How do you smash your targets and maximize your profits when you are facing inflation and skyrocketing construction costs?  Surely, it’s not the right time to introduce construction bonuses or increase the bonuses you already pay?  But it could be a perfect time!  

Your staff are facing the same inflationary pressures and increasing living costs so they would welcome the financial help through better bonuses.  And it could well set your business apart from many of your less ambitious competitors.

Bonuses to motivate and reward your staff

In a construction business, can you afford to pay your team large bonuses out of your gross margins, on top of their salaries, and still achieve your target profit margins?

In a recent survey in the UK, 69% of staff in the construction industry reported not receiving a bonus.  Of the 31% who said they did receive a bonus, they earned between 0% and 4% of their salary.  We believe you need to be bolder than this.


It may seem scary to implement bonuses, especially if you’ve been trading for some time without them, and inflation is eating into your already tight margins.  We have, however, seen real benefits for our clients when they have introduced them.  Done correctly, the bonuses will be more than covered by the extra profits your team will secure.  This will be driven solely by the extra money your staff will receive in their pay packet.  It focuses its actions on always maximizing profit, and it works!

Without a bonus scheme, will your surveyor or project manager fight for an extra £100 or £1000?  Will they ensure that the site plant has been off-hired or that all costs have been recovered in your client billing?  If they’re not getting anything extra for the effort, why bother?  Conversely, if they know it will mean the project will make more profit which means they’ll get more bonus in next month’s salary, they will fight much harder and look for more ways to cut costs and increase the value that your client is willing to pay.  It encourages your staff to think like entrepreneurs, justify the extra costs to your client and keep costs down.

Balanced Motivators

Don’t get me wrong, there needs to be a balance with the variety of reward systems that you have in place.  There needs to be a healthy feedback channel and a culture where people feel genuinely appreciated.  You must tread carefully with profit share bonuses as it can easily create a culture of greed, but side by side with healthy honest feedback, bonuses will make the biggest difference to the profit margins you consistently deliver as a construction business.

Be careful though, employees can become accustomed to bonuses, and expect them as part of their basic salary.  Therefore, you must be careful to align them directly with business targets so that they are only paid when this month or this year’s targets have been achieved.  They also need to be part of the culture that makes it clear which standards are expected of staff (whether there’s a bonus scheme in place or not).  Staff needs to see that consistent underperformers who don’t buy into the culture, are not a good fit for the team.


Staff can also become demotivated when they don’t hit targets and therefore don’t receive bonuses.  This however tends to highlight the weaker employee’s because the stronger ones embrace the bonus scheme and ensure they are well placed to impact profit and therefore earn the reward.  

Staff not receiving bonuses (even when there’s a scheme in place) tend to reflect the poor overall performance of the business, rather than one individual.  That business should question whether they have the right systems and people.  The right systems and culture will enable your staff to focus on making the business money and therefore earning bonuses.  It’s a positive upward spiral that looks after itself.  

What makes a good profit share construction bonuses scheme?

  • It’s easy to understand and simple to operate.
  • It’s applied fairly across your team, but the level of reward is directly linked to the impact each person has on business profits.
  • For site-based people, the construction bonuses are based on gross profit.  Bonuses are based on net profits for management, admin, and other overhead staff.
  • The bonuses should be paid in a timely manner, for example, quarterly.  Staff needs to see proof that the bonus scheme is real and will pay out.
  • The bonuses must be significant enough to make a difference to them.  Be bold on this, I promise your business can afford it.
  • Only discretionary bonuses should be paid to people who don’t significantly affect the outcome of your projects.  All other bonuses should be linked to measurable performance.

The benefits of having a good bonus scheme

  • You can attract the best candidates for your team.  Why go to a business that doesn’t pay bonuses?
  • You can always rely on bonuses to motivate staff, even if you haven’t got round to giving that feedback.
  • If the business doesn’t hit its target, you don’t pay the bonuses, so you don’t have to worry about the costs.  The costs will only ever be incurred when the business can afford to pay them.
  • The scheme makes it clear what employees’ responsibilities are for the year ahead and the standards that are expected.  Hit those standards and they can see the rewards they will receive.
  • They ensure processes have been followed and all paperwork is in place (e.g. final account agreements) to protect the business against risks.  The bonuses are not paid without these criteria being met.
  • The most successful construction companies have well-defined profit share bonus schemes.  Bonuses = higher net profits.

If you currently don’t pay bonuses, give it a go, you won’t regret it!

Planyard is contractor software that helps ambitious teams smash their targets and accelerate their growth

We provide the systems and expertise to help you achieve your success. Planyard is built around the critical success factors for a growing construction business, by tech experts and accountants who specialize in the construction industry.  We’re on a mission to level up the SME construction industry through our software, systems, and expertise.  Contact us if you would like a trial…