want to do good work. That requires proper equipment and tools. When companies won't invest in the right equipment, workers get frustrated.
They waste time working around broken or inadequate tools. They can't do quality work with poor equipment. They see other companies with better gear and wonder why their employer won't invest.
Job Sites Are Poorly Managed
Disorganization creates frustration. Workers show up to sites without proper materials. Plans change mid-project without communication. Nobody knows who's in charge of what.
Good workers hate chaos. They want clear direction and proper planning. When they constantly deal with disorganization, they look for better-managed companies.
Culture matters more than most construction companies realize. Workers spend more time with coworkers than with family. They want that time to be positive.
Management Doesn't Listen
Workers have good ideas. They see problems management doesn't. They know what would make projects run smoother.
When management ignores worker input or dismisses concerns, workers stop caring. They do the minimum. Eventually, they leave for companies that value their experience and ideas.
Recognition Never Happens
Completing a difficult project on time and under budget is a big accomplishment. Workers want acknowledgment. A simple "thank you" or "great job" goes far.
Many construction companies never celebrate wins. Projects finish, and everyone immediately moves to the next one. Workers feel like interchangeable parts rather than valued team members.
Communication Is Terrible
Workers learn about company changes through rumors. They find out about schedule changes at the last minute. Important information doesn't reach field crews.
Poor communication creates stress and confusion. It makes workers feel disrespected. They leave for companies that keep them informed.
Toxic Behaviors Go Unchecked
Every industry has difficult personalities. But construction seems to tolerate more than most. Yelling. Disrespect. Bullying. Harassment.
When companies don't address toxic behavior—especially from high performers or long-term employees—good workers leave. They won't stick around in hostile environments.
Not every departure is your company's fault. Sometimes life happens.
Relocation and Life Changes
Workers move for family reasons. They change careers. They go back to school. Their spouse gets transferred. Health issues arise.
These departures are hard to prevent. The best you can do is maintain good relationships so workers come back if circumstances change again.
Retirement and Aging
Construction is young man's work, according to conventional wisdom. As workers age, they face hard choices about continuing in physically demanding roles.
Some transition to supervision or lighter duty. Others leave for less physically demanding industries. Companies that don't create paths for aging workers lose decades of experience.
Better Opportunities Elsewhere
Sometimes workers leave because they get genuinely better opportunities. A chance to learn new skills. Work on bigger projects. Move into areas they're interested in.
These departures sting less because you know the worker is advancing their career. But they still create costs and challenges for your company.
Talk is cheap. These strategies have actual track records of reducing construction turnover. Pick the ones that fit your company and implement them seriously.
You don't need to pay the absolute highest wages in your market. But you can't be significantly below average either.
Conduct Regular Market Research
Know what competitors pay. Not what you think they pay—what they actually pay. Check industry reports. Talk to workers during interviews. Ask your suppliers what they're seeing.
Review wages at least annually. Adjust when you're falling behind. Don't wait for workers to threaten to quit before addressing pay issues.
Create Clear Pay Scales
Workers want to know what they need to do to earn more. Create transparent pay scales tied to skills, certifications, and performance.
Show workers the path from entry-level to senior positions. Let them see what increased pay requires. Then help them get there.
Offer Performance Bonuses
29% of construction firms now provide incentives and bonuses to attract skilled workers. If you're not one of them, you're at a disadvantage.
Tie bonuses to things workers can control:
Make sure bonuses are meaningful. $100 bonuses don't motivate anyone. They actually insult workers.
Improve Benefits Packages
Your benefits package competes just like wages. Workers compare:
Health Insurance: Many construction workers have families. They need good coverage at reasonable costs. High-deductible plans with huge employee contributions drive workers away.
Retirement Matching: Even young workers care about retirement now. Match their 401(k) contributions. Show them you're invested in their long-term success.
Paid Time Off: Construction workers take pride in not missing work. But everyone needs time off. Generous PTO policies show you respect their need for rest and family time.
Flexible Benefits: Not everyone needs the same things. Some workers want more time off. Others want bigger retirement contributions. Flexible benefit plans let workers choose what matters to them.
Workers stay longer when they see a future with your company. Show them what that future looks like.
Map Out Advancement Opportunities
Create formal job levels with clear requirements:
Document what each level requires. Skills. Certifications. Experience. Make it objective, not subjective.
Invest in Training and Development
Half of construction firms report launching or expanding in-house training programs to develop talent. Join them.
Provide:
Budget for training. Don't just talk about it—actually spend money on it. Workers notice when you invest in their growth.
Create Apprenticeship Programs
Apprenticeships solve multiple problems. They:
Partner with trade schools and community colleges. Offer structured programs with increasing responsibility and pay as apprentices progress.
Promote From Within
When supervisor or management positions open, look internally first. Show workers that advancement is possible.
Sometimes the best candidate is external. That's fine. But if you always hire from outside, workers get the message: "There's no future here."
You can't make construction easy. But you can make it better.
Build a Strong Safety Culture
Companies investing in workplace safety save $4-6 for every $1 spent. But that's not why you should do it.
Do it because workers deserve to go home safe. They'll notice and appreciate it.
When workers see you prioritize their safety, they stick around.
Invest in Quality Equipment
Nothing frustrates workers more than struggling with poor equipment. They feel like you don't value their work or time.
Buy quality tools and equipment. Maintain them properly. Replace them when needed. Yes, it costs money. But so does turnover.
Workers with good equipment:
Improve Project Planning
Chaos on job sites comes from poor planning. Workers spend time waiting for materials, dealing with unclear instructions, or redoing work because plans changed.
Improve your planning processes:
Well-run projects make everyone's job easier. Workers appreciate working for organized companies.
Offer Schedule Flexibility When Possible
Construction has schedule constraints. Projects have deadlines. Weather creates complications. But some flexibility is often possible.
Consider:
You can't always be flexible. But trying when possible shows workers you care about their lives outside work.
Culture might sound soft, but it directly impacts retention. Workers want to work somewhere they feel valued.
Recognize and Appreciate Workers
Acknowledge good work. It costs nothing and means everything.
Workers remember how you made them feel more than what you paid them.
Improve Communication
Keep workers informed about:
When workers feel informed, they feel respected. When they're kept in the dark, they feel like outsiders.
Address Problems Quickly
Don't let issues fester. When conflicts arise, address them. When equipment breaks, fix it. When workers raise concerns, investigate them.
Nothing says "we don't care" like ignoring problems. Workers notice when management responds to their concerns. They also notice when management doesn't.
Build Team Cohesion
Help crews bond:
Workers who feel connected to their team are less likely to leave. They're not just walking away from a job—they're leaving friends.
Hold Everyone Accountable
Apply rules consistently. Don't let toxic workers stick around because they're skilled or have been there forever.
When you tolerate bad behavior from some while demanding better from others, good workers lose respect for management. They leave for companies with integrity.
Modern technology can make construction workers' lives easier. That keeps them around.
Construction workers work in the field, not offices. They shouldn't need to return to an office for basic tasks.
Mobile Time Tracking
Nobody likes filling out paper timesheets or waiting in line at a time clock. Mobile time tracking lets workers clock in from job sites, reducing administrative headaches.
Good mobile time tracking:
Digital Safety Training
VR safety training significantly improves comprehension and retention compared to traditional methods. Workers engage more and remember more.
Mobile safety apps let workers:
Field Communication Tools
When workers can't get information they need, projects stall. Mobile communication tools keep everyone connected.
When workers interact with your company for HR needs, make it easy.
Self-Service Portals
Workers shouldn't need to call HR for basic information. Give them self-service access to:
Streamlined Onboarding
New workers form opinions about your company immediately. Make their first impression positive with efficient onboarding.
Digital onboarding:
Clear Benefits Information
Workers can't appreciate benefits they don't understand. Use technology to clearly explain:
Technology can help you spot turnover risks before workers quit.
Track Engagement Metrics
Monitor indicators that predict turnover:
When you spot patterns, intervene early. Have conversations before workers decide to leave.
Conduct Stay Interviews
Don't wait for exit interviews. Have regular stay interviews asking:
Use survey tools to collect feedback regularly. Act on what you learn.
Analyze Turnover Patterns
Look for trends in who's leaving and why:
Data reveals problems you might miss otherwise. Maybe one supervisor creates toxic environments. Maybe workers leave right after finishing training. Maybe pay becomes uncompetitive at certain levels.
You can't improve what you don't measure. Track these metrics to see if your retention efforts work.
Overall Turnover Rate
This is your baseline. Calculate it monthly and annually:
(Number of Workers Who Left ÷ Average Number of Workers) × 100
Track separately by:
Voluntary Turnover Rate
Voluntary turnover (workers choosing to leave) matters more than overall turnover. Layoffs between projects are different from workers quitting.
Focus retention efforts on reducing voluntary departures.
90-Day Turnover Rate
33% of workers quit within their first 90 days. That's expensive because you've invested in onboarding without getting much return.
Track new worker retention separately. High 90-day turnover indicates problems with hiring, onboarding, or early job experience.
Time to Fill Positions
How long does it take to replace workers who leave? Longer times mean:
Cost Per Hire
Track everything you spend to fill positions:
When you know your real costs, you can justify investing in retention.
Don't wait for workers to quit to know you have problems. Watch for warning signs.
Employee Satisfaction Scores
Survey workers regularly on:
Declining scores predict turnover before it happens.
Training Completion Rates
Workers who stop completing training might be checked out mentally. They're not investing in growth because they're planning to leave.
Absenteeism Patterns
Increased absences or pattern changes (like Monday/Friday absences) often precede resignations. Workers are interviewing or just don't care anymore.
Safety Participation
When engaged workers stop participating in safety meetings or reporting hazards, something changed. They might be planning their exit.
Know how you compare to others in your market and industry.
Industry Averages
Construction turnover typically runs 20-30% annually, but this varies by region and company size. Find benchmarks specific to:
Local Market Comparisons
In tight labor markets, turnover runs higher. In slower markets, workers stick around longer. Compare yourself to local competitors, not national averages.
Your Own Historical Trends
Are you improving or getting worse? Track your turnover over time. Set goals for improvement and measure progress.
Information without action changes nothing. Here's how to actually implement retention improvements at your company.
You can't fix problems you won't admit exist. Be brutally honest about where your company stands.
Survey Your Current Workers
Ask them directly:
Make surveys anonymous. Workers won't be honest if they fear consequences. Use a third party if necessary.
Conduct Exit Interviews
When workers leave, find out why. Not the polite reason—the real reason.
Ask:
Look for patterns. If multiple workers cite the same supervisor, you have a problem with that supervisor. If everyone mentions pay, you have a compensation problem.
Analyze Your Data
Review the past year:
Data reveals problems that aren't obvious day-to-day.
Don't try to fix everything at once. You'll overwhelm yourself and accomplish nothing. Prioritize.
Identify Your Top Three Problems
Based on your assessment, what three issues cause the most turnover? Maybe:
Focus there first. Fix these three before moving to other issues.
Set Specific Goals
Vague goals like "improve retention" don't drive action. Set specific targets:
Make goals measurable and time-bound.
Assign Responsibility
Someone needs to own each initiative. Don't leave retention efforts to "whoever has time." That means nobody does it.
Assign specific people to:
Budget Appropriately
Retention improvements cost money. But they cost less than constant turnover. Allocate budget for:
Calculate what turnover costs you now. Investing 20-30% of that in retention still saves money.
Start with quick wins to build momentum. Then tackle bigger changes.
Month 1-3: Quick Improvements
Make changes that don't require major budget or policy shifts:
These changes show workers you're serious about improving.
Month 4-6: Structural Changes
Tackle bigger issues requiring more time and resources:
Month 7-12: Cultural Transformation
Build lasting changes to how your company operates:
Don't implement improvements silently. Make sure workers know what you're doing and why.
Explain the Why
Tell workers:
Be specific about what's changing and when.
Show Progress
As you make improvements, communicate them:
Workers need to see that their feedback led to action.
Be Transparent About Limitations
You can't fix everything immediately. Be honest:
Workers respect honesty. They'll work with you if they see genuine effort.
Your first attempts won't be perfect. That's okay. Monitor results and adjust your approach.
Track Metrics Monthly
Review key metrics every month:
Spot problems early and address them.
Solicit Ongoing Feedback
Keep asking workers what's working and what isn't:
Show workers you're listening continuously, not just once.
Adjust Your Strategy
When something isn't working, change it. When something works well, do more of it.
Maybe your training program isn't attracting participants. Adjust the timing, format, or content. Maybe your recognition program isn't motivating anyone. Try different approaches.
Don't get attached to specific tactics. Stay focused on the goal: keeping good workers.
Theory is nice. Real examples are better. Here's what's actually working for construction companies.
The Problem: Annual turnover over 60%. Projects constantly delayed by staffing gaps. Spending $300,000+ annually on recruiting and training.
What They Changed:
The Results After 18 Months:
Key Lesson: Pay matters, but so does showing workers a future.
The Problem: Couldn't compete on pay with larger companies. Lost trained workers constantly. Struggled to complete projects on time.
What They Changed:
The Results After 12 Months:
Key Lesson: When you can't pay the most, be the best place to work.
The Problem: High turnover among young workers. Couldn't build pipeline for aging workforce. Safety incidents increasing.
What They Changed:
The Results After 24 Months:
Key Lesson: Invest in development and workers invest in you.
You won't eliminate turnover completely. Construction's project-based nature creates some unavoidable workforce changes. But you can significantly improve from industry averages.
Realistic targets depend on your starting point:
Don't expect overnight transformation. The average construction turnover rate runs 20-30% annually. Getting below 20% puts you ahead of most competitors.
Set incremental goals. Reducing turnover 10 percentage points yearly is significant progress. That translates to real cost savings and operational improvements.
Calculate what turnover currently costs you. According to research, replacing workers costs 16-20% of their annual salary for hourly workers, and up to 213% for specialized positions.
A mid-sized company with 50 employees and 30% turnover might spend $150,000-250,000 annually on turnover-related costs. Investing 25-40% of that ($40,000-100,000) in retention still creates significant savings.
Budget priorities:
Remember: Your retention budget competes against certain savings from reduced turnover. It should pay for itself within 18-24 months.
You don't need to be the highest payer in your market. But you can't be significantly below average—maybe 5-10% under at most.
Workers will accept slightly lower pay when you provide other value:
However, at a certain point, the pay gap becomes too large. Studies show 50% of construction workers will switch jobs for just $1-4 per hour more.
The sweet spot: Within 5% of market average base pay, but competitive or better on total compensation when including benefits, bonuses, and working conditions.
Seasonal slowdowns challenge every construction company in cold climates. Several strategies help:
Cross-Train for Indoor Work: Develop capabilities in interior work that continues through winter. Train exterior workers on interior trades so they can shift during slow periods.
Plan Maintenance and Training: Use slow seasons for equipment maintenance, facility improvements, and intensive training programs. Keep workers employed on productive activities even when project work slows.
Build Project Pipeline: Secure winter-appropriate projects in advance. Seek indoor work, southern projects, or maintenance contracts that provide steady winter work.
Offer Retention Bonuses: Pay bonuses to workers who commit to returning in spring. Knowing they have guaranteed work helps them weather slow periods.
Communicate Early: Let workers know in September what winter looks like. Being upfront about expected hours and timeline helps workers plan rather than panic.
Maintain Contact: If layoffs are unavoidable, stay connected with laid-off workers. Make it clear you want them back. Check in periodically. Bring them back as soon as work allows.
Some turnover during seasonal slowdowns is unavoidable. Focus on retaining your core crew and key skilled workers.
Young workers (under 30) have different priorities than older generations. Strategies that work:
Career Development: Young workers want growth. Show them a path from entry-level to advanced positions. Provide training and certifications. Give them increasing responsibility as they prove themselves.
Technology: Young workers expect modern tools. Paper timesheets and manual processes frustrate them. Invest in mobile apps, digital tools, and current technology.
Safety Culture: Construction employees aged 24 or younger show turnover rates around 64%. Safety matters enormously to this generation. Strong safety culture attracts and keeps them.
Meaningful Work: Help them see how their work matters. Connect their daily tasks to finished projects and satisfied clients. Young workers want purpose beyond just a paycheck.
Flexibility When Possible: This generation values work-life balance more than previous ones. Provide flexibility when projects allow. Consider things like:
Mentorship: Pair young workers with experienced mentors. They want to learn from veterans. This also helps veterans feel valued.
Young workers won't stay for "this is how we've always done it." Show them a future, invest in their growth, and run a modern operation.
Make the business case with numbers leadership understands:
Calculate Current Turnover Costs: Show exactly what turnover costs annually. Include:
Project Retention Investment ROI: Demonstrate how retention investments pay for themselves:
Show Competitive Disadvantage: Explain how turnover hurts competitiveness:
Compare to Industry Benchmarks: Show where your company stands versus competitors. If your turnover is 45% and industry average is 25%, that's a competitive problem.
Present Quick Wins: Suggest starting with low-cost improvements that show immediate results. Success with initial efforts justifies larger investments.
Frame as Investment, Not Cost: Position retention spending as investing in your workforce asset, similar to equipment investments. The return is measurable and significant.
Not every departure is preventable. Even companies with great retention programs lose workers. That's normal. Focus on:
Exit Interviews: Learn why they're leaving. Maybe you missed something. Use that information to improve.
Maintain Relationships: Part on good terms. Workers might return after trying other companies. Stay connected through industry events or social media.
Continuous Improvement: Keep refining your approach. What works today might not work tomorrow. Stay current with worker needs and market conditions.
Focus on Outcomes, Not Perfection: Your goal is reducing turnover, not eliminating it. Cutting turnover from 40% to 25% is huge success even though 25% still leave.
Celebrate Successes: When workers stay because of your improvements, recognize that. Use their stories to motivate continued retention efforts.
Some workers will always choose higher pay over better conditions. Others will leave for family reasons. Some will change careers entirely. You can't prevent all turnover. But you can create an environment where most workers choose to stay.
Track these key metrics monthly:
Turnover Rate Trends: Compare current period to previous periods. Look for declining trend over 6-12 months.
Exit Interview Themes: Are departures for the same reasons or different ones? If your pay adjustment eliminated "better pay elsewhere" as a reason, that's progress.
Time-to-Fill Positions: Are you filling openings faster? That suggests better reputation and easier recruiting.
Internal Promotions: Are more workers being promoted from within? That shows successful development programs.
Worker Satisfaction Scores: Do quarterly surveys show improving satisfaction? Track specific categories like pay, management, safety, and career development separately.
Voluntary vs Involuntary Turnover: Voluntary turnover should decrease if efforts work. Involuntary turnover (layoffs, performance issues) might not change much.
Referrals: Are more current workers referring friends and family? Workers don't recruit for companies they plan to leave.
Project Performance: Turnover affects project completion rates, safety records, and quality. Improvement in these areas indicates retention success.
Give retention initiatives 6-12 months before judging results. Cultural change takes time. Quick metrics might not show full impact immediately.
Construction turnover is expensive, disruptive, and exhausting. It doesn't have to be this way.
The companies with low turnover aren't lucky. They're intentional. They've decided keeping workers matters as much as winning bids or managing costs. They invest in their people because they understand people drive everything else.
You can't eliminate turnover completely. Construction's project-based nature creates some workforce movement. But you can absolutely reduce it below current levels. Companies proving that every day.
It starts with honest assessment. Where does your company really stand? Why are workers actually leaving? What problems can you fix?
Then comes action. Not everything at once. Pick your top three issues and fix them. Make workers' lives better in tangible ways. Show them a future with your company.
Communicate what you're doing. Don't make improvements silently. Tell workers you heard them and you're acting on their feedback.
Track results. Measure what's working. Adjust what isn't. Stay committed beyond initial efforts.
The math makes sense. Companies can spend $660,000 to $2.6 million replacing workers who quit, just for a company with 100 employees making $50,000 annually. Investing even 30% of that in retention still saves enormous money.
But it's not just about money. It's about building a company where people want to work. Where they develop skills and advance careers. Where they feel valued and respected. Where they're proud to tell friends they work for you.
That kind of company wins more bids because word spreads about quality. It completes projects faster because teams work smoothly together. It attracts better workers because talented people want to work somewhere great.
Your competitors face the same retention challenges. Most aren't doing much about it. They accept high turnover as unavoidable reality. That's your opportunity.
Start small if you need to. Fix one thing. Then another. Build momentum. Celebrate wins. Keep improving.
A year from now, you could be dealing with the same frustrating turnover, constantly replacing workers, explaining delays to clients, and watching money flow out the door.
Or you could have stable crews completing quality projects on schedule, with workers who want to stay and grow with your company.
The choice is yours. The time to start is now.
Build a construction company where talented workers want to stay. Learn how modern HR and employee management solutions support retention while reducing administrative burden and improving operational efficiency.