To Combat the Skilled Labor Shortage, Create a Culture Employees Want to Be Part of For the Long Haul

Contractors can no longer depend on a steady flow of new employees. That’s why many are refocusing human resources efforts to create a more employee-centric culture that keeps current staff happy and productive, improves loyalty and appeals to the future workforce.

As the industry struggles to improve its reputation among the younger generation, many tactics can be used to foster a company culture that improves employee retention. Offer attractive benefits packages. Provide access to training and education. Keep communication with leadership clear and comfortable. Focus on safety. Encourage employees to become active in their communities. And, don’t be afraid to have a little bit of fun.

Beyond Basic Benefits

Most contractors offer employees health care benefits, but some go a step further to develop robust health care packages that include employee wellness programs. That’s the case for Nova Group, a prime contractor based in Napa, Calif., that works exclusively for the U.S. Department of Defense. With a team averaging between 200 and 250 employees, retention is key.
“We work out of the country in some not really great places, so it’s critical that our people want to go with us,” says Vice President Carole Bionda. “We have competitive salaries and better-than-average benefits. We’ve been doing that for 20 years and it shows in our retention rate.”

The company was named one of the best places to work from 2009 to 2016 by the North Bay Business Journal, and won a Healthiest Employer award in 2015 and 2016 from the San Francisco Business Times and the Silicon Valley Business Journal.

Nova Group offers employees a PPO medical plan that is completely covered by the company—so it’s free to employees. It offers plans for vision and dental, which also covers orthodontia, as well as long-term disability plans, a 401(k) program, profit sharing, paid time off, paid holidays and more.

But Nova Group goes beyond traditional medical care by implementing a wellness program. As part of the program, the Wellness Committee creates fun programs and incentives to encourage healthy behavior in exchange for points that can be redeemed for gifts or money. Recently, it held a competition that encouraged employees to drink at least eight glasses of water per day to win $200. In addition, the company created a nature trail, and if employees do the trail five times (4.25 miles), they earn gifts. It holds lectures on health at lunch, and employees earn points by attending.

“At any different time, there’s a menu of programs because different people do different things,” Bionda says. “The Wellness Committee tries to have a full range of activities so field staff can do it at their jobsites and we can do it in the office. We keep it updated so it doesn’t get stale.”

Eldeco—an electrical contractor based in Greenville, S.C., with approximately 600 employees—also recently was recognized for its employee benefits program as a finalist for the Southeast High Performing Health Plan Award at the 2017 Arthur J. Gallagher & Co. HPHP Summit. It offers medical, dental and vision coverage, flexible spending accounts and a highly successful wellness program that averages more than 80 percent employee participation. In addition, Eldeco provides a telemedicine option at no cost—a major benefit to the high number of employees working away from home. The company also offers life insurance, short-term disability, cancer insurance, paid time off, paid holidays, 401(k), one-on-one financial counseling and more.

Eldeco leadership doesn’t just make executive decisions about benefits. Instead, they talk to employees to determine what’s needed and what would keep the team happy. For example, they recently learned employees needed to pay out of pocket for prescription safety glasses, so Eldeco leadership worked to make sure prescription glasses were fully covered in the future.

“We take feedback from employees to see what their needs are,” says Vice President Mike Chapman. “When they say something to us, we look into it and see what we can do to improve the situation.” These efforts pay off. Chapman says 10 percent of the company’s employees have been with Eldeco for more than 10 years.

In addition to offering a 401(k) and medical plan, all 200 full-time employees of Harkins Builders—a contractor based in Columbia, Md., that focuses on commercial, government and multifamily projects—are eligible to become partial owners after one year of service. If an employee participates in the employee stock ownership plan (ESOP), 10 percent of their total compensation plan goes into an account as stock in the company. When the program was first implemented in 2001, employees were skeptical. Now, there are non-executive employees with $1 million in their ESOP account, according to President and COO Gary Garofalo.

“It took awhile for people to believe it was actually happening,” Garofalo says. “But then employees started to retire and pay out their ESOP benefits.” That program alone is huge in regard to employee retention.

Emphasizing Education

To increase employee retention and make employees feel as though they have a clear path to professional or craft development, many contractors, including Harkins Builders, offer educational assistance and training programs. “A lot of people will leave a company if they don’t see a path to development,” Garofalo says.

Harkins Builders began an emerging leaders program after realizing a lack of possible future leaders existed in the company. Employees are chosen to participate in the two-year program, offered through University of Maryland, Baltimore County’s Training Center, to learn leadership and management skills. In the program, student employees look for solutions to company-wide problems. Last year, they worked to find solutions to hiring high-quality subcontractors to work on inner-city projects with requirements for using smaller or disadvantaged contractors. This year, they are working on determining ways to hold company leadership accountable using respectful communication techniques.

The 2,400 employees of TDIndustries, a Dallas-based construction and facilities services company, offers nearly unlimited tuition and vocational training at no cost to the employee. Employees who earn certifications while working for TDIndustries can keep the certification even if they decide to leave the company.

“It’s about educating the whole person,” says Chief People Officer Amy Messersmith. “If they leave after we’ve invested in their education, maybe they’ll come back.”

Nova Group offers an educational assistance program that pays for all tuition as well—and employees have used it to their advantage. Many engineers, accounting and administrative staff earn accreditation and higher degrees, and field staff attends management classes.

Eldeco implemented an apprenticeship program to train employees and keep them updated about code developments. In addition to high-quality training, Eldeco makes sure employees are armed with the best tools. The company recently invested more than $2 million in updated tools and technology, from software programs and hardware to field mechanical tools such as benders and threaders.

Success in Safety

When Eldeco brings a new employee on board, it immediately issues the person a stop work card signed by the CEO that can be used to stop work if he or she sees an unsafe situation. “All employees can stop the task at hand and ask for a reevaluation,” Chapman says. “It empowers them because they have a voice in safety.”

Employees on TDIndustries’ jobsites have a similar ability, as one of the company’s core values is fiercely protecting the safety of all partners. “TDIndustries is extremely aggressive and deeply committed to safety and ensuring every partner goes home as good as they were when they came in that morning,” Messersmith says. The company exemplifies that commitment in two ways.

First, every leader at every level of the company completes weekly safety-based behavioral observations that enable leaders to complement and encourage safe behavior, and provide developmental and constructive feedback if a problem is observed.

Second, all employees on a job—including apprentices—can verbally shut the project down if they see unsafe work that is not being immediately corrected. Everyone in the company feels confident calling out unsafe work because TDIndustries is 100 percent employee owned.

“Because we are all employee owners, we all have an owner mindset,” Messersmith says. “As owners, none of us would want to put the business or our people in danger.”

Nova Group takes a unique approach to encouraging safety. The company holds a barbecue every quarter if its fabrication facility avoids a recordable incident. Recently, the facility celebrated a big victory: 1,000 workdays without one recordable.

Clear Company-wide Communication

Encouraging employees to report safety incidents largely comes down to a company culture in which they feel safe to communicate with superiors. TDIndustries harbors that notion by implementing performance reviews for employees and leadership.

All employees meet with their supervisors four times per year to discuss performance and whether they are on track to meet personal development and work goals. They also discuss what employees need from their supervisors to thrive and meet their goals.

“These frequent and meaningful conversations create cohesiveness between supervisors and their direct reports and team,” Messersmith says. “They also create a roping together and a sense of purpose, understanding and transparency.”

But it’s not just regular employees being reviewed; the company conducts annual supervisor surveys as well. During these reviews, reports provide feedback about their supervisors’ key leadership characteristics. TDIndustries uses that feedback to determine areas in which supervisors may need personal development or coaching.

Receiving honest feedback on those surveys is only attainable through a culture in which employees feel comfortable to communicate—something TDIndustries takes very seriously. “One of the underpinning behaviors is we say there’s no rank in the room,” Messersmith says. “That really opens up people and helps them to feel free to share their perspectives, and it creates diversity of thought.”

Caring for the Community

Another one of TDIndustries’ core values is leading with a servant’s heart. From the company’s beginnings, it has been
involved in serving its community. The company focuses heavily on community service, and its leadership understands the importance of maintaining trusting relationships with the communities in which the company works.

Community outreach is key for Harkins Builders as well. When the company makes a hiring decision, it’s looking for more than just a qualified worker. It’s also looking for a well-rounded, kind person to bring on the team. The company is involved in many charitable events around the communities in which it works, and highly suggests employees participate in some capacity.

When employees are reviewed each year, they are asked how they contributed during the year to their communities. “That’s the ideal employee, someone who’s a team player and looking to help those who are less fortunate,” Garofalo says. “That’s a great employee and a great person.”

In today’s tough labor market, the only way to retain qualified employees is to take actions that make them want to stay. By focusing on creating a company culture in which employees feel safe, heard and as though there is a clear path to professional development, Harkins Builders, Nova Group, TDIndustries and Eldeco experience high retention rates and productive employees.

“When a company is gracious, extends trust and does its best to treat people well, employees appreciate that,” Messersmith says. “It’s our job to do right by the people who work for us so they can do right for the customers they serve.”