Record-breaking inflation and a war for talent rage on. The economy pressures builders to keep wages high, while they must compete with other companies and industries stealing workers. Firms face pressure from workers to increase wages to compete and compensate for inflation.
Nearly half of employers don’t take inflation into budgeting for salaries, Forbes reported. Less than a quarter of U.S. companies have made changes to pay due to inflation, but 42% of companies said workers had asked them for help with rising costs.
Nevertheless, the transitory nature of inflation poses a tough problem for employers: Offering cost-of-living raises means pay increases become permanent, even if inflation recedes.
In Omaha, Nebraska, Chris Hawkins did the math. The CEO and president of Hawkins Construction and fourth-generation leader of the family business — which largely performs heavy civil construction and road building — discovered that, with usual raises, his hourly tradesworker employees would come up about 3% short of competing with inflation. The annual rate of inflation reached 8.3% in April.
With that in mind, Hawkins said, he dipped into company profits, and each of the contractor’s roughly 340 hourly workers will receive two $1,000 payments to help compete with rising costs of necessities. The first check arrived in April, and workers will receive the second in August.
Nate Harper, a fabricator who has worked for Hawkins for 17 years, said the welcome windfall surprised and excited him and his colleagues.
“Construction as a whole kind of tends to be a kind of week-to-week paycheck for a lot of families,” Harper said.
While the check can help with higher prices for gas and groceries, it could also open the door for workers to enjoy summer travel.
“[Before the check] We didn’t really know if vacation was going to work for our family,” Harper added.
Investing in talent
Hawkins said he found the decision to offer those bonuses easy.
“It’s really difficult to overpay for talent,” Hawkins told Construction Dive. “You can spend a lot on talent and not regret it.”
At the same time, he said, the checks don’t just come with no strings attached. He communicated to his team that businesses face inflation too, and that it relies on them.
“Be focused, be a little more efficient,” Hawkins said he told his employees. “Take five minutes to unravel your extension cord instead of 10. You can help us stay cost competitive.”
Harper said he hoped others in the industry will see the value in boosting workers’ pay during these trying times.
“Everybody knows the problem there, but figuring out how to help the individuals who are carrying you, that’s something a lot of companies could learn from,” Harper said.
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