Employee Resourcing in the Construction Industry

Strategic Considerations and Operational Practice

Ani Raiden, Andrew Dainty, Richard Neale

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781134195404
• Edition: 1
• Topic: Tecnologia e ingegneria
• Subtopic: Ingegneria generale

Construction is one of the most challenging industrial environments for effective people management. It is characterised by geographically dispersed projects, production-oriented management styles, long working hours, high levels of staff turnover and employment practices grounded in the traditional 'personnel' paradigm. The employee resourcing function – recruitment, selection and deployment – is largely reactive and intuitive, and fails to draw on the longer-term benefits of strategic human resource management (SHRM).

This book explores the challenges inherent in employee resourcing in-depth. It provides insights into the strategic considerations and operational approaches adopted by large construction organisations in deploying their human resources. It presents an improved framework for informed SHRM-style decision-making derived from an extensive study conducted within eight major construction organisations. This book provides a valuable resource for both students and practitioners interested in evaluating and improving current organisational practice.

1 Introduction

This book is based on an extensive programme of research undertaken in collaboration with seven major construction contractors in the UK. The aim was to examine the ways in which leading construction companies managed the complex but vital processes inherent in employee resourcing. As a research monograph, it describes some of the major insights derived from this study and explains possible new directions for both practitioners and researchers interested in how to better manage people in dynamic project-based organisations. The main objectives of the book are to provide the readers with the following:

• a comprehensive review of current HRM principles, procedures and practices, and their potential application to construction companies;
• a framework for implementing a strategic approach to HRM.

This book is not so much about developing new ways of working, but focuses on drawing out and synthesising promising practices used by different organisations grappling with the complexities of balancing their short- and longer-term employee resource needs with the personal development goals of their employees. It attempts, therefore, to bring together the elements of effective people management evident in company practices, but through doing this it seeks to develop new ways of overcoming the traditional constraints which have adversely affected resourcing practice in the past. The suggestions made are not designed to be ‘best practice’ prescriptions, but possible developments which organisations can mould and reshape to reflect their own unique ambitions and needs. The early part of this book demonstrates that such strategies, supported with appropriate information technology, can bring substantial benefits to the satisfaction, motivation and well-being of employees as well as significant savings on costs, and thus, return on investment for the business. The hope is that, by the end of this book, readers will see that realising such benefits is also possible within construction organisations.

The book addresses both strategic considerations and operational aspects of the people management function as applied to large contracting organisations. The text is organised into six chapters. After the introduction (Chapter 1), two chapters examine strategic Human Resource Management (HRM) and the operational aspects of the key HRM functions: employment relations, learning and development and employee resourcing. Crosscutting themes such as work–life balance, technology and flexibility are discussed in relation to the demands of the contemporary construction firm. Chapter 4 presents a critical discussion on empirical evidence gathered from seven large construction firms. This culminates into the identification of five key themes: teams, human resource planning, performance management, employee involvement, and learning and development. These are combined to form a Strategic Employee Resourcing Framework (SERF) in Chapter 5, before conclusions are drawn and future directions for research and practice are articulated in Chapter 6.

1.1 The construction industry people management challenge

Although texts abound on how to manage people at both strategic/operational levels, the extent to which effective HR practices ensure improved organisational performance is far from uncontested ground. Within the context of construction, the complexity and dynamism of the industry’s project-based nature render the applicability of many central tenets of strategic HRM tenuous (Loosemore et al., 2003). It is important, therefore, to firstly examine the nature and context of the sector as a backcloth to exploring how these operational challenges can be overcome by more rigorous practices in the future.

The construction industry is one of the largest and most complex sectors. In fact, it is a very difficult sector to pin down and define, with some arguing that it is, in fact, an amalgamation of several sub-industries (see Ive and Gruneberg, 2000). In a recent report which explored the social and economic value of the industry, Pearce (2003) suggested that there was a narrow and a broad definition of construction. The narrow definition, based around the areas covered by the Standard Industrial Classification (SIC 45), excludes many aspects of what could be considered ‘construction activity’, such as design and engineering services. Taking a broader definition means that construction accounts for around 10% of gross domestic product (see Dainty et al., 2007). Indeed, if SIC categories 45 and 74.2, are considered, then employment can be estimated at around 2.4 million, with a likely increase to 2.8 million by 2012 (Construction Skills, 2008). Thus, the industry is one of the country’s major employers.

One of the key characteristics of construction work is that the demand for its services and products is highly variable, and particularly susceptible to economic fluctuations. This along with the industry’s project-based structure has fundamental effects on the way in which people are employed and managed within the sector. Cherns and Bryan (1984) developed the term ‘temporary multiple organisation’ to describe project organisation in this regard. Projects typically comprise a complicated set of temporary interorganisational relationships, which are themselves governed by project-defined interactions (see Bresnen et al., 2004).

Raidén and Dainty (2006) recognise that, since a key feature of the industry’s output is that the finished product is largely non-transportable and must therefore be assembled at a point of use, construction organisations must set up their temporary organisational structures at dispersed geographical locations, frequently at a distance from central management. Thus, the project team forms the focus of working life in construction, operating with a significant and necessary degree of independence. In addition, the changing requirements of construction work necessitate the formation of bespoke teams each time a new project is awarded. However, the time available between contract award and the mobilisation of the project is usually extremely limited (Druker et al., 1996:407). This renders planning for such deployment difficult.

The fluidity that these characteristics create leads to an unstable employment which necessitates a highly mobile and itinerant labour force. Workers move from project to project, often working as sub-contracted or self-employed workers. This has serious implications for the governance of projects and places considerable pressures on those leading the production effort on site. As Dainty et al. (2007) explain, the reduction in employed labour since the 1970s has left most of the firms at the head of the production effort doing little more than managing the construction process. Hence, it is increasingly important that their site management teams have the right blend of skills and competences in order to ensure successful project outcomes. However, construction companies must balance project requirements with competing organisational and individual employee expectations, priorities and needs. It is the industry’s inability to manage these competing demands effectively which has caused many of the enduring problems for the sector. Finding a solution for overcoming these complexities is the central challenge addressed by this book.

The research presented within this text should be viewed within the context of the prevailing economic conditions, and particularly the tight labour market, which were affecting the industry at the time that the work was conducted. During periods of sustained growth staffing issues are often felt more acutely in terms of demand for new recruits. During a recession, attention inevitably turns to carefully selecting staff who are able to maintain competitive advantage despite reduced workload or tighter financial constraints. Hence, the importance of developing effective strategies for recruiting, developing and retaining high performing staff is not diminished in times of economic downturn; staff retention, development and reward remain fundamental to the competitiveness of construction firms. In times of growth, with staff turnover figures for construction organisations running at 21.7% (CIPD, 2007), the imperative to address reactive HR decision-making is simply rendered a more visible priority.

1.2 The research base of this book

As explained in the introduction, this book is based on an extensive programme of applied research conducted with seven major construction organisations. The aims of the research were as follows:

• to produce a structured and comprehensive explanation of current employee resourcing practices within large construction contractors;¹
• build a framework for the development of strategically aligned management practices for effective staff deployment.

In light of this, initially, the research objectives were to establish key organisational HRM strategies, policies, practices, organisational priorities and project requirements in relation to employee resourcing; and model their current resourcing decision-making processes. Simultaneously, the research sought to establish employees’ personal and career needs and preferences in relation to their deployment. These two data sets were then compared and contrasted in order to establish the compatibility and conflicts between managerial (organisational and project) and employee deployment objectives. Finally, a framework was developed that explains the employee resourcing processes reflecting leading-edge practice within the industry’s larger employers.

The research methodology

Investigation of organisational processes and priorities, project requirements and employee needs and preferences is a complex task, requiring a systematic approach to data collection and analysis if meaningful results are to be achieved. An overall interpretative framework was used; that is, the philosophy of the researchers was to try to investigate the processes, practices and attitudes from the point of view of the companies and individuals involved, rather than to work from the researcher’s perspective. A case study methodology was adopted as an approach to the investigation, because this would yield in-depth information on the reality of the issues. This included one in-depth ‘primary case’ and six ‘supplementary cases’. The study organisations were carefully selected to be broadly representative of leading large UK-based contractors: similar in size, number of employees and turnover. Project-specific case study data were also collected within the primary case study organisation.

Case study organisations

The primary case study consisted of a national contractor, with an annual turnover in excess of £550 million during the research period. In the three years of research, the company experienced rapid growth in turnover, business development and share value. The company activities were distributed among water engineering (34%), rail and highway development (20%), commercial development (19%), education and health (11%) and, to a lesser extent, housing (8%), industrial works (6%) and other smaller projects, such as interior and refurbishment business (2%). Clients within these sectors included both public and private developers.

The company employed approximately 2,100 staff. These were managed in three regional divisions: North, Midlands and South. The regions contained independent operational divisions and smaller departments, each of which served a distinct sector of the market. These divisions and departments operated as individual profit centres. Typical to the industry, the organisation had recently merged with a similar contractor. Chapter 4 discusses the structure and operating mechanisms of the company in detail.

The supplementary cases selected were similar to the in-depth case study organisation in size, number of employees and turnover. Table 1.1 lists the type of participating organisations, their main operating sectors and annual turnover at the time of the research interviews. ‘National contractor’ refers to an organisation with its main base (headquarters) in the UK. This distinguishes case studies A–E from the ‘European contractor’ whose headquarters are located in Europe. All of these organisations have a strong international profile.

Research methods

The research commenced with an in-depth investigation into the existing resourcing process. Interviews were held with HRM staff and senior managers within the primary case study organisation in order to establish the organisational policy and practice in terms of resourcing and staff development. Four project case studies were then undertaken in order to explore the efficacy of historical deployment and project allocation decisions. The composition of teams selected for a range of projects of differing size and complexity (multi-site, PFI, design and build and traditionally procured) were explored and interviews held with both the line managers responsible for the resourcing decisions and with the team members themselves.

Table 1.1 Supplementary case study profile

This was followed by a series of in-depth interviews with other project-based employees in order to establish their personal priorities in terms of career aims and development, project allocation and their wider life-cycle priorities. The interview data were combined using a qualitative data analysis software package, which was also used to construct a model of the existing resourcing process from which strengths and weaknesses could be established. A range of secondary data were collected and analysed in order to inform wider understanding of the existing approaches to the deployment process. These included an analytic hierarchy method questionnaire, which was used to refine a list of factors important to employees when making project deployment decisions; a factor verification questionnaire that confirmed the interview findings within a wider sample; and an assessment of the senior managers’ management style; together with organisational documentation.

Interviews

Altogether 50 respondents were interviewed as part of the primary case study. This included divisional directors (4), senior operational managers (7), specialist HRM practitioners (4) and employees at various levels of the organisation (35). Contact was established with some of these respondents more than once. Respondents within the supplementary cases were human resource and operational senior managers responsible for project allocation decision-making (9).

A bespoke interview schedule was developed for establishing the following:

• the organisation’s HRM strategy, policy and practice;
• the organisational and project requirements;
• the individual needs and preferences of employees.

The schedule provided a fairly loose structure for the discussions and helped to ensure all the topics were covered. However, the aim was not to restrict issues from emerging. Interviews within the supplementary cases concentrated on exploring a range of innovative approaches to the resourcing process. This widened the research perspective beyond the principal collaborating company and, to...