Spring 2004

Construction Advisor

Employer-Specific Benchmarks for Construction Companies

There are certain key employer-specific benchmarks that construction contractors should consider. These include the following:

Programs to Attract and Retain Qualified Employees

There should be formal programs in place to attract, recruit, hire and retain qualified workers.

The plans should address:

1. Competitive and meaningful pay and benefits;
2. Job security;
3. Safety and healthy work environment;
4. Fair and consistent treatment by immediate supervisor;
5. Good working conditions.

Included in the compensation area there should be a formal incentive and reward program that is understandable. It should be revised annually and adjusted for the changing working and economic conditions.

The company should monitor and document rates of retention by project and company. Statistics show that for every 10% turnover on projects, a 2.5% increase in payroll and related costs occur.

Formal employee performance evaluations should be conducted annually. These should include recognition of positive performance, identifying areas that need improvement and consideration of career path progression.

Exit interviews should be implemented for employees who voluntarily quit. Identifying patterns and corrective actions necessary will help slow down employee turnover.

Training-Specific Programs for Employees

Companies should support training of all employees.

The financial benchmark is 3.0% - 5.0% of payroll.

The company should conduct a formal training needs analysis on an annual basis to determine proper areas to address.

Rewards should exist to recognize successful completion of training.

Specific skill certifications are important to identify. The National Center for Construction and Education Research has skill certification programs for construction craft workers.

By addressing these employee needs, the construction contractor can reduce turnover and increase efficiency which will lead to more profitable projects.

The Construction Advisor is produced quarterly by Bober, Markey, Fedorovich & Company's Construction Team. If you would like additional information about the services that we can provide to construction companies and contractors, please call or email our team leader, Dale A. Ruther, CPA, CIT at (330) 762-9785 or dale@bobermarkey.com.

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