Why Construction Workers Want Yearly Raises (And How To Manage Them)

Story by Gemma Beasley / July 26, 2024

If you’ve been tracking the pulse of the construction industry lately, you’ve likely noticed that wage discussions are all the rage. The workforce, from fresh-faced apprentices to seasoned project managers, are laying down a new foundation – one of rising salary expectations.

And this isn’t just a passing trend. It’s a structural shift in how the industry values its most critical asset – skilled labor.

So why are construction workers increasingly eyeing that annual bump in pay? Let’s break it down:

1. Inflation Isn’t Just a Wall Street Worry

As the cost of living climbs faster than a skilled crane operator, workers are feeling the pinch. The lunch truck sandwich that cost $8 last year now sets you back $10. It’s simple math – static salaries mean shrinking purchasing power. According to the Federal Planning Bureau, the Consumer Price Index is forecasted to rise 3.2% in 2024, outpacing many workers’ pay increases.

For construction professionals, who often work long hours in physically demanding conditions, maintaining quality of life is paramount to achieving the payoff they expect for this hard work.

2. Skills Are Like Fine Wine

With each passing year, construction professionals aren’t just getting older; they’re getting better. New tech, updated safety protocols, and evolving best practices mean today’s worker is more valuable than yesterday’s. The construction industry is rapidly evolving, with innovations like Building Information Modeling (BIM), drone surveying, and sustainable building practices becoming standard.

Workers who keep pace with these advancements rightfully expect their compensation to reflect their enhanced skill set.

3. The Great Exodus is Real

Remember that ZipRecruiter analysis showing a 40% drop in online construction job applications? Or the National Association of Home Builders reporting that 85% of builders expect to face serious challenges regarding labor availability? These labor shortages aren’t simply going to resolve themselves.

skilled construction workers know their worth in a market starved for talent – with this scarcity giving leverage to negotiate better pay, knowing that replacing them is both difficult and expensive.

4. Keeping Up with the Joneses (or the Tech Bros)

As other industries flaunt their fancy perks and climbing salaries, construction workers are peeking over the fence. They’re not asking for ping pong tables, but they do want their slice of the economic pie.

With the median tech industry salary hovering around $104,000 according to the CompTIA Tech Jobs Report, construction workers are acutely aware of the earning potential in other sectors. While the nature of the work differs, its inherent value does not. Regardless of industry or job title – workers project a universal desire to receive competitive compensation.

So, how do you implement a salary raise strategy that doesn’t send your budget into the red? Here’s a quick guide to laying the right foundations for your firm.

1. Implement a clear, performance-based evaluation system. When workers can see the path to getting what they want, they’re more likely to climb it – delivering greater value as they go. Consider using a points-based system that rewards factors like safety compliance, project completion times, and client satisfaction.

2. Align raises with project completions or fiscal year-ends. This creates natural milestones and helps with budgeting, allowing you to tie increases to tangible achievements, making the raises feel “earned” and less like something everyone’s entitled to.

3. Sometimes, it’s not all about cold, hard cash. Consider offering additional paid time off, improved health benefits, or professional development opportunities. A study by the Society for Human Resource Management found that 92% of employees consider benefits as important to their overall job satisfaction.

4. Transparency about company performance can help employees understand when raises are feasible and when they might need to tighten their tool belts. Share key financial metrics and industry benchmarks to give context to your compensation decisions.

5. Tie raises to new certifications or mastered skills. This incentivizes growth and directly links increased pay to increased value. Create a clear pathway for advancement, showing how acquiring specific skills or certifications translates to higher pay grades.

The Payoff of Proactivity

Remember, implementing a solid raise strategy isn’t just about appeasing your workforce. It’s about building solid foundations for your firm’s long-term success.

A well-compensated team is more likely to stick around, reducing the costly cycle of hiring and training. The Center for American Progress estimates that replacing a skilled worker can cost up to 213% of their annual salary.

So by formalizing your raise structure, you’re not just keeping pace – you’re cementing your position as an industry leader. Done right, this approach also boosts your employer brand, making it easier to attract top talent in this hugely competitive market.

Building the Future, One Raise at a Time

At Hudson Cooper Search, our experience can help you craft a compensation strategy that attracts new talent and keeps your current crew reaching for their hard hats, not browsing job boards. We understand the nuances of the construction labor market and can help you strike the right balance between competitive pay and financial sustainability.

Want to know your annual raises are meeting market expectations? Get in touch for a free consultation.

Categories: Leadership Insights

Tags: construction, construction workforce, Leadership