The Importance of Progression Planning and Retaining Human Resources Within Hong Kong Construction Organizations - Essay Example

 The Hong Kong construction industry has been facing acute labor shortage particularly skilled labor and professional talent. Overall the number of workers in the sector has declined between 2000 (83, 924) and 2009 (51, 944) (Kui, 2009). One of the reasons for a declining workforce is the lack of training and retention strategies adopted by constructions firms – both in the public sector and the private sector. This is in addition to a multi-layer non-value adding subcontracting system prevalent in Hong Kong. The prospect in Hong Kong is enormous with massive infrastructure projects coming up but projects in Macau and China have been more attractive to workers. Macau has a large demand for construction workers because of the opening up of the gaming industry with a record 10,000 Hong Kong construction workers being employed in Macau in 2008 (Kui, 2009). China has been employing Hong Kong surveyors, architects and engineers extensively. The relocation of construction talent to China and Macau is due to the opportunity to work on high-profile, large and iconic projects at these destinations (Sito, 2014). Apart from China and Macau, Singapore and Malaysia have also been competing for skilled engineers based in Hong Kong (Chan, 2012). The manpower needs in the sector in Hong Kong is expected to grow at 1.9 percent annually by 2018 (Kao, 2013). However, Hong Kong has not demonstrated change in the use of technology in the sector while safely and quality continues to be an issue (Kui, 2009). This has impacted the local labor market in Hong Kong as higher incentives and pay structure have become essential to attract talent in the industry. Major construction projects such as railways and housing have been conceived but the retirement of the ageing workers and the reluctance of the younger generation to join the industry are some of the other challenges for the sector in Hong Kong. The Royal Institute of Chartered Surveyors has released a statement in February 2014 that skilled shortage in the Hong Kong construction market is high among quality surveyors, bricklayers, carpenters and joiners (Sito, 2014). Despite technological changes the Hong Kong construction industry continues to be labor-intensive and crafts based (Chan et al, 2005). This poses a challenge to the sector and hence strategies such as progression planning and strategies to retain talent have become critical to the sustainable of the sector. The Hong Kong Construction Association (HKCA) reveals that 68 percent of the workers in the industry is over 40 years old, 43 percent over 50 years and 10 percent over 60 years with only 13 percent being under the age of 30 (Chan, 2012). This clearly indicates that the construction companies are facing hurdles in attracting and retaining young and talented staff. The reasons include the nature of construction work, safety, wages, progression planning, market competition and lack of teaching staff on construction subject at local universities. The industry faces issues of “difficulty and dirty” but according to the Secretary of Labor and Welfare these issues can be overcome by strengthening the industry training qualities, and enhancing the professional image of the sector. One of the ways to do so is to give the prospective candidates the assurance that there is opportunity for career progression. Once progression planning as a strategy is adopted, chances are employee retention would increase in the sector. However, safety is also another major issue which deters people from entering the industry. The Hong Kong construction industry has been facing recruiting and retention of staff since 1987. The unstable nature of employment and poor working conditions have kept people away from this sector (Wong, 2006). Besides, the construction companies focus more on short-term profits than on nurturing human assets (Leung, Chan and Yu, 2009). Labor in the sector was imported from neighboring countries but with the pace of technological change in the industry, importing labor is not a solution (Wong, 2006). The demand and supply balance require a planned approach to retaining human resources within the sector. The construction industry is critical to the economy of Hong Kong as it influences the final flow of goods and services in the country. Ng, Skitmore and Sharma (2001) contend that the causal nature of employment in the construction industry makes planning human assets requirements a vague exercise. This is because the industry has fragmented nature of operation and is susceptible to economic fluctuations. Besides, human resources in this industry are highly mobile and recruited on project basis which results in low productivity, high labor turnover and reduced motivation to train and plan for the future. Given that Hong Kong has several major railway and housing projects in the pipeline, it has become a strategic imperative for the sector to take initiatives to focus on issues that could attract, motivate and retain employees within the industry. Stress in the sector is another deterrent which is likely during the pre-construction, construction and completion stage. Construction projects are limited in time and scope, and involve multiple stakeholders of which the role of construction project managers (CPM) is critical as they are responsible for achieving project success. They are required to be proficient in diverse skills such as scheduling, cost control, negotiation and social ability, organizing human resources, budgeting and even forecasting probable difficulties (Leung, Chan and Yu, 2009). With such multiple responsibilities they encounter stress not only in managing these tasks but also due to the deviation between their actual abilities and expected abilities. Leung et al identified four stressors of which physical stressors to be the critical factors and hence recommend a comfortable work environment which should include efficient lighting and maintenance of optimum temperatures. Space management with privacy, efforts to minimize noise are some of the other suggestions that can help combat stress among the CPMs. Apart from the work place, personal home environment, if congenial can also help reduce stress. Organizational stressors such as career-developing environment also help to reduce stress. CPMs should be allowed a platform to discuss their work overload or any other work related issues freely which helps reduce task stress. The construction industry is a hazardous industry and this could dissuade people away from the sector. To attract and retain workers in the sector the Hong Kong government has taken initiatives to improve the safety performance of the construction workers. The Pay for Safety Scheme (PFSS) is an effective system widely adopted in the public works contract (Chan, Chan and Choi, 2010). This was launched by the government in 1996 and the accident rate and fatality rate of public sector projects have decreased considerably. This has led to increases safety training, enhanced safety awareness, improved safety commitment and the initiative to develop safety management system. Thus PFSS could serve to attract workers in the sector particularly because the government in the largest employer in Hong Kong (Chiu and Levin, 2003). The Hong Kong construction industry could benefit by following the human resource practices of other countries. For instance, in the UK, the government policy emphasizes the role of skills and development and training as a strategy to enhance productivity (Abdel-Wahab et al, 2008). However, the authors find that despite overall increase in qualification attainment levels and increased participation in training, training was not consistently associated with improvement in productivity performance. This suggests that it is not merely the training but the utilization of skills that can enhance productivity. Motivation of labor is a critical factor that impacts productivity. Abdel-Wahab et al suggest that the construction industry should try to evaluate other factors such as work organization and management practices that could help the construction industry progress. Tabassi and Bakar (2009) contend that a forceful human resource management system is the most valuable asset of the current century construction companies. The authors evaluated the training and motivation methods in HRM practices in the construction sector in Iran. The authors emphasize that unskilled labor can impact the quality of construction projects. Similarities persist in the construction environment in Hong Kong and Iran such as lack of government support in training construction staff, poor wages, and workplace stressors such as poor workplace environment. In fact a congenial work environment can enhance innovation and personal commitment because this would include strategies such as workers’ participation, recognition, motivation and encouraging them to participate in training programs. Other strategies to enhance motivation should include ongoing performance measures, training need analysis and then availability of effective training and development programs. Wages have been rising in Hong Kong but this impacts the overall project cost. Thus Hong Kong now ranks as the sixth most expensive construction market in the world but due to labor shortage it is unable to cope with the projects at hand (Chan, 2012). However, the pay in the construction industry in Europe is 500 euros per day which is much higher than their local counterparts. In Hong Kong the mediocre pay and the lack of safety measures is not sufficient to attract young talent. A salary rise could perhaps help enhance the image of the industry. Young workers are also “afraid of hard work” and are reluctant to join the construction industry for a mediocre pay when they can get a job as a security guard for much higher pay. The government needs to focus on enhancing the training and skills development for the sector through programs at the universities with the assurance of career progression in the sector. The trade’s traditional apprenticeship needs government support (Kao, 2013). For instance, technical engineering courses have been reduced in Hong Kong which has impacted the supply of qualified construction engineers. To develop planning to meet the shortage of skilled labor in the construction industry, Ng, Skitmore and Sharma (2001) suggest implementation of human resources information system (HRIS). They suggest that this is an effective means to cope with the problems of human resources because HRIS would enable constrictions firms to access reliable and accurate information on human resources required for the projects. Ng et al found that the HR activities can be grouped into seven major functions - project management and control, strategic planning, review and analysis, employee profile, employee performance, human resource development, payroll and accounting support, and information systems outside the company. This study was conducted in Australia and hence the HRM priorities may differ across countries because of cultural differences but having an information system in place could help firms to identify labor and plan their requirements particularly because the firms would be able to access information on employee performance, training and development activities. The Works Bureau of the Hong Kong SAR Government has taken some initiative to develop a model wherein information about construction employees could be recorded and easily accessible by construction companies (Chan et al, 2006). This model is based on the labour multiplier approach where relationship is derived between the number of workers required and the project expenditure during the project duration. Such labor-demand estimation can provide helps in manpower planning. The construction companies cannot afford to ignore the need for progression planning and retaining workers in the sector (Young, 1990). Thus, a career progression plan should be developed based on the needs of the individual and the organization. A concerted effort by employers is essential is necessary and this should include career development programs. The workers should be willing to accept responsibility for their professional development and hence be willing to acquire the necessary skills and knowledge. The individuals would first need to be aware of their strengths and weaknesses which would help him to set, monitor and attain goals. They may need assistance to evaluate that their goals are realistic and attainable. The progression of key performers should be highlighted which can motivate the workers. The challenge is not in recruiting enough but in recruiting the right people (FPL Advisory Group, 2009). This is because Hong Kong has initiated massive projects that require high level of sophistication in handling them. In general in Hong Kong it has been observed that managers may not be assessing the right traits and hiring the right candidates, which suggests that better selection strategies should be adopted by the HR professionals (Moy, 2006). With increasing complexity there is a demand for outstanding general managers. Construction companies now focus on creating value for their customers and hence they seek to leverage the talent, skills and experience of their employees (FPL Advisory Group, 2009). Customers evaluate the competency of the construction company based on their experience and the quality of people. Even if a firm is able to attract talent through image building, retaining talent is essential to maintain costs. To avoid employee turnover one of the ways is to develop employees through on the job training, through formal educational programs and through mentorship initiatives (FPL Advisory Group, 2009). Another method to retain talent is to provide career path especially for the strong performers. Communication between management and employees should be effective and ongoing and compensation programs should be fair. The career path should be clearly defined and communicated during the recruitment process. Professional development opportunities should also be communicated. Training should not be considered a cost to the company but an investment for the future (FPL Advisory Group, 2009). Mentorship is an important part of employee development. The professional development mentor should be someone other than the immediate manager as employees may hesitate to discuss with their immediate managers. Recognizing people and giving them a voice they are able to create a more satisfying work environment. It is thus evident that several factors are responsible for high employee turnover and low attraction for the sector. These include factors such as high level of stress, causal nature of employment, safety issues, lack of motivation, low pay structure, lack of training and low government support. If the overall performance of the construction industry has to improve it has to be a strategic imperative to nurture and retain a workforce that is capable of, and committed to delivering high quality construction products (Wong, Chang and Chiang, 2006). The workforce needs the necessary guidance and training to recognize the immense potential that the industry has. They would then be willing to accept new challenges provided they are given opportunities to develop core competencies. A collaborative effort of the construction firms, the training institutions and the government is essential to nurture workers in the sector. Appropriate training programs can be developed when training needs are identified. Planning of construction skill training is the key to meet the demand of workers in the sector. Once workers feel valued and cared for, if they are assured of career progression in the sector, they would be willing to enter the construction industry. Best practices from other countries should be emulated in Hong Kong such as the HRIS which gives comprehensive information on the availability of talent and experience of the people. Hong Kong currently has several prestigious projects and hence with higher wages and other benefits, it can compete against China and Macau in attracting and retaining workers. References Abdel-Wahab, MS. et al, 2008. "Trends of skills and productivity in the UK construction industry. Engineering, Construction and Architectural Management, 15 (4), 372-382 Chan, APC. et al. 2006. "Forecasting the demand for construction skills in Hong Kong." Construction Innovation, 6, 3-19 Chan, DWM. Chan, APC. and Choi, TNY. 2010. "An empirical survey of the benefits of implementing pay for safety scheme (PFSS) in the Hong Kong construction industry." 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"An integrated approach to career development in the construction industry." The Chartered Institute of Building Read More