Reducing Employee Turnover In A Competitive Job Market

This is the first part of a seven-part article on recruiting and retention strategies.

When it comes to the ever-maddening issue of employee turnover, building service contractors are at the mercy of local, regional and national economies, as well as policy reforms that include immigration, labor law and health care. As a general rule, the better the economy, the more competitive wages are — and the harder it can be for BSCs to hold onto valuable employees who are finding better opportunities in other industries.

“There has always been an inverse relationship between the unemployment rate and the economy,” says Tim Murch, president of 4M Building Solutions, St. Louis. “When unemployment rates are very low like they were in the ‘90s, labor was a big challenge and turnover was much higher. When the economy is struggling and unemployment numbers are up, like they have been with the latest recession, labor is much more available and turnover is minimized.”

With unemployment rates continuing to decrease across much of the United States, labor is again tightening in certain geographical markets, resulting in wage inflation and higher turnover rates, says Murch.

Despite the lowering of the unemployment rate, many BSCs, according to a Contracting Profits survey, report they are managing to hang onto low turnover rates. In fact, the average turnover rate reported is at a staggeringly low 36 percent in an industry that typically averages over 100 percent.