Secrets to Retaining Employees in a Tight Labor Market

Keeping talented workers starts with hiring right and never really ends. 

Finding quality construction staff in a time of industry-wide labor shortages is a tough proposition. But hanging onto those workers once you land them presents its own set of challenges.

United Rentals talked to McCarthy Building Companies, one of the oldest and largest commercial construction companies in the United States, for a peek at the strategies they use.

Recruit well

According to Al Berardi, executive vice president of human resources at McCarthy Holdings Inc., the parent company of McCarthy Building Companies, the first step in retaining workers is to hire the right ones to begin with.

"A big part of retention starts with recruiting and the hiring process because if you have a high attrition rate, then you're just constantly spinning, and that's going to create a certain brand issue that you don't want in the market." 

Berardi said McCarthy has a robust interview and assessment process that looks at craft skills, education and experience and also takes into consideration behavior through pre-hire personality testing and personal observations during the interview. This holistic evaluation of job candidates has yielded an attrition rate below industry norms.

"We make sure they're a good fit for us and we're a good fit for them," he said.

Improve the work experience

The first year of employment is where companies tend to see the biggest turnover rate, Berardi said, but years five through seven also present a retention challenge. Workers at that stage have experience in their core roles, have received formal and informal training and might have seen a promotion or two. "Now they’ve become very marketable to the outside," Berardi said.

The question then becomes not only how to keep new employees happy but also how to satisfy those who have been in their positions for a while. For McCarthy, the answer has been to ensure opportunities for development and to create an inclusive culture.

One way McCarthy has done the latter is by offering all employees a piece of the company through its Employee Stock Ownership Plan (ESOP). "After a year," Berardi said, "you become an employee owner, and we treat the employees as such." As part of the ESOP, employees participate in annual meetings where executives share financial results and strategic plans as well as other information about operations. "The employee ownership mindset permeates the culture," he said.

McCarthy also puts a premium on training and development in all areas of operations. In 2016 it was inducted into Training Magazine's Hall of Fame for its innovative approach, which includes virtual classroom training, instructor-led classroom training, action learning, online training, on-the-job training with mentoring and peer-to-peer leadership development.

The company has also instituted a feedback system to ensure that managers are performing as they should be. Peers, subordinates and supervisors all have a chance to weigh in on each manager's performance. "A big driver in terms of folks staying or not staying comes down to their local manager," Berardi said. "Do they have their backs? Is it a good relationship? [Do employees] see them as mentors? Is there a mutual trust?"

"Can we help them be more productive or guide them from a career standpoint? Do we need to make adjustments to make this a better place to work? It's critical to continually assess this."

Al Berardi, Executive Vice President of Human Resources at McCarthy Holdings, Inc.


"You can't overlook compensation and benefits," Berardi said. "You have to be competitive in this space."

In addition to an attractive base salary, McCarthy has a system of bonuses for which everyone from CEO to receptionist is eligible. In addition, between the company's 401K and ESOP, which is classified as a retirement plan, the company could end up contributing up to 25 percent of an employee's base salary in any given year. With comprehensive medical benefits and a wellness program in addition to retirement benefits, Berardi said, the goal is to create a place for employees to grow, maintain and finish out their careers.


The final step in developing a workplace that keeps employees happy is a regular look inward, Berardi said. McCarthy assesses its employer-employee relationships through surveys, focus groups, hard data and anecdotal evidence, all with the goal of trying to determine what's going on in the minds of its workers.

"Can we help them be more productive or guide them from a career standpoint? Do we need to make adjustments to make this a better place to work? It's critical to continually assess this," Berardi said.

"We're not there yet," Berardi said, "but we're working to it, and that's the goal."


Kim Slowey is a writer who has been active in the construction industry for 25 years and is licensed as a certified general contractor in Florida. She received her BA in Mass Communications/Journalism from the University of South Florida and has experience in both commercial and residential construction.

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