Absenteeism, Turnover

Contractors Working Overtime To Control Problems, Cut Costs

by Karen Schwartz

Turnover and absenteeism are not sweet music to contractors, who continue to work on turning down the volume.

Jeff Johnson, vice president of human resources and risk management of Appleton, Wis.-based The Boldt Co., says the company has a turnover rate less than 3% and an absentee rate that is “negligible.” That compares to an average turnover rate among Midwest contractors in excess of 13%.

“We try to provide steady employment, and over the years our work has increased,” adds Oscar Boldt, chairman. “We anticipate that we’ll do $800 million in construction management, consulting and project development in 2008. That provides plenty of work for our employees.”

advertisement

The Boldt Co. is not alone in the battle.

A 2004 report on absenteeism, the Tripartite Study on Absenteeism in Construction, involved the Cincinnati-based Construction Users Roundtable, its contractor-members and the AFL-CIO Building and Construction Trades Department and defined absenteeism as “chronic, unexcused, and excessive absences that adversely affect a construction project.” The study showed that apprentices and younger workers had higher absenteeism than journeymen and older workers; local residents were absent significantly more than nonlocal workers; day-shift workers were absent slightly more than those on other shifts; and projects in urban areas and on overtime had greater absenteeism than others.

Another study, the 2007 Benefit Survey for Contractors on turnover, was conducted by Saline, Mich.-based Personnel Administration Services Inc., an organization that specializes in providing wage, salary and benefit information primarily to construction and engineering firms. Several things were discovered, including that the turnover rate was highest in residential construction (17.1%) and second highest in industrial construction (14.2%).

It also found that estimators showed the highest rate of turnover (6.1%), and those employees with at least a year’s experience for firms with revenues between $25 million and $100 million (16.1%).

Also high was turnover for superintendents for firms with revenues greater than $500 million (15.4%) followed by estimators for firms with revenues between $100 and $250 million (9.1%).

By contractor type, electrical contractors had the highest turnover rate (19.7%), followed by design/building contractors (16.3 %).

“Owners often use excessive overtime to get projects done and there’s a direct correlation between overtime and absenteeism,” says Greg Sizemore, executive vice president of Construction Users Roundtable. “Owners should plan projects so there’s not excessive overtime.”

Less-than-satisfactory working conditions on a jobsite often contribute to turnover, Sizemore says. The cleanliness of the jobsite, adequate restroom facilities and a nice break area all affect turnover, especially when workers have a choice of jobs.

One Contractor’s Efforts

The Boldt Co. is keeping check on the problem at the $60 million science building at St. Olaf College in Northfield, Minn., which is expected to be completed in August.

“We’re working four 10-hour days each week instead of five 10-hour days,” Boldt says. “As a result, [workers] on that job have a three-day instead of a two-day weekend. We’re getting maximum productivity as a result.”

The company also does negotiated contract work instead of straight competitive bidding. “We don’t beat up our subcontractors,” Boldt says. “If subcontractors put in a low bid, they get the job and we don’t tell another contractor who their competition is.”

The firm keeps employees informed about adopting a healthy lifestyle. It sponsors a number of wellness initiatives that include monthly “lunch and learns” programs on topics such as healthy eating, smoking cessation and heart disease; a smoking cessation program that allows employees to be reimbursed for doctors’ visits and medication related to quitting smoking; and voluntary annual health-risk assessments for cholesterol, body fat and other health-related indicators.

Employees who participate in the health assessment and also go for a follow-up consultation receive a $100 discount on their monthly health insurance premiums.

“Our low turnover and absenteeism is a direct result of making our employees our priority as well as the wellness initiatives that we continue to implement,” Johnson says.

What Can Contractors Do?

Solutions have been identified that can help reduce turnover and absenteeism.

The Business Roundtable, Construction Industry Institute of Austin, Texas, and various contractor groups and unions have offered the following ideas for owners and contractors to reduce absenteeism in the industry:

• Treat absenteeism with the same regard as safety violations.
• Insist that contractors minimize the use of excessive overtime, one of the many causes of chronic absenteeism.
• Contractors should commit to the enforcement of absenteeism policies and programs.
• Develop standard language in project labor agreements and collective bargaining agreements for dealing with absenteeism.
• Establish a project policy on absenteeism and consistently enforce it from the start of the project.
• Train superintendents and foremen on the absentee policy.
• Have an overtime policy tied to absenteeism. If craftsmen have unexcused absences during normal working hours, they will not be allowed to work overtime.
• Ensure that unions are thoroughly involved in the enforcement of a contractor’s absentee policies.

SIDEBAR 1

Turnover Rate (by contractor revenue)

Turnover among employees with at least 12 months’ experience at contracting firms averages just shy of 15%.

Click here for next Feature Story >>