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How to boost your bottom line with employee recognition


This article appeared in our newsletter The Construction Labor Weekly.

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It’s been called the most significant uncalculated expense in North America.

We’re talking about turnover and its impact on projects.

Turnover can reduce a construction project’s profits by 29%. This is based on a data from the Business Roundtable.

It’s a huge problem in construction with the average company dealing with 57% turnover in 2021.

This week we’re going to look at exactly how to reduce turnover by focusing on employee recognition.

Unfortunately, too many companies ignore turnover until it’s too late.

Those companies waste money trying to keep their project on track.

In this article we walk you through three steps for a dramatic impact on reducing turnover.


Turnover is a management problem

Turnover is the unfortunate result of poorly run site.

It’s even worse than that – high turnover is an indictment of project’s management team.

Data from the Business Roundtable shows 3 of the top 4 reasons for turnover on a construction site are supervision and management.

If you have a turnover problem, then you also have a management problem.

If you’re struggling with turnover on the jobsite, it’s time to re-evaluate the management team. From the top person through the foremen – there’s a disconnect between management and craft labor.


Step 1: Recognition needs to be honest, authentic, and personal

Done right, recognition is honest, authentic, and personal.

This is not about big awards lunches. It’s not about giveaways. It’s about one on one feedback that comes from a place of sincere appreciation.

People want to feed like they are a critical part of a team. And they want to feel like people notice.

That’s why these three components of effective recognition are critical.

  • Honest recognition is about noticing specific events. Find the silver lining in a work task, a workday, or a work week. It can be small, but it must be specific.
  • Authentic recognition is real. It means as the person delivering recognition you must wholeheartedly believe that the person deserves the recognition.
  • Personal recognition means the recognition is targeting a person or small group. Broad based recognition of large groups of people doesn’t work. That’s why large lunches with sweeping, generalized statements of appreciation aren’t as impactful as a one-on-one discussion.


Step 2: Establish a feedback system for employees

A site leadership team can’t catch everything that goes right. That’s why a feedback system is crucial.

There are two goals of a feedback system.

  1. Let employees recognize each other. Ask employees to identify fellow employees for recognition. Have them include the specific task or action.
  2. Let employees recognize themselves. Ask employees to identify something they individually do that isn’t appreciated by their boss. This is a gold mine for future recognition.

The final step is management follow through. Take these submittals seriously and recognize people for them.


Step #3: Utilize unexpected recognition

Unexpected moments of recognition are effective.

Especially focus on people who are most positively impacted by recognition: the new person, the younger person, the person whose job isn’t typically seen as critical.

Catch people who don’t expect it, when they least expect it, and by a person high up the totem pole in the management team.