Dealing With the Employee Shortage Within the Construction Industry
The current employee shortage within the construction industry is one issue that simply cannot be overlooked by employers. Many factors, including retirement, job transition, a tough work environment and physical job requirements, have led to some of the highest levels of unfilled jobs within the construction industry in recent years. It is estimated that the industry, as a whole, will need to hire an additional 2.2 million workers over the next three years in order to mitigate industry expansion and the worker shortfall. There are numerous strategies that can be used in order to attract and retain talent, including some that benefit both the company and employees financially.
Acquiring new talent that will be a good fit with the company starts before anyone even walks through the door. Moving away from the more traditional hiring methods and taking an assessment-based or skills-based approach when interviewing and hiring can help broaden the candidate pool. It also allows employers to match individuals with the company’s needs more accurately. This means putting less emphasis on a candidate’s education or degrees, and more emphasis on their experiences and motivations. This can also help to determine what the potential employee is looking to gain from the company. For instance, are they just seeking a job or rather a long-lasting career?
One of the most important tools that companies have are their employees, and employers need to show that. It is imperative that employers invest in their current employees just as much as new hires. Actively meeting with employees to communicate which practices are working and which are not, having conversations about their future with the company and listening to their feedback is key to retaining the most talented workers. Additionally, offering reimbursements to employees for business expenses, such as vehicle mileage and use of personal tools, that they pay for personally, can be a solution where everyone benefits. With the elimination of the deduction for employee business expenses on the individual level, companies are having to establish accountable plans. When employers reimburse their workers for business expenses, the employer gets a tax deduction for the expense while the employee receives tax-free compensation. These accountable plans can help show employees that they are valued, while also providing tax benefits for both parties.
Having the ability to determine which employees possess the skills to advance professionally within the company is also an important component. Being able to identify which employees have the attributes needed to succeed in key roles, and communicating that to them, lets the employees know that they are valued. When key employees are identified, it is especially important to retain those individuals. A good way to incentivize these key employees is through compensation linked to the value or the profitability of the company. It can ensure that those key employees know they are appreciated and important to the company. There are different forms of equity compensation that employers can offer, including stock options or direct ownership of stock. Other forms of compensation, such as performance bonuses, can be linked directly to the profitability of the company. This gives key employees a vested interest in the current and long-term success of the business. Not only does this provide comfort to the employee knowing that they are valuable, but it also motivates them to keep performing at a high level since they have a stake in the rewards. When employees feel important and can see their future with the company, they are more likely to stay with their current employer.
The labor shortage is affecting many employers in today’s workplace, both within and outside of the construction industry. As a result, the hiring process and employee retention strategies are evolving past the traditional practices; strategically and financially. It is imperative that employers continue to improve on their techniques and grow in order to fulfill their needs.
Contributing Author: Nicholas L. Shires, CPA, is the partner-in-charge of tax services at Dannible & McKee. Nick has over 17 years of experience providing tax and consulting services to a wide range of clients, including individuals and privately held companies. This article was also co-authored by Abby K. Sweers, a tax senior at Dannible & McKee, LLP. For more information on this topic, you may contact Nick at firstname.lastname@example.org or (315) 472-9127.