HR in the Construction Industry

James Barrett
James Barrett
How does HR in the construction industry differ from HR elsewhere? Successful construction companies have HR departments that place a heavy emphasis on safety. HR plays a key role in ensuring the safety of employees, making sure they’re paid according to state and federal law, and ensuring that training and certifications stay up to date and are documented. How can HR increase its effectiveness within the construction industry? Read on to find out.

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Why Is HR Important in the Construction Industry?

Specific aspects of recruitment and hiring, performance management, and strategy management are just a few of the reasons why HR is so important to the construction industry.

  • Recruiting and hiring. Businesses in the construction industry generally face high turnover. HR plays a critical role in finding skilled workers, filling talent gaps, and developing talent.
  • Performance management. HR ensures that performance is managed consistently and clearly. Promotions, career development, terminations and compensation are all supported through the use of performance reviews. Performance reviews can be an excellent way to help set clear expectations. For example, they can help provide clear direction for a general laborer on how to learn a new skill, trade, or even advance to the position of a safety manager or foreman. Feedback doesn’t always have to be during a review, though. Frequent, informal feedback can dramatically increase job performance.
  • Strategy management. An HR professional with solid business acumen can have a great impact on a company’s bottom line. Effective HR leaders in construction need to know how the company runs in order to develop strategy for present and future needs. Once business needs are defined, don’t wait for the company to tell you where HR fits in. Make it your business to know what’s possible in the construction industry. For example, if your construction company has a “go-green” initiative, transform your paper processes into electronic, streamlined ones that save the business time and money.

What Are the Responsibilities of HR in Construction?

HR is responsible for onboarding, employee benefits, compliance, safety, payroll, training, certifications, offboarding—and everything in between. If these are effectively executed, an HR professional in the construction industry can go from good to great. Here are three essential areas of HR expertise.

Compliance

If a job ends and a crew travels to a new state for work, HR must understand and maintain compliance with state and federal laws which govern the payment of wages and hours worked. HR also makes sure that all employees are authorized to work in the United States and documents that appropriately.

Benefits

Benefits and turnover can go hand in hand. Understanding and offering comprehensive benefit packages helps you recruit and retain skilled employees. The overall goal of this is to avoid the high cost of turnover.

Safety

Ensuring that correct safety protocols are understood and followed greatly mitigates risk and lowers the possibility of accidents, injuries, higher health insurance premiums, fees, and even lawsuits. HR is responsible for compliance with Occupational Safety and Health Administration (OSHA) regulations, preventing and deconstructing discrimination or harassment, and the development, training, communication, and documentation of safety programs.

Common HR Challenges in the Construction Industry

The average turnover rate of the construction industry is higher than most, and is a common challenge. A lack of understanding of the business and a lack of support from line management can also create hurdles for HR leaders desiring to make positive changes within an organization.

Understand the Construction Industry

It can be difficult for an HR professional new to the construction industry to implement changes and create policies without first understanding the challenges faced by field employees. You can gain new insights by understanding the challenges and processes of employees who work in the field. Performing a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) can also give you an idea of what direction the business is headed in—what’s working, what isn’t, and how you can help.

Gain the Support of Line Management

Once you understand the industry and company you work for, you can begin to create strategies and process improvements. Rather than trying to force line management, project managers and foreman to follow policies, try offering them relevant solutions to the issues they face. This is possible by adapting and delivering new policies or changes to them in such a way that solves the problems they are experiencing in the field.

Cost of Turnover

Turnover is very costly in construction. One example of this is when employees switch jobs after a project ends. Layoffs at the end of projects results in increased unemployment taxes (SUTA and FUTA). Of course, the high cost of turnover in any industry in recruiting and training new employees also applies.

HR Strategies for a Construction Company

HR strategy should always align with the construction company’s business strategy. If you’re not sure what your company’s business strategy is, try starting with the mission statement. A company’s values, mission, and vision are typically found within a mission statement, which can help you formulate an HR strategy. Other important strategies include onboarding, mentorship, and a positive culture.

Create an Engaging Onboarding Experience

Make onboarding easier and more effective by streamlining paperwork and checklists through technology. Automated processes save time and increase compliance. This, paired with a structured orientation, can positively impact your retention rate. It’s important to realize that onboarding isn’t a singular event. Your strategy should include what you want employees to learn about your culture and how you’re going to measure results.

Increase Retention With Mentorship

Investing in a mentorship program that supports both mentees and mentors through weekly check-ins can increase the likelihood that employees stick around for the long term. A mentor acts as a role model for a new employee and works closely with them to show them the ins and outs of their role. They can show mentees how to perform a job correctly, which tools to buy, help them navigate the company, and help them achieve their work goals. Mentors are chosen based on their wisdom, knowledge, skills and abilities. Although a mentorship program is an investment, it can increase employee engagement and be of great benefit to your organization.

Improve the Culture

Employees leave managers or teams, not jobs. Communicating the company values and mission, making sure each employee knows how they contribute to the big goals, giving plenty of feedback, and providing a healthy work/life balance are all ways to nurture a culture that leads to retention and a strong bottom line.

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Questions You’ve Asked Us About HR in the Construction Industry

How can HR be more effective in a construction company?
Spend time outside the office with employees in the field and understand the direction the business is going. More time spent with and communicating with employees will increase their trust in you. HR is the voice of the culture of an organization, which is why you must improve your communication skills in order to go from a “good professional, to a great leader.” The better you are at communicating and understanding processes in the field, the better you will be at explaining return on investments and proposing new programs.
Should all construction companies hire HR personnel?
HR plays a key role in hiring, worker safety, compensation, benefits, performance management, and employment law. Operating without an effective HR department can lead to legal and productivity issues. If a construction company chooses not to hire HR personnel, they could try an outsourced HR model. However, the problem with outsourcing is that there may be a cultural disconnect along with a lack of control over HR processes.
James Barrett
James Barrett

James has worked in the HR field going on 5+ years and currently serves in the role of HR Manager. His areas of expertise are in managing recruiting, onboarding, HR metrics, performance and engagement, employee relations and development. He has earned a masters degree in HR along with the nationally recognized certification of SHRM-CP.

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