Construction Workforce Retention: Start with Pay and Benefits
Key Highlights
- Construction industry experiences higher employee turnover, especially during summer months
- Offering competitive pay, aligned with market rates, significantly reduces turnover, particularly among lower-income workers
- A flexible, multi-option benefits package that considers generational needs can enhance employee satisfaction and retention
Regardless of industry, retaining good employees is core to the success of any business.
According to new data from ADP Research, the construction industry is struggling more than most when it comes to employee turnover.
Published in Issue Two of Today at Work 2025, ADP Research analyzed five years of ADP's robust payroll data to uncover turnover trends. Notably, they found employee turnover increases in the summer months of June, July and August, rising to 3.56% compared to 3.14% in the non-summer months.
What does turnover look like in the construction sector?
Summer turnover for construction sits at 3.69% according to the ADP Research data, the fourth highest of 13 industries analyzed. In the non-summer months, construction turnover is 3.29%, once again fourth highest of 13 industries.
While not the worst, construction turnover skews towards the higher end when breaking down by industry.
Why?
One reason might be workforce composition. In their analysis, ADP Research found turnover is higher for part-time and younger workers. If these demographics comprise a large part of your construction workforce, turnover risk may be heightened.
Another reason might be supply and demand. With an abundance of construction jobs and not enough workers, from plumbers to heating pros, to fill them, the competition for talent is stiff. It's imperative for construction companies to stay ahead of the curve when it comes to retention tactics.
How do they do that?
Start with the nuts and bolts: pay and benefits.
Staying Competitive on Pay
There's no secret sauce being discussed here. From plumbing and heating companies to any type of business, competitive pay is the foundation of a solid talent retention strategy.
Circling back to the turnover data from ADP Research, they found lower-paid workers have the highest turnover rates. For example, entry-level workers making between $10,000 and $30,000 have a non-summer turnover rate of 5.98% and a summer turnover rate of 6.99%.
For middle income workers (between $31,000 and $50,000), those turnover rates are 3.97% and 4.62%, respectively.
For upper middle-income workers (between $51,000 and $80,000), the rates are 2.14% and 2.39%. For high income (between $81,000 and $100,000), the rates are 1.83% and 2.01%.
Oftentimes, the more you pay workers, the more they stick around.
In addition to paying more (if it's possible) according to your construction business, keeping track of market rates can also be very helpful. Working with an HR and payroll partner who can provide you access to robust compensation benchmarking data according to factors like location and role can give your construction business visibility into what you need to offer to be competitive.
More broadly, current data paints a very competitive pay picture for the construction industry. According to the latest ADP Pay Insights report, which captures nearly 14.8 million individual pay change observations each month, construction pay grew by 4.5% year-over-year in July 2025. For comparison, the median change in annual pay nationally was 4.4%.
ADP Pay Insights further found the median annual pay in construction in July 2025 was $70,400, higher than the national median annual pay of $60,700.
Providing Benefit Options
Pay is just one part of the compensation equation.
To offer a competitive total rewards package that keeps your construction crew together, benefits must also be factored in.
Similar to the note above, working with the right partner who can also provide your construction organization with benefits benchmarking data can be a huge help to understand what your business needs to be offering to stay ahead of the competition.
When it comes to optimizing your benefits package, bring your crew into the planning conversation so that they have a voice. Ask them what benefits they'd like to see and if there are any you currently offer that aren't needed or not being used.
In today's multigenerational world of work where sometimes as many as six generations are working together, the answers you receive may vary depending on each employee's unique life stage. For example, younger employees may be looking for financial education benefits. Offerings that can help them understand how to save for retirement, use a credit card, invest in the market, or prepare to buy a home.
Employees a little further along in their journey may want extended parental leave or access to childcare.
Across generations, non-traditional benefits like pet insurance, student loan repayment assistance, and mental health counseling have been gaining in popularity.
And of course, the bread-and-butter benefits like health, vision, dental, and 401(k) are always at the core of any benefits package.
If possible, being able to offer a modular benefits plan where employees can choose from a variety of packages depending on what they need might be a good route to explore for your construction business.
Opting against a "one-size-fits-all" benefits plan in favor of a flexible one that enables employee choice can be a huge plus for your construction business' talent strategy.
What Else?
While top-of-the-line pay and benefits are integral to drive retention, your retention strategy can't end there.
Providing employees with skills development opportunities has been correlated to retention. How are you enabling your current construction crew to add new skills and break out from their comfort zone in order to progress their career?
Transparent and consistent communication is also key. Set up recurring one-on-ones with each member of your team to ensure they are happy at work and excited about the future with your construction business. Frequently checking in can also help you identify if any employees are becoming disengaged and thinking about leaving.
Retention is crucial for any construction business from pluming to heating companies. Replacing employees is often more expensive than retaining them. Moreover, keeping your crew together can maximize chemistry and productivity, creating a healthy company culture that gets projects done on-time with quality work.
Pay and benefits are imperative to drive construction retention, but taking a holistic approach that factors in skills development, communication and recognition is even better.
About the Author
Kit Dickinson
After spending six years at Accenture leading technology and strategy projects, Kit Dickinson moved on to IDI where he was president and responsible for managing strategic partnerships, product innovation, sales, marketing and overall company leadership. Dickinson led IDI to a successful acquisition by ADP where he was responsible for overseeing integrating IDI’s capabilities into ADP technology. Dickinson recently moved into ADP’s Business Development organization as an industry executive to help lead ADP’s industry-focused efforts.