What Is the Average Construction Employee Turnover Rate?

In the United States, the construction industry had about 273,000 job openings as of May 2025, according to the U.S. Bureau of Labor Statistics. This shows how common it is for construction companies to lose workers and struggle to fill positions, often because of high employee turnover. Employee turnover simply refers to how often workers leave a company and need to be replaced.

The average construction employee turnover rate is between 20% and 30% per year, which is almost twice the rate across most other industries. As a construction company owner or manager, understanding the factors that influence this rate will help you retain more employees, keep projects on track, control labor costs, and ultimately grow your business.

At Highspire, we help construction companies reduce employee turnover by building stronger, more stable workforce systems. Through our construction coaching programs, our expert construction business consultants work with you to improve retention, streamline hiring, and create a workplace culture that keeps your best workers around. Reach out to us today to book a call and let’s build a team that you can rely on.

In this blog, we’ll explain what construction employee turnover means, how to calculate it, why it’s so high in the construction industry, and how it affects your business. Most importantly, we’ll share seven practical tips to help you keep your workers longer and reduce turnover in your company.

What Is Construction Employee Turnover?

Construction employee turnover refers to the rate at which workers leave their jobs and need to be replaced within a construction company. This includes both voluntary turnover such as employee quits or resignations, career changes, or relocations, and involuntary turnover such as layoffs, project completions, or terminations.

High employee turnover can lead to delays, higher costs for hiring and training, and loss of experienced skilled workers. On the other hand, reducing turnover not only cuts costs but also improves project consistency, quality, and team morale.

What Is the Average Construction Employee Turnover Rate?

The average turnover rate in the construction industry typically ranges from 20% to 30% per year. This is significantly higher than the national average annual turnover rate across all industries, which tends to range around 12% to 15% annually.

Turnover rate is usually higher in construction than in many other industries because of factors like seasonal work, physically demanding tasks, job site risks, short-term contracts, and other factors which we will discuss in detail later in this blog.

How to Calculate Employee Turnover Rate in Construction

To calculate employee turnover in the construction industry (or any industry), use a simple formula that measures how many employees left during a specific period compared to the average workforce size. The standard formula is:

Turnover Rate (%) = (Number of Employees Who Left ÷ Average Number of Employees) × 100

This method applies whether you’re measuring voluntary departures, total separations, or comparing across departments. In construction, you may also track turnover by project phase, trade role (such as electricians, laborers), or by subcontractor to identify where employee retention issues are most critical.

Example Calculation:

Suppose 50 employees left your construction company in a year. Also, assume you started the year with 200 employees and ended with 250 current employees. To calculate the turnover rate, calculate the average number of employees during that same period. Using the assumed data in this example:

Average number of employees: (200 + 250) / 2 = 225

Then, applying the general formula given earlier:

Turnover rate = (50 / 225) x 100 = 22.2%

Why Is Turnover High in Construction?

Understanding the core reasons behind high turnover is key for construction firms that want to improve employee retention, increase hiring cost savings, and maintain productive crews. The primary factors contributing to a high turnover rate in construction include:

1. Project-Based and Seasonal Employment: Most construction jobs are tied to specific projects. Once the work is finished, the employee contract often ends, and the workers will need to find new employment. This cycle of starting and stopping makes long-term job stability difficult and increases overall workforce turnover. Moreover, seasonal conditions affect the continuity of some construction projects. In colder climates, outdoor construction may have to pause for weeks or months, and this may lead to layoffs or voluntary exits within that period. Workers facing these gaps may choose to move into more consistent industries or roles, even if the pay is lower.
2. Physically Demanding Work: Construction work is often tough on the body due to its physical demands. On a typical construction site, daily tasks involve lifting heavy materials, operating equipment, working in extreme temperatures, and standing for long hours. All of these can result in fatigue and burnout over time. The physical intensity of the work limits long-term career sustainability, especially for those without access to medical support or lighter roles within the company. Therefore, as workers get older or experience injuries, many of them leave the industry entirely or look for lighter-duty jobs in other sectors.
3. Safety Risks and Injuries: Regardless of the safety protocols and regulations, construction remains one of the most dangerous industries. Many construction sites still experience falls, equipment accidents, and repetitive stress injuries which may lead to downtime or permanent exit from the field. Frequent injuries not only take a physical toll but also create financial and emotional strain on workers. When a construction company fails to prioritize safety, employees are more likely to leave their roles, or even the industry altogether, for safer, more stable work environments.
4. Lack of Benefits and Career Growth: Not all construction workers receive health insurance, paid time off, or retirement plans. You’ll find such cases especially with those working for small firms or as subcontractors. Without these benefits, your workers may feel undervalued and exposed to financial risk. In addition, many roles offer limited clear paths to career development opportunities. Without training opportunities or promotions, skilled workers may leave to pursue jobs where they see more long-term potential or professional development.
5. Competitive Labor Market: The demand for skilled labor in construction is high, so competitive compensation becomes an advantage. As a result, many companies often compete for workers by offering slightly better pay, signing bonuses, or more favorable job conditions. With this, it becomes easier for employees to switch jobs frequently. Even small improvements in compensation or benefits can prompt a move, especially when loyalty is not backed by long-term incentives or clear progression.
6. Healthy Work-Life Balance and Job Satisfaction: The nature of construction work is such that it often demands long hours, early mornings, weekend shifts, and sometimes long travels, especially during peak project periods. This schedule can interfere with family time, rest, and personal responsibilities, leading many workers to feel burned out or disconnected from life outside of work. Moreover, when employees feel overworked without support or recognition, it affects their overall job satisfaction. Without flexible scheduling, mental health resources, or opportunities to recharge, workers may choose to leave their positions in favor of roles that offer more balance and personal well-being. If your company fails to address this, you risk losing talent to less demanding industries.

How Does High Turnover Hurt Construction Companies?

When turnover is high, it disrupts daily operations, puts unnecessary pressure on remaining staff, and makes it difficult to expand your construction company. Beyond immediate delays, frequent departures can also affect morale, reputation, and long-term profitability. Let’s discuss the consequences of high employee turnover in detail.

1. Project Delays and Disruptions

Losing workers while a project is going on often causes unexpected slowdowns. That’s because new hires take time to onboard and may not have the experience needed to keep up with complex project demands.

Even temporary vacancies in skilled or unskilled labor can create scheduling issues, missed deadlines, and increased overtime for existing staff. These delays can lead to contract penalties and strained relationships with clients.

2. Increased Hiring and Training Costs

When your company turnover is high, you’ll be forced to spend more on recruiting, hiring, and training new employees. The costs also include job advertising, HR time, orientation, and safety certification programs.

Besides direct recruitment costs, there are other indirect costs (or sometimes hidden costs), such as lost productivity as you work with new workers to get them up to speed. For companies operating on tight margins, these recurring expenses quickly add up, increase your construction business expenses, and reduce profitability.

3. Loss of Skill and Knowledge

Experienced workers often carry institutional knowledge that isn’t written down, such as project-specific insights or efficient techniques. When these kinds of employees leave your company, that knowledge goes with them.

As such, effectively replacing skilled tradespeople is particularly difficult in a market with labor shortage. Inexperienced hires may make costly mistakes or require closer supervision, putting more strain on foremen and project managers.

4. Lower Team Morale and Productivity

High turnover can make it hard for your team to build trust and operate efficiently. Communication issues and inefficiencies become more common when coworkers are constantly changing. In addition, remaining employees may feel overworked or undervalued if they’re expected to pick up the slack. Over time, this leads to burnout, resentment, and even more turnover, thereby creating a negative cycle.

5. Safety Risks and Compliance Issues

A stable team is better at maintaining jobsite safety because they’re already familiar with protocols and each other’s working styles. On the other hand, constantly rotating staff increases the risk of accidents due to inconsistent training or lack of experience.

Meanwhile, remember that poor safety performance can lead to OSHA violations, fines, and a damaged safety record, and all of these can hurt your company’s ability to get new construction jobs.

6. Reputational Damage and Lost Business

One of the key things clients and general contractors value is reliability. When turnover leads to delays, quality issues, or communication breakdowns, it can harm your company’s reputation in the market. Additionally, a reputation for unstable crews or high employee churn may limit future contract opportunities and weaken long-term growth prospects.

7 Pro Tips on How to Reduce Employee Turnover in Construction

Reducing employee turnover requires more than just offering steady work. You need to focus on key areas like construction employee benefits, safety, wages, culture, and career growth. Here, we’ve provided seven proven strategies to help reduce turnover rate as a construction company owner or manager.

1. Offer Competitive Wages and Benefits – One of the most effective ways to retain construction workers is to offer pay that matches or exceeds industry standards. Workers are more likely to stay with a company that values their skills with fair compensation. In addition, benefits like health insurance, retirement plans (such as 401(k)s or pensions), paid time off, and tool or travel stipends can make a big difference in keeping employees long-term. Make sure you clearly communicate the benefits you offer in your construction employee contract.
2. Ensure Safe and Healthy Working Conditions – Safety plays a major role in worker satisfaction and employee retention. Companies that enforce strong safety protocols, provide proper equipment, and conduct regular training send a clear message – their employees’ health matters. Healthy working conditions also include access to clean facilities, adequate breaks, and mental health resources.
3. Provide Consistent Work and Scheduling – Irregular hours and seasonal layoffs are major factors that contribute to high turnover in construction. Whenever possible, your company should aim to provide year-round work or early notice of project gaps. With reliable schedules, your workers can plan their personal lives and reduce the stress that comes with uncertainty. Even offering retention bonuses or guaranteed return-to-work timelines can help keep employees committed during slow periods.
4. Invest in Training and Career Development – No matter the employee title or level in the company, offering training programs, apprenticeships, and certifications is a good way to empower them, build their skills, and advance their careers. This shows employees that the company is invested in their future, not just their labor. On the other hand, career development also opens doors to leadership roles and higher-paying positions within the company. When you provide a clear path for career advancement opportunities, you keep employees engaged and less likely to leave.
5. Hire a Construction Company Consultant – Sometimes, all you need is professional guidance from construction business coaches. With their assistance, it’s easier to identify gaps in your employee retention strategy and create a more positive work environment. These experts also offer insights into compensation, scheduling, training, compliance, and employee engagement.
6. Improve Onboarding and Orientation – A strong onboarding process sets the tone for a worker’s entire employment experience. It should clearly communicate job expectations, safety procedures, company policies, and available benefits. When new hires feel welcomed, supported, and well-informed from the start, they are more likely to stay. Contrarily, poor onboarding often leads to early resignations or employee performance assessment issues.
7. Build a Positive Company Culture – Beyond good pay, remember that respect, recognition, and communication are key parts of a healthy workplace culture. Your supervisors should regularly check in with employees, give constructive feedback, and acknowledge hard work. We also recommend that you encourage open communication, teamwork, transparency, and other positive company values. As much as possible, celebrate milestones and exceptional performance, such as employee of the year awards. You can also check out these construction employee gift ideas for inspiration.

Want to Reduce Your Employee Turnover Rate?

Employee turnover may be high across the construction industry, but it doesn’t have to be high in your company. From offering competitive pay and employee benefits to improving safety, scheduling, and company culture, small changes can lead to lasting results. Make sure you understand the root causes, track your turnover rate, and put the right retention strategies in place.

At Highspire, we help construction firms take control of their workforce challenges, empower employees, and reduce costly turnover. Through our coaching programs, we’ll guide you in building stronger retention systems, better hiring practices, and a company culture that keeps workers loyal. Schedule a consultation with us today!

FAQs

Turnover is a major challenge in construction, but the causes, consequences, and solutions aren’t always straightforward. In this section, we’ll answer the most common questions construction leaders ask about employee turnover.

How to Stop Losing Construction Workers

Offer competitive pay, strong benefits, and consistent scheduling. In addition, invest in safety, training programs, and a supportive workplace culture to keep your construction workers engaged and loyal.

What Is the Employee Retention Rate in the Construction Industry?

The retention rate in construction typically ranges from 70% to 80%, depending on the region and role. This means turnover averages 20% to 30% annually, higher than in many other industries.

What Is a Good Turnover Rate in Construction?

A turnover rate below 15% is considered good for construction firms. Lower rates indicate strong workforce stability and effective retention practices even in the midst of labor shortage.

How Often Should You Calculate Employee Turnover?

Turnover should be calculated annually for long-term trends and quarterly for more immediate workforce insights. Regular tracking helps identify issues early and adjust strategies as needed.

What’s the Difference Between Turnover and Attrition?

Turnover includes all employee departures, whether voluntary or involuntary. On the other hand, attrition refers only to voluntary exits where the position is not refilled.