Worker Shortages in the Construction Industry - Essay Example

Worker Shortages in the Construction Industry Worker Shortages in the Construction Industry Writer’s Name Institution Name Worker Shortages in the Construction Industry The construction industry is one of the largest and most diverse industries in U.K. The industry not only provides employment to large numbers of workers but also has far-reaching effects on the economy of regions across U.K. (McQuillan, Conti and Hoffman, 1999) Matt Nichols, business development director at construction firm Wolseley UK wrote in Accountancy Age that, “It is one of Britain’s biggest industries, contributing 10% to the UK’s GDP and employing over two million people" (UK builders urged to 'embrace change', 2005). Therefore, it is a highly diverse, fragmented, and fiercely competitive capital-intensive industry. The long-term health of the industry is largely dependent on the state of the nation’s economy. However, the future health of the construction industry may very well depend on its ability to anticipate, shape, and respond to key issues, challenges, and opportunities (construction, Industry Studies 2000). The shortage of skilled labor, including craftsmen, engineers, and managers, is the most daunting challenge to the construction industry. It is estimated by the Construction Industry Training Board that the industry needs 88,000 recruits every year for the next five years to meet its needs (Millar, 2005). If the current shortfall continues, it will eventually sap the industry’s strength and productivity, constrain its growth, and drive up costs. According to Vicki Preacher and Gregory Reaves, there are many reasons why the construction industry is experiencing, and will probably continue to experience, a labor shortage in both blue- and white-collar positions. The prime causes for the construction workers (skilled, unskilled and supervisory staff) shortage were given as a combination of: The root causes of workers (skilled, unskilled and supervisory staff) shortage are: Aging of the Workforce and Potential Skill Shortage Low pay Physically demanding work Poor image Poor environment Greater competition from more attractive industries Transient nature Lack of training Technology Multi-skilling Current policies for recruiting new entrants Aging of the workforce in construction was consistently identified as one of the most pressing problems facing the industry. Many of the workers who entered the workforce in the late 1950s or early 1960s are now fast approaching retirement and the numbers of new recruits do not match the numbers retiring. Hence, this causes potential lack of highly-skilled and experienced individuals in the industry (McQuillan, Conti and Hoffman, 1999). One interviewee noted that construction is "a young man's job due to tough physical labor, mobility and the sporadic nature of the industry. Older workers (40-45) tend to move on to jobs in manufacturing and industry". The physical demands associated with employment in the industry make working in construction increasingly difficult with age. Therefore, McQuillan, Conti and Hoffman (1999) say that the "age at retirement" for this sector is lower than is commonly the case in other industries. On the other hand, in today’s high-technology world, the thought of physically demanding work performed in harsh and hazardous conditions with little chance of advancement has very limited appeal (Preacher and Reaves). Some jobs, such as roofing, are so physically demanding that relatively few workers may be likely to spend their whole careers at this type of work. Given a booming economy, workers are opting for higher paying, more stable, and physically less intense work. At the same time, construction work is thought of only in terms of a back-breaking, dirty, low-level job performed by unskilled, uneducated people. This image motivates parents and high school guidance counselors to guide young adults away from the construction industry toward college and what they consider to be more glamorous work (Preacher and Reaves). Also contributing to the labor shortage is a poor overall training system. According to Preacher and Reaves, construction skills cannot be learned in a classroom alone; they are acquired through a combination of on-the-job training and classroom instruction. Unfortunately, there is no structure in place for quickly and effectively training those who do enter the field. In a survey of training methods in the industry, it found that only one third of construction trainees complete their apprenticeships and that 40% of companies that provide training to the sector are “inadequate” (Bentley, 2005).  Adding to this problem is the fact that vocational training in high schools is practically nonexistent, and there are too few nationwide training programs to turn out a substantial number of skilled workers (Preacher and Reaves). Thus, the construction industry’s image problem and today’s booming economy further complicate the training problem by drawing more educated workers away from the construction industry. One more factor is the high level of mobility in the construction industry. Interviews with workers and employers indicated that steady employment often requires that workers and contractors service areas outside of the local region. This is critical because it suggests that local economic trends may have more to do with where people work rather than whether they work ((McQuillan, Conti and Hoffman, 1999). Hence, for those who are older and have family commitments, or for whom constant travel is undesirable prefer regular employment in manufacturing or related sectors. There is also seasonality in the construction work such as seen in the heavy construction sub-sector (road building) as concrete and asphalt cannot be laid in the winter months. The residential sub-sector is also highly seasonal, unless there is an exceptionally high demand for new housing. Hence, this causes seasonal unemployment in the industry. This has the effect of putting construction at a competitive disadvantage when recruiting skilled workers in a number of trades, particularly those who are able to seek work in the manufacturing sector (McQuillan, Conti and Hoffman, 1999). Construction Industry Institute study shows that 75 percent of contractors are experiencing labor shortages that cost them time and money. Home builders alone are reporting that it takes 3–6 weeks longer to build a house today than in 1998 because of the worker shortage (Preacher and Reaves). The shortage of skilled workers is also threatening the quality of construction, as inexperienced apprentices tend to make more mistakes requiring correction. A second cost of the skilled labor shortage is the increase in on-the-job injuries. These injuries further compound the labor shortage (fewer able-bodied workers) and drive up workers’ compensation costs (Preacher and Reaves). Therefore, to overcome this problem, Initiatives taken includes (Keith Byrom, 2003) Motivation programs Incentives High performance work teams/worker empowerment Overtime/expense pay Training programs Vocational schools Information technology use Career path improvement Industry image improvement Benefits Recruitment According to Preacher and Reaves, the first step that the construction industry can take to mitigate the labor shortage is to try to attract more and better qualified people. In conjunction with unions and nonprofit organizations, companies should begin an aggressive campaign to court nontraditional workers, such as women, Aboriginals, immigrants and minorities, for the traditionally white male skill trades. Research shows that refugees have a huge range of skills and that most are highly motivated to find work. Yet they find it tougher than other minority communities to find jobs that match their skills. Also women are more hardworking, sincere and responsible enough in their work; hence, they are the key to filling skill gaps (Woolnough, 2004). Other then this, the industry must enhance its image; by highlighting the skills needed to become premier craftsmen (Preacher and Reaves). Companies can promote the idea that people are their most important asset by building compensation and benefit packages that emphasize this. In the past, unions provided stability and job security for workers who traditionally had little company loyalty and moved from job to job. With the decline in unions, this institutional stability has been weakened. So Companies must work with government, unions, and schools to beef up local and national training facilities and make long-term commitments in education and training (Preacher and Reaves). Today’s generation, along with educators and parents, must learn to see construction as a career, not just temporary seasonal work. The US Government has a vested interest in ensuring continued strength and competitiveness of the construction industry, given its contribution to the national security. The basic infrastructure of the nation is rapidly aging and needs major investment for repair and replacement (construction, Industry Studies 2000). Federal, state, and local governments need to recognize the seriousness of this problem. Privatization should be viewed as a viable alternative to more traditional forms of government control, as it provides opportunities for funding major projects at a lower cost. The government should also increase, where appropriate, the use of the design–build approach for project execution, as it is proving to be a cheaper and faster way to complete construction projects. If the costs of construction are brought down, workers can be offered better benefits and bonuses (construction, Industry Studies 2000). The government can help enhance vocational training programs throughout the country in partnership with industry, unions, and schools. It should also continue to support and fund the School-to-Work Opportunities Act that provides federal funds to vocational school programs, which provide apprentice-like training. The government should adopt a more systemic national approach to training and reaching out to youth through awareness and education about construction trades. Michael Brown, BIOC deputy chief executive, said urgent attention is needed to attract more young people into the industry (Millar, 2005).  A positive area in the skilled labor market continues to be the large number of universities offering excellent training for careers in engineering and other construction-related fields. The Federal Government can help meet the growing labor demand in the construction industry by streamlining the lengthy and cumbersome visa process. The industry is in a dire need for improvement of its image to be valued by both potential work force and potential clientele. Employees should be offered permanent jobs with competitive and stable salary structure. The seasonality of the workload should not negatively affect the compensation, in fact extra benefits should be offered for over-time. The U.S. construction industry will have to recognize that construction delivery is no longer viewed as simply constructing a “facility,” but rather as creating long-term value for an owner (construction, Industry Studies 2000). Clients increasingly expect the builder’s commitment to encompass the entire life cycle from financing and design to construction and operation. This will help the industry to strengthen itself and provide better benefits to its employees and valued service to its clients. Information technology tools enhanceInformation technology tools also enhance business processes in the areas of communication, design, project management, and training. Though the industry is already using construction and design software, information technology must be put to a widespread use (construction, Industry Studies 2000). Project management software should also be applied and the use of information technology should be emphasized to streamline and better monitor projects as this has the potential for tremendously saving costs and time. is applied to resource management business processes during the construction phase to manage labor allocation, material usage, and cash resources. The use of information technology should be emphasized to streamline and better monitor projects. This has the potential for tremendously saving costs and time. Information technology holds great promise as a means of increasing construction industry productivity. In short, the industry should improve its image to attract more skilled labor. It needs to take steps that reduce the costs and improve productivity and then only it can meet the growing demand. Bibliography Bentley, Ross (2005) “Construction workers at risk” “Construction”, Industry Studies 2000, Available from Millar, Michael (2005) “Construction industry faces continuing skills shortage” McQuillan, Kevin and Conti, Angela and Hoffman, Jennifer (1999), “A report on Employment Trends in the Construction Industry: London, Middlesex, Elgin, Oxford, Huron, and Lambton”, Human Resources Development Canada and the London HRCC, Preacher, Vicki and Reaves, Gregory “Construction”, Industry Studies 2000, available from UK builders urged to 'embrace change' (2005), Adfero Ltd Read More