Construction boom paying off in executive compensation, bonuses, report says
- Engineering News-Record's 1Q Cost Report revealed that compensation for construction executives is near historical highs and professionals at all levels are being awarded hefty bonuses because of strong, continuing demand for construction services and healthy profit margins.
- Using statistics based on 2017 data and provided by industry compensation firm PAS, ENR reported that construction industry salaries have increased annually by about 4% since 2013. The average pay hike for other industries in 2017 was 3.2%. Bonus amounts also rose for industry executives. For example, chief financial officers saw a bonus increase of 27% since 2016, senior vice presidents garnered a 25% increase, and operations vice presidents earned an added-on pay increase of 21%.
- Even with the likelihood of steady pay increases, the limited supply of some professionals, like chief estimators, has led to a "bidding war" in which sought-after employees are able to secure a 20% to 25% pay raise by switching employers. Search firms report that finding the ideal candidate for some positions has become increasingly difficult, and that vice presidents of construction and professionals with experience in alternate project delivery methods are in the highest demand.
While discussion around the labor shortage has been focused primarily on the dearth of those skilled in the trades, the pinch is being felt all up and down the chain of command, leading some construction companies to add to their internal employee programs as a way to make themselves a more attractive option to job seekers.
At Shawmut Design and Construction, Marianne Monte, chief people officer, told Construction Dive last year, is adding to its appeal by creating the opportunity for work-life balance. For example, Shawmut offers leadership development programs, flex time, compressed work weeks, telecommuting and job/shift sharing. While all employees benefit from these initiatives, Monte said they were particularly helpful in drawing in and retaining younger workers. In fact, Shawmut's flex-time program has increased the company's retention rate by three basis points.
Echoing the ENR report, Brian Binke, CEO and president of Detroit-area recruiting firm The Birmingham Group, told Construction Dive in January that a tight labor supply means that the best candidates are already employed elsewhere. To be successful in this kind of market, recruiters must develop trusted relationships with candidates and companies.
Mark Jones of Kimmel & Associates said that is "career-directed" approach to recruiting. Jones said his firm is constantly adding construction professionals to its pool of qualified workers whether or not they're in the market for a new job or not just in case they want to make a move in the future.
- Engineering News-Record Contractor CFO Pay, Bonuses Hit Peaks as Demand Soars
- Engineering News-Record ENR 1Q COST REPORT
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