The Contractor Turnover Treadmill: Construction Hired 3.99M and Lost 3.97M in One Year

The Whole Industry Hired 4 Million People and Grew by 21,000

Here is the treadmill in one line. In calendar 2025, US construction made 3,987,000 hires and recorded 3,966,000 total separations. The industry averaged 8,267,000 jobs that year. All of that hiring and losing netted out to about 21,000 added jobs, roughly a quarter of one percent of the workforce.

Read it as a rate and it is starker. Monthly hires averaged 4.0% of employment. Monthly total separations also averaged 4.0%. Sum the monthly separation rates across the year and you get 48%, so the sector cycles through the equivalent of about half its headcount every twelve months just to stay level.

Source: BLS Job Openings and Labor Turnover Survey, construction sector, annual totals, not seasonally adjusted. Employment base from BLS Current Employment Statistics, construction, 2025 annual average.

Note which line is bigger. Layoffs and discharges (2.06M) exceed quits (1.74M). That is the shape of a project-driven industry: crews scale up for work and scale down when it finishes. Some of that churn is structural and you would not want to eliminate it. What you want to eliminate is the expensive, avoidable kind, and the way you find it is by measuring your own separations rather than assuming the industry number is yours.

This is the treadmill. And the financial cost is higher than most contractors realize, because it is not just recruiting expenses, it is the margin destruction that happens every time a $76/hr journeyman gets replaced by a $39/hr apprentice for two months while you scramble to backfill.

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Why There Is No Trustworthy "Turnover Rate by Role"

You will find per-role construction turnover tables all over the internet, running from the high eighties for general laborers down to the low forties for administrative staff. We published one on this page for over a year. We have removed it, and here is why.

BLS JOLTS is the only authoritative source for these flows, and it reports them by INDUSTRY, not by occupation. There is a construction series. There is no electrician series, no project-manager series, no administrative-staff series. So a per-role ladder cannot be sourced to JOLTS, no matter how often it is attributed there. When we went looking for the origin of the ladder we had published, the citations behind it could not be located and the numbers appeared in no dataset we hold.

There is a second, quieter problem with the skilled-trades number specifically. Total separations across all of construction, including the highest-churn segments, run about 4.0% per month, or roughly 43 to 48% annualized. Skilled trades are among the least churn-prone parts of the sector, not the most. The rate we had published for them sat well above an industry ceiling it should sit comfortably below. That is not a rounding disagreement, it is a number pointing the wrong direction.

We also cannot derive it ourselves. Our contractor dataset has employee records, but it does not carry termination dates, so it cannot produce a turnover rate for any role. Publishing one anyway would be inventing it.

What to do instead. Count your own separations by role over the last 12 months. Divide by your average headcount in that role. That is your turnover rate, it is specific to you, and it is the only version of this number that can tell you where to spend retention money.

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What Each Departure Actually Costs

Most contractors think of turnover cost as the recruiting expense. It's not even close. The real cost includes recruiting, onboarding, training, lost productivity during ramp, and the billing rate gap while the seat is filled with a less-skilled worker. Billable revenue scales sharply by skill: a journeyman typically generates on the order of ~$145K/year in billable revenue vs ~$55K for a helper (see our bill rates by skill level). Retaining one journeyman preserves that ~$145K/year in billing capacity plus $12K+ in direct replacement economics at the median, narrower industry cuts often cite $4,500-$12,000+ per skilled departure, while the fully loaded skilled-trades band in our table below runs $8,500-$18,000.

A skilled tradesperson costs $12,800 to replace, and that's before you account for the 8-12 weeks of reduced output while they ramp. A project manager costs $45,300 and takes up to 20 weeks to reach full productivity. That's five months of a PM operating below capacity on your most complex jobs.

And these are conservative numbers. A $30/hr tradesperson costs $55-$60/hr fully loaded, over 150% of base pay, once you factor in payroll taxes, workers comp, benefits, truck, tools, and training. The cost of hiring a new tech runs through the full build, and it's consistently six figures annually for a journeyman-level hire.

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The Math on a 20-Person Crew

Let me make this tangible with a worked example rather than a borrowed rate. Run it with your own separation count, not ours.

Take a 20-person field crew. Apply the construction-sector separation rate of about 4.0% of employment per month (BLS JOLTS, 2025) and you get roughly 10 departures across a year. That is an industry-average stand-in, and your real number could be well above or below it, which is the entire reason to count yours.

Direct replacement costs: 10 departures x $12,800 = $128,000

Billing rate reduction during backfill: When a journeyman leaves and you temporarily fill the slot with an apprentice, you lose the margin spread. From our bill rate benchmarks by skill level, journeymen bill at $76/hr and apprentices at $39/hr. If each departure creates a 6-week gap at the lower rate:

10 x 6 weeks x 40 hours x ($76 - $39) = $88,800 in lost billing

Total annual cost of turnover in this scenario: about $217,000

That is roughly $217,000 a year on a 20-person crew, gone to churn. Not invested in equipment, not paying down debt, not improving margins. Burned on the treadmill. Swap in your own departure count and the arithmetic is the same.

For context, our data across 2,242 contractors shows the median bill rate is $79/hr and top-performing techs generate $180K-$280K in annual revenue. Every journeyman departure is a $43/hr margin engine going dark for 8-12 weeks while you replace it with a $16/hr margin engine. The utilization benchmarks compound the problem, a new tech running at 70% utilization during ramp versus a veteran at 96% means you're losing on both rate and volume simultaneously.

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The Industry Shortage Makes It Worse

This would be painful in a normal labor market. In this one, it's devastating.

The construction industry needs 349,000-499,000 net new workers in 2026-2027. That's on top of replacing departures. 92% of firms report difficulty finding qualified workers. 45% cite labor shortages as their leading cause of project delays, not materials, not permitting, not financing. People.

When your journeyman leaves for $2/hr more across town, the replacement timeline isn't 2-3 weeks. In this market, it's 6-12 weeks for a skilled tradesperson, and some positions go unfilled for months. Every week that seat is empty is another week you're either turning down work, sending a less-qualified tech, or paying overtime to cover the gap.

The bottom 25% of contractors in our dataset generate only $80K-$120K in revenue per technician. The top 10% generate $180K-$280K. That spread is partly bill rate and partly utilization, but it's also tenure. Experienced techs who know your systems, your customers, and your dispatch patterns simply produce more revenue per hour than someone in their first 90 days.

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Where Retention Has Actual ROI

The math is clear: cutting 5 departures a year out of the scenario above, whatever your starting rate happens to be, saves:

• 5 x $12,800 = $64,000 in direct replacement costs
• 5 x 6 weeks x 40 hours x $37 spread = $44,400 in preserved billing
• $108,400 in annual savings from five avoided departures

The levers that actually move retention aren't complicated, but they cost money, and the question is whether the investment pays back. Based on the data:

Compensation bands matter more than total comp. Senior roles churn less than junior ones across every workforce dataset, and the difference isn't just money, it's clear progression. Techs who can see the path from apprentice ($39/hr bill rate) to journeyman ($76/hr) stay longer than those who feel stuck. Transparent pay progression tied to skill levels and certifications gives your workforce a reason to vest.

Schedule predictability reduces churn. Our scheduling benchmarks show the link between overtime patterns and workforce stability. Chronic overtime drives departures. So does chaotic scheduling. The contractors in our dataset with the tightest utilization ratios, those running at 90-96% without spilling into chronic OT, tend to hold people longer because the workload is sustainable.

The cost of a raise is less than the cost of a replacement. A $3/hr raise for a skilled tradesperson costs $6,240/year. Replacing that same tradesperson costs $12,800 plus $8,880 in billing rate reduction during the gap. If the raise has even a 50% chance of retaining the employee for an additional year, it's net positive.

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The Honest Assessment

If you're a $3-10M contractor, turnover is probably costing you $150K-$500K per year depending on crew size and trade mix. You're spending it whether you track it or not. The difference between contractors who manage it and those who don't is visibility, knowing the number, knowing which roles churn fastest, and knowing whether your retention spending actually produces ROI.

The treadmill only stops when you start measuring it.

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Q: How does Level help with turnover cost analysis? A: We connect to your payroll, field service software, and accounting data to calculate actual turnover cost by role, including the billing rate gap, productivity ramp, and recruiting spend. Most contractors are shocked by the number. The first audit is free, and the turnover analysis is part of it.

Q: What turnover rate should I target? A: Start by beating the sector. Construction total separations run about 4.0% of employment per month, roughly 43 to 48% annualized across the whole industry including its highest-churn segments (BLS JOLTS). A skilled-trades crew should sit well below that, because skilled trades churn less than laborer-heavy work. We deliberately do not publish a per-role target: BLS does not break these flows out by occupation, and we would be making the number up. Zero turnover isn't realistic or even desirable, some churn is healthy. The goal is reducing the expensive, avoidable departures of trained, productive technicians.

Q: Why did this post used to show turnover by role, and where did that table go? A: It showed a per-role ladder, from general laborers at the top down to administrative staff at the bottom, that we could not defend. The citations behind it could not be located, the numbers appear in no dataset we hold, and BLS JOLTS, the only authoritative source for construction turnover flows, reports by industry rather than by occupation. The skilled-trades rate it showed also sat above the total-separations rate for all of construction, which is backwards for one of the sector's lower-churn segments. We removed it rather than keep publishing it with a disclaimer. The industry flows above are what the data actually supports.

Q: How do I calculate my own turnover cost? A: Start with the number of departures in the last 12 months. Multiply by the replacement cost for each role (use $12,800 for skilled trades as a baseline). Then estimate the billing rate gap, how many weeks each seat was filled by a lower-skilled worker or left empty, and what that cost in revenue. Add the numbers. That's your floor, because it doesn't include the customer relationship disruption or the overtime paid to cover gaps.

Q: Is it better to invest in retention or just hire faster? A: Retention, and it's not close. Hiring faster in a market with 349,000+ unfilled positions is a losing strategy, you're competing with every other contractor for the same shrinking pool. A $6,240 annual raise costs less than half of one $12,800 replacement. Invest in keeping the people who already know your business.