Today, every company needs a Recognition and Rewards (R&R) solution in their tech stack, especially contracting firms with large workforces. 

After reading this article, you’ll understand why the contracting labor market is struggling to find new workers and what can employee recognition tech do to change the status quo. 

Let’s start with the former. 

Construction has a Merciless Labor Market 

As we all know, construction companies are struggling to fill their ranks with skilled professionals and the industry is suffering because of it. After all, the industry can’t grow if it can’t take up more demanding projects. 

According to data from the Construction Association of America, 80% of contractors report having difficulty with finding qualified craft workers to hire. 

However, it’s not just about the lack of skilled hands available for hire, but rather, the overlapping of several major challenges that made things more difficult for contractors. 

The first one is the demographic trend of seasoned professionals exiting the labor market as they retire, which leaves a significant gap in the industry. 

Despite the growth of the US construction sector, approximately 41% of the current workforce, which includes employees working in managerial and support roles, will retire by 2031, according to the National Center for Construction Education & Research. 

Unfortunately, this is only the tip of the iceberg. 

Employees who are about to retire are also leaving behind a skills gap which will additionally limit the capabilities of the current workforce. Bear in mind, seasoned professionals have invaluable knowledge and skills they’ve accumulated over their careers. 

When they leave, so will their skills. 

The already dire position of construction firms will get worse before it gets better. 

CITB published a report that found that in 2021, over 34% of employers in construction had a skills gap, which is a 14% increase compared to 2018 and 20% in 2016. 

As more employees retire, the skills gap will be greater. 

It’s important to note that the demands of the modern construction industry include sustainable and energy-efficient building practices that require workers with knowledge of green building technologies and methods. 

Without knowledge transfer, the construction industry will fall short.

A change has to happen. 

The construction industry has to embrace new people-centered practices to attract employees, create a general demand for working in construction, and enable an inter-generational skill transfer so that the new generation of workers can hone the skills the industry needs to grow. 

Employee recognition technology will play a major role in solving complex workforce challenges. 

How Recognition Technology Transforms Construction Companies

1. Attract Qualified Craft Workers and Contractors

Employee recognition technology is a viable solution for attracting new talent. 

In an era where contracting companies are fighting over talent, employer reputation is everything. Contracting companies that have a reputation of recognition-centered, appreciative employers stand to attract more talent than their counterparts.

Glassdoor surveyed jobseekers to investigate the impact of poor reputation on hiring. They found that a whopping 86% of job seekers wouldn’t accept a job offer if the potential company has a bad reputation on their site. 

Make no mistake, every skilled laborer will research their potential employer.

Company reputation can likely be the tie-breaker between two different contractors trying to hire the same candidate. Besides spotless employer reputation, referrals are also a critical foothold for hiring in the construction sector.

According to one national recruiter survey, as many as 78% of recruiters agree employee referrals are the best method of attracting new hires. The survey also found that employee referrals have the highest conversion-to-hire rate, more than career sites and online job boards. 

In other words, one of the best ways of attracting new talent is by recognizing the talent you already have in your organization. 

Peers talk. 

When employees feel valued, will share their company experiences with other qualified craft workers in their social network. By doing so, they become a powerful factor in talent attraction. 

The shift from being an employee to being a net recruiter for the company doesn’t happen without making employee recognition a centerpiece of company culture. 

2. Enhance Employee Behavior 

Paying attention to employee behavior is critical in the construction industry. 

The attitudes and actions of employees on the job can either turn construction sites into management nightmares, or role models for workplaces. 

By providing an efficient, tech-powered way for site managers and HR to recognize model behavior, construction companies can incentivize employees to improve their everyday behavior and snowball small changes into big gains. 

Management gets safer and more effective construction sites, and employees get more recognition for their efforts to keep themselves safe. They actively contribute to a culture of safety. 

It’s a double win. 

But let’s take a closer look at this argument. 

We can all agree that construction is hard work. Employees have to be skilled and physically capable of pulling off an 8-hour shift of intense labor. They have to coordinate and communicate constantly with their colleagues, and the way they approach it has a tremendous impact on the entire team or department. 

From a cultural aspect, positive workplace behavior, such as giving peer recognition or going the extra mile to help a co-worker, makes stronger and better connected teams. 

For construction in particular, employee behavior becomes even more important in the context of employee safety. 

In 2019, 1,066 construction workers had a fatal injury on the job in the United States alone, accounting for 21.1% of all worker fatalities in the private sector, according to data from the U.S. Bureau of Labor Statistics. 

As seasoned construction executives and managers know, technology can profoundly influence employee behavior, especially when it comes to adhering to safety practices and protocols. In terms of recognition, it empowers site managers and superintendents to recognize employees who are ensuring that they and their colleagues are following the necessary regulations to stay safe. 

In 2019, there were approximately 200 000 non-fatal injuries and illnesses among U.S. construction workers. Injuries on construction sites can happen in a blink of an eye. While many contractors have safety training and amazing safety tools available, recognition tech gives another powerful platform to reinforce impactful behavior. Employees can become more aware of workforce safety and see it as a cultural imperative. 

3. Recognize Dynamic Teams 

While the term dynamic team is somewhat novel, construction companies have been relying on dynamic teams since the dawn of the industry. 

A dynamic team is a model for organizing work that relies on having employees with different skills grouped together so that they can complete specific projects in a set time frame. 

Once the project is completed, the team disbands, and the process is reset. 

Hence the term dynamic. 

This organizational model is in stark opposition to the traditional team-department structure, where all the employees have approximately the same skills, complete the same type of project every time and never disband. 

It’s important to observe the rise of dynamic teams in tandem with another powerful trend; the fact that work is becoming increasingly more cross-functional. 

According to stats revealed at Deloitte’s Future of Work event, 63% of current work being performed falls outside of the job description and 81% of employees claim work is increasingly performed across functional boundaries. Dynamic teams are foundational for contracting firms. 

A report from the Construction Industry Institute found that the integration of multidisciplinary teams, that bring together employees of different backgrounds and expertise is better suited for solving complex challenges of construction projects. 

One more survey published by the National Institute of Standards and Technology found that the most successful construction projects relied on collaborative teams that have worked together throughout the entire project lifecycle. What made these teams successful was their ability to identify potential project problems and hazards early on, which ultimately resulted in fewer changes, delays, and overall more quality in delivery. 

In the context of recognition, contracting companies need technology that enables them to form dynamic teams in their HCM system and maintain all the recognition practices that are central to company culture-shaping. When members of dynamic teams can send and receive virtual recognition just like any standard team, they become more included in the company’s recognition-centered practice and reap all of its benefits. 

Understanding how to reward dynamic teams is a competitive advantage in construction.  

4. Bring New Human Capital Practices into the Company

Historically, construction companies have been known for slow progress when adopting new technologies, but things are changing.

It’s no secret that successful construction company management relies on using digital tools to track and manage assets, to save on inventory maintenance and project costs. 

JBKnowledge surveyed over 3000 contractors on construction tech solutions, staffing, and budget matters. The survey states that 43.4% of construction professionals reported using some form of asset-tracking technology, with GPS tracking being the most common method. 

The survey also noted that larger construction companies are more likely to adopt new tech than their smaller counterparts. 

In recent years, there has been a substantial movement in developing more mature human capital practices to tackle turnover rates, workforce development, and digitalization in the construction industry. 

Technology plays a central role in solving complex workforce challenges. For instance, tech-savvy contracting firms use data analytics to identify skill gaps, track performance and provide targeted development opportunities. 

By adding R&R technology into the current tech stack, the company is bravely paving the way for new human capital practices that help advance digitalization, so that companies can recognize on-site workers digitally.

Recognition and Rewards solutions represent the third generation of HR tech.

HR 3.0 is a people and culture system addressing the needs of individuals and teams through shared values and culture. 

It’s oriented towards employees and developing their skills so that the workforce becomes more resilient to changes and disruption. By adopting R&R tech, a construction company can expand its current HR 2.0 that focuses on employee lifecycle operations, and bring the best out of its workers.

5. Create a Positive Culture 

Culture is the driving engine behind company success, and construction firms are certainly no exception. The impact of culture on productivity and engagement has been widely researched by organizational psychologists. 

One survey found that the overwhelming majority of business leaders (86%) believe culture has a powerful impact on productivity. 

In today’s day and age, it’s impossible to deny its importance. 

When the culture surrounding the workforce is fantastic, every employee will feel like a part of a greater whole. Regardless of how hard construction work can be, employees can find meaning and value in their contribution and understand how it connects to the bigger picture. 

With employee recognition tech, companies can track the direct impact of their company culture on workforce productivity. This helps managers and HR get an analytical perspective into the values and attitudes that fuel fantastic results. More importantly, they can pinpoint which aspects of their culture bring out the best in their employees and magnify them. 

A culture that values communication and employee feedback helps to create a sense of trust and collaboration, which is crucial at productive construction sites and on-the-spot problem-solving. 

On the other side of the spectrum, HR can identify what is lacking in the current culture and incite change.

Every experienced line manager or HR professional knows that negative culture is contagious, and increases employee absenteeism, burnout, and stress in an already stressful work environment. For instance, HR can notice that there is little or no peer recognition present among teams, which is a symptom of a disconnected workforce. 

Then, HR can create cultural incentives to encourage employees to recognize each other’s efforts and foster a sense of teamwork. 

How our Solution Changed the Game 

Now that you understand how employee recognition tech shapes the workforce of the construction industry, let’s take a moment to talk about how our flagship employee R&R solution JobPts reshaped the culture of real estate investment trust.

SUN Communities operates across 350 locations in the US and Canada, has over 4000 team members, and relies on a centralized HR support system to carry out HCM operations. 

The company has a mixed workforce comprising of contractors, seasonal employees, and office-bound employees that provide logistical support.

The challenge was to increase dropping employee engagement using a mobile-friendly employee R&R platform and impact company culture. The R&R platform had to be customizable and include custom-branded features. A critical goal was to give employees a platform where they could send and receive recognition from their peers and managers, and be rewarded with reward points that can be redeemed for valuable items. SUN Communities is an SAP SuccessFactors user, meaning their R&R solution had to be successfully integrated with that HCM. 

The custom R&R platform with SUN Communities branding went live in only 90 days and delivered cultural impact in just a few months. For instance, SUN Community’s Glassdoor rating increased from 2.9 to 4.3, which is a drastic change in employee satisfaction at their jobs. It’s well-understood how much Glassdoor ratings impact the employer brand and desirability of employment. The elimination of markups on items in the reward catalog led to $76 000 in savings within the first 3 months from the go-live. 

As a unique SAP SuccessFactors user, SUN Communities needed an expert in R&R tech to lead change management and help reimagine the company culture. 

Thanks to JobPts, SUN Communities was able to deliver a tailored Recognition and Rewards experience to its employees and empower them to recognize each other and redeem their reward points in a plethora of ways. 

This resulted in a 175% increase in employee engagement.

The full case study is available here.

If you want to understand more about the impact of employee experience on workforce results and the business bottom line, the best way to start is to download our whitepaper. 

Conclusion 

Despite record-breaking disruption across the economic board, almost all industries are struggling to fill their empty positions. 

The construction sector remains one of the most competitive talent markets. 

Hiring up-coming craft workers and contractors will become even more difficult as seasoned professionals retire in the next 5 to 10 years and contracting firms become unable to take up more demanding projects. 

It’s time to consider that construction companies can’t do without employee recognition tech by their side and introduce new practices that will attract and keep talent.