Electrical contractors are increasingly turning to incentive pay (IP) programs as a strategic tool to attract and retain skilled union electricians amid labor shortages and demanding project schedules. This study, conducted using industry interviews, a nationwide survey, and project case analyses, finds that incentive pay can deliver short-term benefits in manpower and productivity but comes with significant long-term challenges and costs. Contractors reported that, while incentive pay helped fill immediate labor needs on large projects (such as data centers and industrial facilities), its effectiveness diminished over time as workers became accustomed to the increased pay. When incentives are removed, morale can suffer and turnover concerns increase, underscoring the need to manage these programs carefully.

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