Ease financial hardships by securing your workforce

Building a positive culture can assist with retention

When the U.S. economy rides high, so does the construction and real estate sector. But as the wave comes crashing back down, construction sites and real estate offices often are among the first places to go quiet.

Now, leaders in these industries worry that their business will soon be derailed once more — this time by high interest rates, skittish investors and changes to real estate demand patterns that were sharply accelerated by the pandemic.

“It’s a difficult time as the sector faces some uncertain headwinds, and I think everyone is moving forward with a very cautious approach,” said Grant Thornton National Managing Partner for Real Estate and Construction Greg Ross.

Some issues are unavoidable. The Federal Reserve has sharply raised interest rates to cool inflation — resulting in much tighter financing and tougher deals for real estate projects, whether it’s high-rise offices, data centers or residential buildings.

“Transactions have stalled,” Ross said. “We’re headed for a period of uncertainty that could create a lot of impact on the sector.”

Of course, those growing risks call for a range of new financial strategies. But businesses can also take this moment of relative calm before the anticipated storm to secure one key resource: their workforce.

Time for a new approach

Employees of construction and real estate bring unique strengths, motivations and concerns for employers, according to Grant Thornton’s recent State of Work in America Survey for 2023.

They tend to feel more connected to the organization than workers in other sectors. They are highly motivated by development and training opportunities, and generally are more satisfied with their work than others. But they also are more likely to switch companies, especially in pursuit of more pay and advancement.

Understanding those factors could keep teams engaged and productive – even when revenues are tight and the future is uncertain.

“There’s an expectation to continue to meet employees’ compensation expectations, regardless of the changes happening in the industry. And maybe when times are tough, it might be important to deliver at a higher level,” Ross explained. “If companies can’t compensate what employees are asking for, then it’s going to require more communication, more of a team environment, more of a positive culture to retain them.”

Ross said that while the financial constraints that companies face in months to come will continue to be a priority, real estate and construction leaders will need to understand the human side of leadership in the years ahead, too.

“Sometimes it’s not just the dollar bill. If people are leaving over money, then you have to motivate them to stay for other reasons,” he said. “If you take care of them, encourage them and inspire them — then it becomes a matter of teamwork and loyalty. And that’s what will keep them around.”

Manage the intangibles

Grant Thornton Talent & Culture Advisory Director Kim Jacoby saw warning signs, but also some opportunities, for construction and real estate companies based on the State of Work survey data.

“It feels like the industry’s doing all the right things for employees. Although employees are experiencing burnout, primarily caused by mental and emotional stress, long hours and job insecurity, they feel supported by their organization. They don’t feel like they are in it alone,” she said.

But at the same time, Jacoby added, “I’d be worried about the tendency of their employees to switch jobs. You have more than two-thirds of your workforce saying they’re actively looking for a new job, despite the fact that they switched jobs in the past year.”

That kind of job-hopping may continue even as the industry’s economic outlook quivers. “I want to do what’s best for me. I want to learn and develop. I want new opportunities. I want to make more money,” she said of the mentality illustrated by the survey results, which she says is especially common among younger generations.

Yet employers can turn that risk into an opportunity, Jacoby said — and they don’t necessarily need to lay out major spending on raises and benefits. Instead, they can channel real estate and construction employees’ outsized appetite for advancement and development opportunities.

“Regardless of what’s happening within an industry, focusing on improving the employee experience is going to drive employee engagement and retention. One way to do that is to focus on providing employees with opportunities for training and development, as well as career advancement,” she said.

Doing so starts with understanding the wants and needs of the workforce.

That includes informal conversations between employees and managers. Leaders also should think about larger efforts, such as listening tours, informal meet and greets, and regular surveys of employees.

Across those formats, company leaders can ask about:

• Employees’ short- and long-term goals
• Their feelings about the company’s culture and their overall workplace experience
• Their understanding of the company’s mission, vision and values
• Their thoughts and preferences regarding in-person, hybrid and remote work settings
• Their perception of their advancement opportunities, along with their hopes, plans and concerns about their career paths
• Their thoughts about their managers and the communication they receive

Finally, those surveys can focus on understanding the benefits and rewards employees value, asking them to prioritize their preferences.

“Which benefits are most important to employees? Are there benefits they would be willing to trade for something different?” Jacoby asked.

Of course, the company can’t always meet workers’ demands, especially as budgets tighten. But leaders still can respond with lower-cost options, such as:

• Cross-rotational opportunities, which contribute to employee satisfaction by offering them new paths for advancement and learning
• External educational engagements such as industry-specific conferences that provide employees opportunities to interact with peers within their industry

The goal, Jacoby said, is to develop a workforce that speaks highly of the company; wants to stay with the company; and is willing to make an extra effort to drive the organization’s success.

“When these items are aligned, we see high employee engagement in an organization,” she explained. And with high engagement, a company stands a better chance of retaining the key employees it needs through tough times.

For his part, Ross urged leaders to communicate honestly about the challenges ahead — and to explain the plans that will see the company safely to the other side. Failing to do that, he warned, would leave key staffers feeling excluded and ignored just when they’re needed most.

“When economic forecasts are daunting, it’s easy to get lost in them,” he said. “But leaders need to know they still need to meet expectations and deliver quality, and to do that, they need one of their most critical assets — their workforce — behind them.”