11 Strategies to Reduce Employee Turnover in the Trades

If you feel like you're constantly sifting through applications and interviewing candidates, only to have them quit a few months later, you're not alone. Lowering employee turnover is a challenge for many companies, but it’s especially difficult in construction, manufacturing, and other skilled trades.

These blue-collar industries often suffer from high employee turnover rates due to the nature of the work — it's demanding, dangerous and difficult. It's just a different animal than other industries. And most human resources departments are geared towards office workers, so they're not always equipped to deal with the specific challenges of recruiting and retaining employees in the trades.

If you're done throwing good money away every time a new employee quits, it's time to take action. In this article we'll look at the latest 2022 retention reports from Work Institute, and offer the best strategies to help you dramatically reduce employee turnovers in your skilled trades business.

2022 Employee Retention Statistics

Work Institute's latest annual report on employee retention shows the last two years have been rough in all industries. The workforce has been incredibly unstable, and every business is trying to adapt to the Great Resignation. This is clearly reflected in the statistics:

• In 2021, the number of employees voluntarily quitting reached a new record high, exceeding the previous recorded high from 2019 by 13%
• There are more job openings than unemployed people. There were 0.8 unemployed people per job opening in December 2020, which then plummeted 25% to 0.6 by December 2021
• The labor force grew by about 3 million workers from February 2021 to January 2022. But the number of unemployed people seeking work fell by close to a million during that same time period.

Contrary to what many think, potential employees are not sitting idly by waiting for companies to hire them. The people who want to work are currently employed and actively looking for better employment.

That should be a big indicator to employers that they need to focus on strategies to keep their best employees from leaving. To stay competitive, employers in construction, manufacturing and the home services must take aggressive action to secure and retain top talent.

The battle for talent is raging with more than 10 million open jobs. But hiring isn't where the buck should stop. If you hire people, but the job satisfaction isn't there, employees leave. And then you're back to square one.

To overcome this challenge and keep your best employees on board, you need to understand why people are leaving in the first place.

Main Causes of Employee Turnover in the Skilled Trades

When you're looking to improve employee retention, you might immediately think pay is the number one motivator. This is a common mistake. In fact, the 2022 retention report shows that less than 10% of employees left their company because of the money.

This is an especially important consideration because of the nature of the work in the skilled trades.

Yes, it's lucrative, but at what cost to an employee's health, safety, relationships and overall well-being?

So, if it's not money, what is causing all this turnover?

In 2021, 69% of employee turnover was for preventable reasons including:

• Opportunities to move up within a company
• Healthy work-life balance
• Managers who are more professional

And nearly 48% of all job-related reasons for leaving were because of a stressful workload. When supply chain issues and open positions are left unfilled, it puts a lot of pressure on the employees who are left to pick up the slack.

Competitive pay might be attractive for new employees, but that quickly loses its allure if the job itself isn't filling other needs.

While you can't control every aspect of the job, the supply chain, or other problems in the market, you can give employees the tools they need to succeed. And you can create a positive work environment that sets your company apart from others in the industry, which reduces your employee turnover rate.

It's important to take a critical look at your company culture and how you're managing your teams. Once you know what's causing people to leave, you can start to put strategies in place to address those issues.

The Cost of Employee Turnover

When an employee leaves, it costs the company approximately 33% of their annual salary, according to Work Institute's research. So the average cost of employee turnover in the US is roughly $15,000. This figure could look much higher in the trades because skilled work tends to pay better than the average job.

So where does your company bleed money when it comes to the cost of turnover? Here’s a breakdown:

Hiring Costs:

• Advertising for job openings
• Administrative tasks related to recruiting and hiring
• Interviews
• Qualification tests and background checks
• Relocation expenses

Training Costs:

• Onboarding and orientation expenses
• Training materials and equipment
• Supervision expenses during training

Decreased Productivity:

• Performance or skills gap
• Expensive quality-of-work mistakes
• Interruption of workflows

Separation Costs:

• Administrative tasks related to ending employment
• Potential legal problems
• Severance pay
• Unemployment tax

Other Costs:

• Less productivity because of morale problems
• Lost business due to decreased customer satisfaction
• Loss of institutional knowledge

The Impact of Employee Retention on Company Culture

Costs can add up fast if you have a high turnover rate, but the financial impact is just the tip of the iceberg. When employees leave, it can have a negative effect on company culture.

Company culture has been a hot topic in the trades for the past few years. A gruff environment and the “tough it out" mindset are a thing of the past. Employees, especially Millennials (which currently make up 35% of the workforce), are looking for companies that respect them and share their values.

Today's tradesmen and women want to work for companies that care about their safety, offer training and development opportunities, and provide a good work-life balance.

This can be hard to achieve in an industry that's known for long hours and dangerous working conditions. But it's not impossible.

Let's explore some strategies that will help you create a company culture that attracts and retains the best employees.

Strategies to Reduce Employee Turnovers

We've already discussed the primary causes of employee turnover, and thankfully many of them are preventable. If you want to reduce your  employee turnover rate, here are 11 ideas for employee retention to consider:

1. A streamlined hiring process

The beginning of the relationship sets the tone for the entire employment journey. If those first few interactions are full of confusion, miscommunications and inconsistency, it's likely that the employee will start looking for other opportunities.

Team Engine's software helps you streamline your hiring and onboarding process so that everything is consistent, professional, and automated. This allows you to worry less about the administrative tasks and focus on finding the right fit for your company.

2. Hire the right employees

It sounds simple, but it's one of the most important things you can do to reduce turnover. Take the time to really pre-qualify candidates.

Team Engine's candidate sourcing filters make this process easier by automatically weeding out applicants that don't meet your needs. There’s no need for you to shuffle through dozens of applications by hand to see who might fit the role… When you receive a stack of candidates in Team Engine, you can bet that all the aces are on top.

3. Regular check-ins

Whether the employee is new or tenured, regular check-ins are essential to reducing turnover. These can be done informally or with formal performance reviews. Either way, employees should feel like their voices are being heard and you’re supporting them in meeting shared goals.

4. Clear career path and development opportunities

When employees feel like they're stuck in a dead-end job, they start looking for other opportunities. Employee engagement will increase when they know what the next step is in their career path.

5. Enticing Benefits

Offering a competitive salary is important, but unique benefits are what will really set you apart from other companies.

Remote work opportunities during the pandemic have shown that employees value work-life balance. So flexible schedules, independent work environments, the ability to dispatch from home — these are all things that can make your company more attractive.

6. Adequate training

One of the quickest ways to turn off an employee is to throw them into the deep end without proper training. And in the trades, where safety is always a top concern, this can be a recipe for disaster.

7. The right equipment

In the skilled trades, having the right tools is essential to getting the job done safely and efficiently. If your employees are constantly having to work with outdated or broken equipment, it's going to impact their morale, productivity and the quality of work.

8. Realistic expectations

Employee's expectations should be in line with what the job actually entails. If you set the bar too high, they're going to get frustrated and burned out. If you set it too low, they're going to get bored.

Accurate job descriptions, goal setting and performance reviews can help keep everyone on the same page.

9. A manageable workload

Overworked employees are stressed out, exhausted, and more likely to make mistakes. This can lead to safety risks, low employee morale, production issues and poor quality work.

If you run night shifts or offer 24/7 emergency services, make sure you have the staff to support it. This means always having candidates in your pipeline and overhiring so you're never short-staffed.

10. Recognize and reward employees

Recognizing employees for a job well done is a great way to make them feel valued. Employee appreciation programs, bonus structures, and acknowledgement in company-wide communications are all great ways to show your employees that you're grateful for their loyalty and dedication to the company and your customers.

11. Exit Interviews

You won't keep everyone, but you can learn from those who leave. Exit interviews are a great way to get employee feedback and use it to inform your strategies for reducing turnover.

These are all factors that employers have a lot of control over. If you want to reduce employee turnover, plug the leaks in your system and implement some of these strategies.

Looking for a software solution to help with recruiting, hiring, onboarding and retention? Team Engine is designed to simplify the stress for you and impress today's job seekers in manufacturing, construction, the home services and more! Start your risk-free, 30-day trial today!