Why Construction Businesses Need a Strong Company Culture

The University of Chicago estimated in 2024 that the construction industry loses $2.8 trillion a year because of low productivity.

While manufacturing, agriculture, professional services, and adjacent industries continue to increase productivity levels, the construction industry remains somewhat flat. And we regularly see new reports speculating about why this is failing to improve in a meaningful way. At the company level, we know the real-life impacts:

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“Low productivity” manifests as:

-Over-budget projects

-Challenges in worker recruiting and retention

-Jobs, phases or tasks that run over schedule

-Callbacks/rework due to quality issues

-Apathy, lack of motivation, and poor morale

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McKinsey estimates that 98% of mega projects go over budget by 30% with 77% of those being at least 40% late.

Supervisors, PMs, suppliers, owners, and workers are all blaming one another, which is just a symptom of an underlying cause. The reality is more complex. This productivity crisis is more deeply rooted than inefficient workers, poor communication, supply challenges, or a persistent shortage of skilled labor. This cannot be solved by just “working harder” or hiring more staff...

The biggest opportunity to improve productivity comes from developing better company cultures.

The Problem

Some blame productivity challenges on the labor shortage, but here's the thing: contractors aren’t getting the most out of the workers they have. And it’s not because the workers are lazy. It’s because their company culture routinely falls short.  Further, incentives are simply misaligned.

Most of our workers are stuck in an hourly pay structure, one that does not change based on work quality, or efficiency. In fact, only 15% of hourly workers receive goal-based bonuses – even though they are doing most of the hardest work. Yet, management seems to get bonuses… Seriously, WTF.

Differences in priorities can cause friction (and resentment) between workers and their managers. As a result, everyone loses. Linking performance, to higher compensation, on the other hand, is a foundational element to building a better culture.  But it’s not just about the money...

The best places to work are built on pillars like Authenticity, People-First Leadership, Communication, and Growth. These are the elements that build trust between employees and managers and make for a thriving culture. And a thriving company culture is most productive.

What Is Company Culture?

Even if you don’t know it, you have a company culture. Everyone does. But if you haven’t invested in it, your culture won’t necessarily be a positive force for success.So, let’s back up a second. How is company culture defined?

Company culture is the shared values, attitudes, behaviors, and standards that make up a work environment. Think of it as your company’s personality.

As you might expect, good culture is a powerful driver of business success. In practice, this show itself in these types of outcomes:

-Getting the best people to work for you and retaining them longer

-Safety as a team mindset, not a certificate or wallet card

-Open communication that drives job efficiency

-Engaged workers, with an interest in company growth

-Delivering industry-leading quality and productivity

Achieving a strong company culture takes constant commitment from leadership, but the results will pay off. Just take a look at these stats:

-More than 75% of job seekers consider a company’s culture before applying for a job with them. -Glassdoor

-56% of respondents said culture is more important than salary. -Glassdoor

-62% of workers that want to quit name “toxic culture” as the primary reason. -Flex Jobs

Building the Foundations of a Strong Company Culture

We believe there are four foundations to building a strong company culture for construction businesses. Click the links to read more about each:

Authentic Leadership

People-First Mentality

Communication Expertise

Growth Strategy