February 2018

The Labor Shortage: The cost of a poor hire

Part four of a four part series about the labor shortage from experts at Builders Mutual

Builders Mutual

Throughout this series, we have covered the challenges of today’s labor shortage along with potential recruiting, hiring, and training practices. To conclude the series, let’s take a look at the cost of a poor hire. Sean Purcell, risk management technical manager at Builders Mutual, joins us to answer frequently asked questions.

How does a poor hire affect the safety of workers and the job-site environment?

A poor hire affects everyone on the job-site. Not only is there the potential of the new hire to get injured, but there’s also the increased potential for other employees to get injured. These other employees could potentially be paying more attention to the new employee than to what they are supposed to be doing, which is dangerous for everyone.

A lot of the time, small builders don’t have a specific employee whose sole job is to train new hires, which leaves that job up to current employees to cover in addition to their usual roles within the company. Not only does this mean they have to spend time away from their own jobs to get new employees up to speed, but these employees aren’t necessarily the best safety instructors. It is possible that they could have been given improper training themselves, which means poor safety measures will be passed along to the new hires. Plus, the employee taking on training responsibilities won’t have the time to do either job well.

It is imperative that contractors hire and designate a person with proper training to educate new employees. Contractors can look to local organizations, websites, and staffing companies to find someone with training in a particular skill set to come in and train new hires.  The Job-Site Safety Institute recently partnered with the National Association of Home Builders to create a series of safety videos that can support your efforts to educate and train new employees.

How does the quality of work differ between a good hire and a poor hire?

Quality work is important no matter what. If a poor hire is part of a finish crew working on trim, that trim needs to be done well because it is an aspect of the job that people will see. But quality is also important when a new hire is working on rough framing. Even though no one actually sees the framing in the final product, the quality has to be there for the house to be level and square.

A good hire will produce quality work no matter the scenario, while a poor hire makes mistakes that slow the team, extend the timeline, and add to costs.

Does the time needed to train a poor hire alter the productivity of a work crew?

A poor hire can absolutely alter a work crew’s productivity. Productivity is measured by how many boards workers put up or how many feet of pipe they lay down, depending on the job. If the designated trainer is part of that work crew, they have to take time away from the construction work to teach a new hire about safety and quality. That means fewer hands on deck and, therefore, a longer timeline for getting the job done.

Also, with a new hire, there always comes the possibility of mistakes, especially if the new hire doesn’t receive proper training. When mistakes are made, builders have to take the time to go back and correct any problems the employee caused. This further extends the timeline.

What are the financial costs of a poor hire?

The financial costs differ between consumer and company. For the consumer, higher costs are due to productivity loss. As mentioned previously, the time spent to train and to fix mistakes made by a poor hire extends the construction timeline. In the long run, the consumer ends up paying more because the job takes longer.

For the company, any injury to or caused by a poor hire adds to insurance costs. There’s also the loss of time spent finding and training a replacement for the injured worker. Poor work may even lead to a construction defect against which the consumer can file a claim. If the final product doesn’t meet consumer expectations, then the reputation of the company could be affected, which could cause a financial burden in the future.

How does the reputation of a company change with the addition of a poor hire?

Low-quality work and extended timelines will almost always cause the reputation of a company to suffer in the mind of the consumer. But reputation is also important to potential employees.

Every worker has a preference about the type of company they work for. Some want to work for companies that don’t have safety practices implemented because they perceive those practices as an annoyance. However, most workers want to work for companies that do have safety practices implemented because they want to make sure they get home at the end of the day.

Workers talk to each other, even those from different companies, so they know what companies do what, and where to find the company that fits their needs best. When you uphold good safety practices, you will attract better, safer workers.

How can background checks weed out a poor hire?

When you’re looking for new hires, you should look at them from the consumer’s standpoint. For example, if a client needs a security system installed, you need to make sure the person entering the customer’s home is not a convicted felon. For this, you need to implement background checks. It’s a small price to pay, and it saves in the long run to know who you’re working with and who you’re sending into someone else’s home.

What should you do if you think you’ve made a poor hire?

Even with a hiring process in place that includes acquiring resumes, references, and background checks, a poor hire could still slip through.

If a new employee shows signs of being a poor hire, it can be difficult to know whether to give them a chance or to fire them. However, if they show promise, look like they are willing to learn, and are invested in the company, these are all signs that you should spend time on further training. It’s well worth the time if you are going to create a long-term employee as a result.

It is just as important to make sure your subcontractors have dependable employees. This can be hard to ensure, but it’s certainly acceptable to ask them whether their employees are capable and reliable.

From Recruitment to Hire

Builders Mutual is dedicated to helping builders decrease the amount of risks prevalent on the job-site. In this series, we have covered recruiting, hiring, and training practices, as well as the costs of poor hires, to establish a foundation of knowledge for builders faced with the difficulty of hiring new employees. Together, we can continue to educate and invest in our future workforce.

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