Roles and Responsibilities of HR in a Construction Company
Human resources isn’t only for office workers. It’s just as important to the men and women in the construction industry who build the homes, high rises, and highways we depend on. The success of every construction project depends on the workers and managers who complete it, so the department in charge of that workforce—HR—plays a vital role.
However, human resource management in construction projects has its share of unique challenges. Implementing, keeping track of, and enforcing human resources policies can sometimes be more complicated than in other industries. In this article, you’ll learn about the critical roles and responsibilities of HR in construction companies, and we’ll explain successful HR strategies for construction companies that can help your firm overcome common HR challenges and gain a competitive edge.
What Are the Responsibilities of Human Resources Management in Construction?
In any industry, human resources management includes all of the steps required to hire and manage people within an organization. While many basic HR roles and responsibilities in construction are similar to those in other industries, the way human resources fulfills those responsibilities can sometimes be different. Here’s a quick rundown:
- Forecasting—Since construction is often project-based, the duties and responsibilities of the HR manager include collaborating with construction managers, project managers, contractors, and others to identify and document each project’s roles and responsibilities, as well as detail the end-to-end processes required on a project (or series of projects) to determine labor needs.
- Hiring—For each project, HR professionals seek and recruit qualified, experienced applicants with the necessary skills. Because construction work includes many specialized jobs, the talent pool for such jobs may be quite small. Many large projects or projects subsidized by the government are required to hire union labor or pay non-union workers union wages.
- Training—HR departments ensure that employees are properly trained and licensed to perform the required tasks, use the necessary equipment, and meet any unique requirements of their construction projects.
- Compensation and benefits plans—HR helps their organization offer competitive pay and benefits. For example, HR can research and recommend healthcare plans, which are especially important to construction workers whose livelihood depends on their health.
- Worker safety—Worker safety is a key concern in construction because accidents and injuries are so common. HR needs to make sure their company has all appropriate safety precautions in place and that workers follow them.
- Employee retention—Losing skilled workers in the middle of a project can leave a construction company unable to meet its project completion deadline. HR can develop incentives to keep them working until the project is finished and help them want to stay with the company for future projects.
- Compliance—HR professionals must stay up to date on the myriad safety regulations that apply to the construction industry and keep their organizations in compliance.
We’ll talk more about strategies that can help you ace the duties and responsibilities of an HR manager in a moment.
Importance of Human Resources Management in Construction Projects
Although the recent U.S. construction boom that followed the Great Recession may have slowed down, demand for new construction remains robust and the size of the construction workforce is enormous. The U.S. Bureau of Labor Statistics reported that 11.3 million people in the U.S. worked in the construction industry in 2019. That’s over three percent of the U.S. population—and a lot of employees for human resources departments in construction to oversee. To accomplish this essential task successfully, HR must overcome a variety of challenges:
The construction industry requires people with unique skill sets that are often in short supply. For example, companies may have a hard time recruiting management-level estimators, project managers, engineers, and administrative staff with the training to process construction-specific documents. Experienced craftsmen needed to head project field teams can also be scarce. No wonder a survey by the Associated General Contractors of America found that 80 percent of construction firms have difficulty finding enough skilled workers.
Complicating things further, construction companies usually only hire workers after securing a project contract. That means HR professionals are under pressure to search a thin talent pool for the right applicants in a short period of time. As they do, they compete against other construction companies in the area for the same talent.
After finding the right professionals for the job, the HR department is responsible for ensuring they are properly trained. In addition to providing initial training during onboarding, human resources needs to identify and oversee ongoing training needs, including equipment skills, work techniques for specialized tasks, and certifications. Bonus: besides being necessary for the project, such training amounts to development opportunities that are welcomed by workers.
Worker safety is a constant concern in the construction business and is one of the foremost duties and responsibilities of an HR manager and their team. Work may sometimes involve hazardous surroundings or using equipment capable of causing injury or death. Keeping everyone safe on the job goes hand in hand with proper training procedures that include an appropriate emphasis on safety.
Protecting your workers is not only the right thing to do—it can also help prevent financial disaster. Companies who neglect to take important safety precautions could be at risk for staggering expenses. Direct and indirect costs from workplace accidents may include:
- Medical expenses
- Rising workers’ compensation insurance premiums
- Lost productivity as an injured worker recovers
- The cost of finding and training substitute workers
- The possibility of lawsuits from injured parties
- Damage to the construction firm’s reputation
Employee and Independent Contractor Retention
Since a limited talent pool and skills shortages make finding qualified construction workers so challenging, keeping the skilled workers you do hire is especially important. Unfortunately, since construction hiring usually operates on a project-by-project basis, employee and independent contractor retention can be a greater challenge for HR than in other industries.
For example, a skilled worker may choose employment contracts for several different companies’ projects one after the other, rather than staying with a single employer for an extended period of time. In 2017, the turnover rate for the construction industry came in at 21.4 percent. That’s one in five construction workers changing jobs.
Another challenge for human resource management in construction projects is a workforce that tends to be diverse in significant ways. To begin with, a project can bring together individuals in a wide variety of different roles, from less-skilled workers to highly specialized professionals and administrative employees. Also, construction companies often hire workers from foreign countries or different ethnic backgrounds, which means HR must be able to address language and cultural barriers. Age is a consideration too, with younger and older workers often having different outlooks on their jobs and their careers.
This diversity in job roles, demographics, and life experiences means that HR departments must use different techniques when searching for new applicants and conducting onboarding and training.
In addition to less-skilled workers who often move from one company to another, construction firms tend to have a transient workforce of contractors and subcontractors. A company needing greater flexibility may choose to hire sub-consultants and subcontractors with skills needed for particular projects, rather than creating permanent internal positions. This kind of constant flux can make training and long-term planning more difficult for human resources.
The construction industry is highly regulated, requiring HR to stay on top of a myriad of industry-specific regulations and requirements as well as general employment laws. For example, companies must comply with union contracts, OSHA regulations, the Affordable Care Act, the Fair Labor Standards Act, and other labor laws.
HR departments must also make sure their organization complies with all applicable immigration laws for foreign workers. This adds complexity because immigration law is often confusing and subject to change. Complying with these laws and regulations can impose high costs on employers, but failing to comply could cost even more, with staggering potential penalties and the risk of lawsuits.
HR Strategies for a Construction Company
Even though there are many challenges for HR departments in construction, HR professionals can make a substantial difference in the quality of the workplace for both employees and their employer. Implementing HR best practices tailored to needs in construction, such as the ones below, can help mitigate some of the challenges that HR faces.
Hiring and Recruiting
Leverage the Most Effective Mediums to Reach Talent
Construction project needs are as diverse as the workforce necessary to complete them. Rather than using a one-size-fits-all approach to finding desirable candidates, leverage different mediums to reach different types of workers. Your recruiting tactics for a project manager or civil engineer should be different than what you do for less-skilled workers. For example, using social media to post job descriptions may be the best way to connect with younger workers.
Offer a Competitive Package
Start with a clearly defined job description for each team member so the right candidates will easily recognize that it’s a good fit for them. Then offer competitive pay and benefits, a safe and appealing working environment, bonuses or incentives, and ongoing training and development.
Desirable benefits may include paid time off, generous health insurance, contributing to a 401(k) plan, and less traditional benefits like gym membership that may help your compensation package stand out. Remember, skilled construction workers are in demand, and they will shop around.
Training and Development
Implement a Comprehensive Onboarding Process
Statistics show that new-hire construction workers have more frequent work-related injuries than any other type of employee. HR professionals should make sure that onboarding new employees includes thorough job training with an appropriate emphasis on safety. New hires should learn to recognize job site hazards and be prepared for all types of risks they may encounter.
Helping new hires succeed means onboarding doesn’t begin and end on their first day. Have regular check-ins at least once a month for the first six months, which can help you ensure that employees continue to have the appropriate training and equipment to do their work safely and efficiently.
Create an Ongoing Training Policy
Training should begin on a new hire’s first day, and then continue to be an evolving element of a worker’s career as long as they are part of your team. Today’s workers want career development opportunities that not only increase their skills in their current job but help them explore different career paths, broaden their skill set, and qualify for promotions. For employers, a sound training policy can help reduce their skills gap, improve risk management, and increase retention.
Establish Comprehensive Safety Plans
More than anyone else in construction companies, HR must take the lead in making sure safety procedures are in place and strictly followed. Work with management to develop a comprehensive safety plan and get buy-in to implement it. Your safety plan should include regular workforce training to prevent or minimize safety issues and clear protocols for injuries or accidents. HR managers should also make sure safety information is understood by all workers, including non-English speakers.
Emphasize the Importance of Healthcare
Since construction workers labor in a potentially dangerous environment, many are keenly interested in their healthcare. HR departments should make sure employees understand their health benefits and encourage workers to never ignore signs of injury or illness. Furthermore, explain to your workers why they should make frequent use of their healthcare benefits and how to get the most value from their coverage. For example, your policy may pay for preventive checkups or provide rewards for quitting smoking or losing excess weight.
Institute Channels of Communication
People are more likely to stay with firms where their voice is heard and valued when they are raising a concern. HR should strive to create a culture where employees feel comfortable talking about workplace issues. This kind of open environment helps managers prevent potential problems and address existing issues before they worsen.
Establish channels of communication where employees can voice concerns without repercussions, such as all-hands meetings or a simple suggestion box. Regular check-ins with each employee can also be a great way to hear about their work experience and listen to their concerns or questions. Whatever measures you take, invite bilingual workers to be available to translate for those who do not speak English.
Set Up a Mentorship Program
A mentorship program can be a great tool for retaining construction employees. Veteran employees can share their knowledge by taking new hires under their wing and teaching them on the job. This helps new employees become familiar with the construction site and company culture, fosters friendships between employees, and ensures that valuable knowledge is passed from one employee to another while meeting the new hire’s desire for development. All of these benefits can help new hires see that your firm is a good place to stick with for a long time.
HR in Construction Can Provide a Competitive Edge
In the construction industry, people are the most valuable assets. The roles and responsibilities of HR in the best construction companies center around the welfare of its people. HR helps each worker to achieve their potential while contributing to the company’s success. Following best practices to attract, develop, reward, and retain skilled workers is the surest way your HR team can help your company become known as a place where the best workers prefer to work.