Construction Contractors Offer Unprecedented Compensation Packages Amid Talent Shortage
Despite Recession Fears, Construction Contractors Offer Competitive Pay Packages Despite concerns over an economic recession, construction contractors are offering pay packages that rival those not seen in the industry for almost two decades. In this tight job market, employers are faced with a need to staff their projects, a shortage of available candidates, inflationary pressures, and the potential of a recession. This has led to aggressive salary and bonus offers being made.
Data from compensation consultant Personnel Administration Services shows that in 2021, average base salary raises for construction staff increased to 4.2% from 3.6% in 2020. The firm also predicts that raises will remain at 4.2% in 2022. However, Jeff Robinson, the firm’s President, notes that companies typically underestimate anticipated increases by 0.5%. He predicts that the demand for talent and inflationary pressures could push compensation to 5% heading into next year.
The Personnel Administration Services survey shows that compensation varies by region in the US. In 2021, the northwest reported the highest average increase of 5.3%, followed by New York-New Jersey at 5.1%, western states at 4.9%, and the Rocky Mountain area at 4.8%. The New England states reported an average increase of 3.5%, while Great Lake states reported 3.8%. The survey also showed that project superintendents gained some of the highest compensation increases, averaging 6% nationwide between 2021-22.
Industry recruiters suggest that contractors must be particularly aggressive with compensation packages for new employees in a tight talent market. The US Bureau of Labor Statistics reported in May that there are approximately 1.9 job openings for every unemployed person in the US. James Huddleston, president of ProSearch Intl., an Ohio-based industry recruiter, notes that there are significant shortages in the industry, from professional engineering through site supervision. He adds that top contractors’ quality, stable, long-term employees are now realizing they hold all the cards in terms of interviewing and negotiations. As a result, he says nine out of ten placements he has made result in compensation offers with double-digit increases.
While superintendents tend to see the highest increases, estimators come in at a close second. Huddleston adds that in some cases, estimators and administrative employees who do not have to consistently be on a job site can work remotely. This flexible schedule is appealing to work-life balance, according to Huddleston. Jim Vockley, president of Adams Consulting Group, which specializes in AEC sector recruiting, adds that younger candidates see work-life balance as a potentially equal or larger draw than compensation. Firms that land top candidates often do not provide the highest salary offer, but focus on their benefits package, such as medical coverage and maternity leave, to show how well they take care of their employees.
In conclusion, despite fears of a recession, construction contractors are offering competitive pay packages to attract and retain staff in this tight job market. Project superintendents and estimators tend to receive the highest increases. While compensation is essential, contractors also need to consider offering flexible schedules and attractive benefits packages to retain quality staff.