Mentoring to Reduce Turnover

As a business owner or manager, if you are spending time searching for that “silver bullet” solution to stopping turnover, you will find that there is no perfect strategy, no earth-shaking news-no “silver bullet.” However, don’t give up. There are three “back-to-basics,” fundamental processes that should exist in every construction business today with the end result of retaining your top talent:Hire the right people for the right job

1. Mentor
2. Provide training

These “back-to-basics” ideas will improve your success in attracting and retaining the best of the best.

Hiring the Right People for the Right Job

You must understand the workforce you are working with. Consider what drives the new workforce, what motivates it and what keeps it engaged. What motivated and satisfied an employee thirty years ago, or even as few as five years ago, is not the thing that we see today. The current generation watched their parents’ and grandparents’ loyalties to one employer often go unrewarded and unnoticed. The current workforce has a renewed sense of loyalty to family, friends, and themselves. This is not to say that they are not willing to be loyal to an employer, but it takes a lot more to develop and foster an “earned” loyalty after recognizing the key question of today’s workforce: “What’s in it for me, and what’s in it for my family?” This new workforce wants it sooner, bigger and better than we, as employers and business owners are used to providing. Additionally, they want to be trained, receive regular and consistent feedback and be recognized, or patted on the back. This type of recognition in the past came in the form of a paycheck-today it’s more than just pay and benefits.

What is it that has created the need for having it bigger, better and faster? This is the generation of high-tech, savvy multi-taskers. Contrast the trends of past years and generations with today’s world. The “Millennial Generation” (or Generation , individuals born from about 1980 through and including 1994) is able to find any piece of information or data with the click of a mouse. “Paying your dues” is a term that is rarely used or recognized by this workforce.

There has been a paradigm shift in recent years that is difficult for many companies to wrap their arms around, but it’s one that the industry cannot afford to ignore. According to a Bureau of Labor Statistics (BLS) report, by 2010 there could be as many as ten million more jobs available than workers to fill them. This challenge for our industry is often greater than the rest of the business world experiences. The amount of potential workers entering the construction workforce diminishes each year. A recent survey of high school students showed that a career in construction ranked 249th of 250 in terms of appealing careers, next to exotic dancing (which ranked 250th).

Let’s examine the basic steps to attract and retain employees in a quick and cost-effective way. Evaluate and discuss your practices for hiring top talent. Every good manager needs to devote equal attention to the details in selecting the right candidate, as well as in retaining the employee once he or she is on board. What often gets missed in this is selecting the right candidate for the right job. Typically, a need for a new employee arises and because of the quickness required in adding an employee, we use the mirror test: if they fog the mirror, they’re hired. Generally, we don’t stop to realize that without a detailed selection process, we either hire the wrong person all together, or we hire the right person for the wrong job. The old adage, “You can’t put a square peg in a round hole,” is often what we do in attempting to select the right candidate. The process of hiring the right candidate should begin with identifying what skill sets and experiences are required for the position. Failure in the selection process often results in failure in the retention process.­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

Mentoring to Retain

When we talk about assets, we talk about equipment and other such physical aspects of the work.  In a recent meeting, I asked our leadership team how they would classify our employees-“assets” was not suggested. This is not to find fault with our leaders—but it simply illustrates the industry mindset of the value we place on our people.

In reading this statement, some will argue that this is not true: “I do value people in our organization.” However, valuing people is more than placing a slogan on the wall or creating a mission statement in the employee handbook. The saying that “it takes more than just words” is proven time and time again. We must walk the walk and talk the talk and show our people that they are the greatest assets. One way to demonstrate this is through careful and conscientious mentoring. We should remember that we are living in the knowledgeable era and employees want to “know.” A company’s human capital constitutes its most crucial competitive edge.

People are truly an organization’s greatest asset. However, when employees perceive they are under-valued and go unrecognized, they can be an organization’s greatest liability. The results of the most comprehensive labor study ever conducted were recently presented in a HR publication. The study found that employee turnover costs the U.S. economy an estimated $5 trillion, “making it the most significant cost to our economy and one of the most ignored economic factors in business history.” The construction industry does not escape these costs.  Many recent studies have shown that the expense of replacing a senior-level project manager can be up to 250 percent of their annual salary; a superintendent or entry-level manager, conservatively speaking, 150 percent.

These statistics are alarming but should not be surprising. The shortage in the construction workforce and the effects of turnover are not problems that have happened overnight or that will be quickly resolved. The solutions to these problems in many cases are simple ones. In many studies on turnover, it has been shown that employees do not quit their jobs—they quit their managers. Simply put, leaders need to lead. If a leader possesses simple mentoring skills and uses basic tactics of recognition, they are far more likely to build loyalty and engagement with their employees than those leaders who simply treat everything as “business as usual.” Fred Reichheld found that just a 5 percent increase in employee loyalty can increase profits by as much as 50 percent—employee loyalty and engagement tie directly to bottom-line profits.

Training = Retaining

The point where we go astray is in the first few weeks of employment with a company. In those crucial days and weeks, expectations are set, impressions are made and behaviors are formed. We are all busy building the work and running projects. Initial orientation and training are lost in the shuffling of what are considered more important and more relevant duties. A simple mentoring and training program will go a long way to build loyalty, ensure engagement and retain top performers.

Exit interviews and employee forums, often reveal to us the need for more adequate training. While attending career fairs all over the Intermountain West this past fall, I heard the following questions repeatedly for a while from students entering the construction industry, “What type of training will I receive?”

Creating a mentor and training program is easier said than done. However, if you don’t make the time, it will cost in productivity, turnover and lost revenue. A study printed in Fortune Magazine showed that an $18,000 investment in mentoring and training resulted in $108,000 return on investment.

At W.W. Clyde & Co. one of our long-term strategic initiatives is to create a culture of mentoring, in addition to a formal program. One of the aspects of this initiative has been establishing a formal internship/new employee on-boarding and training program. This new program includes basic orientation, a discussion of expectations, company introductions, a layout of the structured training program and job tours to introduce them to the variety of projects. The mentors participating in the program were hand-picked by company leaders and received mentoring training. The creation of this new program is a direct result of the feedback received from our recruiting. It is too early to give statistical results, but our informal effort over the past couple of years has paid off and led us to formalize the process and take it to the next level.

Key concepts that leaders must understand:

• We are not managing work—we are leading people. 
• We can be the most knowledgeable and the most seasoned in our specific assignments but if we are not good leaders, our employees will not be.
• Retention is not just an HR issue—it is the responsibility of every leader in the organization to retain top talent.
• You must work toward creating a work environment where employees never want to leave. Creating this environment does not require corporate initiatives that take a lot of time or that cost a lot of money. Use your common sense, apply what you know and remember—it is the smallest and most basic things that matter.

There is no silver bullet, no high-priced motivational speaker that can come into your organization and give you all the answers to successfully retaining your high performing employees; it has to come from you, the leader. Mentoring goes beyond the big issues of pay and benefits. When we focus on attracting and selecting top talent and build strong mentoring and training programs, the result is a strong, engaged workforce and a healthy bottom line.

Construction Business Owner, July 2008