Employee retention is best described as a formula for keeping/retaining employees. People are hard to replace, and it’s tough to train new people. Employee retention is something that every industry can take note of in terms of best practices, and the construction industry is no exception.
At MBI, we have put together a series of member retention resources that can be found on our website here: https://mbi.build/login/. All members have access to these resources and can be manipulated and/or changed to fit your mission. There are plenty of companies that are in high demand for resources on employee retention. This blog post is about why incentives, culture, and long term alignment are the driving forces behind retention in this industry.
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Title: Why retention is the new growth strategy for contractors | Plumbing & Mechanical
By: Chris Buttenham, co-founder of Reins
March 26th, 2026
As labor shortages persist across the plumbing and mechanical trades, contractors are facing a critical question: how do you grow when hiring remains difficult?
For Chris Buttenham, co-founder of Reins, the answer starts with a shift in mindset. Instead of focusing solely on recruitment, contractors need to prioritize retention. But, how can they do that? Simple: through stronger culture, better-aligned incentives, and long-term employee engagement.
Buttenham shares why traditional compensation models are falling short, how small contractors can compete with larger firms, and what the future of workforce strategy looks like in the trades.
Labor availability has remained relatively flat even as demand rises. Why is retention now more important—and more cost-effective—than recruitment?
Replacing employees is incredibly expensive. Gallup estimates it can cost anywhere from 50% to 200% of an employee’s salary to replace them.
Beyond the financial impact, there are operational challenges—lost productivity, retraining, and even cultural disruption. When you factor all of that in, it’s almost always more effective to retain employees than to replace them.
Many small contractors rely on raises or bonuses. Why aren’t those enough in today’s labor climate?
Those types of compensation have become expected, and often they’re not structured in a way that actually drives behavior.
We believe compensation beyond base pay should be tied to incentives that align employee interests with the business. It creates a “when we win, you win” dynamic.
Too often, bonuses are given without clear structure—what we’d call entitlements. If employees don’t understand how their actions impact their compensation, those programs don’t really motivate performance.
Equity-based incentives, on the other hand, grow in value as the business grows. They provide clear feedback and also help with retention since they’re typically long-term.
How can tools like phantom stock or profit sharing help small contractors compete with larger companies?
Large companies and private equity-backed firms are already offering these types of incentives. If smaller contractors don’t, they’re at a disadvantage.
We see it all the time—key employees leave because they’re offered equity elsewhere. These tools help independent contractors stay competitive and keep their best people.
What misconceptions do business owners have about offering equity or incentive programs?
Two big ones: timing and complexity.
First, many owners think they’re too early to implement these programs. In reality, the best companies start from the beginning. It’s much easier to be proactive than reactive.
Second, there’s a belief that these programs are too complicated. Historically, that may have been true, but today they can be simplified so both owners and employees clearly understand how they work.
What should contractors consider before relying on recruitment to solve labor shortages?
They should start by looking inward—specifically at their culture.
The most successful businesses I’ve seen have strong cultures built on clear communication and transparency. If employees are leaving, that’s often a sign something internally needs to be addressed.
Hiring alone won’t fix that.
How can owners reward employees while maintaining control of their business?
That’s where alternative equity comes in.
Unlike traditional equity, which can involve ownership stakes or voting rights, alternative equity is typically cash-based. Employees can benefit financially like an owner without actually gaining control of the business.
It’s a way to align incentives without giving up ownership.
Looking ahead, how will retention strategies shape the trades over the next five years?
I think we’ll see a resurgence of strong independent contractors.
As more tools and strategies become accessible, smaller businesses will be better equipped to compete with larger organizations. That will lead to less workforce churn and more stability.
Top talent will increasingly stay with companies that offer strong culture, clear incentives, and long-term opportunities.
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