July 14, 2023 Developing the Skills to Keep Skilled Laborers

Managers tend to focus on hiring to fill skill gaps, but retention is often a more effective approach.

By Kirsten Tornow, HR Coach at Paychex

As other industries’ labor challenges wane, skilled trades leaders are still trying to navigate a significant shortage. According to a 2022 survey from the National Fire Protection Association, 42% of respondents noted the bulk of their 2023 budgets will go toward ongoing staffing challenges, with many saying they need to increase headcounts to succeed. It’s not an easy feat in today’s market, but there are strategies that can help leaders overcome it.

While every industry is unique, the challenges skilled labor employers now face are not. Every industry has experienced shallow hiring pools and the need to adjust to accommodate workers’ shifting preferences. Now is the time for skilled labor leaders to explore creative strategies that can help them overcome the issue.

Changing gears: Reaping retention’s rewards

In difficult labor markets, managers tend to focus on hiring to fill gaps. However, retention is often a more effective approach. High retention could mean that staff is trained, experienced, and knowledgeable.

To support retention, HR managers can:

• Prioritize engagement. Engaged employees are valuable assets to a business. When people are excited about the work they do and the people they work with, they’re more likely to give a project their all. Some HR managers (43%, according to a recent Paychex report on skilled labor challenges)  develop recognition programs, while others offer team lunches or happy hours to encourage bonding and reward hard work. There’s no one definition of engagement that works everywhere but finding ways to foster camaraderie can go a long way toward the goal of retaining employees.
• Provide training. Offering technical and practical training often feels like an added expense, but it can yield a significant return. Still, the Paychex report noted above found that only 43% of managers have tried offering educational resources to aid retention. Offering safety courses and additional certifications, for example, helps upskill existing workers to fill talent gaps without increasing headcount. It also sends the message that you are invested in employee growth and helps to prepare employees for promotions.
• Make communication central. In its survey of employees in skilled labor roles, NFPA found that 40% of respondents believed the biggest opportunity for technology to improve their day-to-day work on the jobsite would be to provide ease of communication between team members. It’s an unsurprising statistic, considering that only 52% of management respondents in the Paychex survey said they view communication about goals and progress as a tactic for improving engagement—and even fewer (39%) said they are prioritizing investments in technology. This may illustrate an opportunity to improve workers’ lives while boosting engagement and facilitating productivity. It’s a win-win-win!
• Evaluate compensation plans. It may seem obvious but bears repeating: the paycheck is often what counts. Re-evaluating compensation for tenured workers is a straightforward initiative that shows employees you’re committed to keeping them. Still, in the Paychex report, when asked what tactics they use to keep employees, only 52% of employers indicated they increase pay—and only 39% said they improve benefits.
  Pursuing these avenues may seem difficult when budgets are tight, but it’s likely to be worth the expense. The May Small Business Employment Watch Report found that construction earnings growth jumped 4.89% in May 2023. Employers looking to keep workers need to be aware of and keep pace with this growth. It’s often impossible to stay in business without workers, so paying more to keep your best people around can be a great investment.
• Ask for help. Running a business is hard enough without the additional stress of HR administration. Paychex found that 80% of skilled trade leaders report being stressed at work, with many saying it affects their sleep (56%) and mental health (31%). All too often, HR administration eats up significant amounts of leaders’ time, further exacerbating the issue. Still, many managers think they need to overcome these challenges alone to avoid burdening their staff.
  Engaging a professional employer organization (PEO) can help leaders outsource staffing, payroll, and recruitment tasks, without increasing hiring or putting more strain on current workers. Even so, only 16% of respondents in the Paychex survey reported using a PEO to lighten the load. If you’re not among them, it might be time to consider doing the same.

Supporting Managers to Support Staff

Change is hard, and doing it alone is even more challenging. However, adjusting recruiting practices to focus on retention is likely an easier road than banking on expanding headcounts in today’s skilled labor market. Engaging with an experienced HR partner can help alleviate the stress associated with HR management so leaders can focus their time and effort on core services without sacrificing employee satisfaction or effective administration.

About Kristen Tornow, SPHR, PHRca, SHRM-SCP
Kirsten Tornow is currently an HR Coach at Paychex supporting approximately 60 HR specialists across the U.S. who advise Paychex clients on the wide range of business and HR issues facing companies today. Kirsten joined Paychex in February 2010 as an HR Generalist and rose through the ranks to a Senior HR Generalist, HR Consultant and most recently as an HR Coach. With over 15 years of HR experience, Kirsten has extensive expertise in strategic human resources planning, employee relations, compliance, training and development, and more. She has a Bachelor of Arts degree in Communication with an emphasis in Interpersonal and Organizational Communication as well as certifications from SHRM and HRCI.

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