Labor Market Characteristics
Discuss About The Key Challenges In Attracting And Workforce.
Recruiting and retaining employees is often an objective of many companies in various industries. Human resource is an asset that companies value as they drive the company towards achieving their goals. Having in place thus, an able and functional human resource department that manages the human capital is important (Ramanigopal et al., 2018). The human resource managers manage the workers to achieve the goals of the company. The construction industry is faced with many challenges owing to the nature of the operations they conduct. The lack of elaborate system for the management of its human resource contributes to its challenge of attracting and retaining workers. Other factors compound the problem, some of which may be beyond the control of the individual companies in the industry. The construction sector is faced with the problem of attracting and retaining a skilled workforce. In addition, this sector faces high employee turnover. This essay brings into focus these problems and their causes.
The construction industry is one that contributes significantly to the economy. It has three sectors, that is, infrastructure, industrial construction and real estate. Several industries including ones for manufacturing are connected to the construction industry. For example, (Siew, 2014) cement manufacturing is directly related to this sector. This industry is labor intensive where many people, skilled and unskilled are employed. It is ironical that an industry of this size should have an expansive human capital and lack a framework for its management. However, it is important to note that construction industry is cyclical. The industry undertakes projects that have a limited period hence the cyclical nature. Management of labor in the construction industry raises concerns as the various companies endeavor to attract workers as well as retain them. The construction industry is faced with a shortage of workers that are skilled.
The labor market characteristics pose challenges for the industry. In Europe especially, the labor market is characterized as being inflexible as opposed to the United States. An inflexible market is characterized by the high rates of unemployment and employment, and low mobility of workers. The industry has trouble in acquiring employees that are skilled. The construction industry employs both skilled and unskilled workers. However, the quality of work reduces when the unskilled workers are employed. Phua (2012) explains that employing unskilled workers reduces the quality of work. Various companies employ the use of technology that employees may not have knowledge to operate. (Raja et al., 2013) supposes that that the use of sophisticated technology can be responsible for the lack of unskilled labor. In addition, the construction companies may not have the workers trained on their use so that adoption of technology becomes a problem. The labor policies in a given country can influence the employment rates.
Quality of Work
Labor policies can have an effect on the decisions to hire workers in the construction companies (Chang-Richards et al., 2017). Where the regulations are stricter, construction companies may be forced to hire unskilled workers. The laws tend to protect laborers who may not have enough advantage for employment. On the other hand, where the regulations are not enforced, companies tend to hire more skilled employees as opposed to those with little skills. Strict labor regulations pose a challenge in the construction industry especially when the different companies compete for skilled labor. Large and mid-sized companies usually have the upper hand in obtaining a work force that is skilled compared to small sized companies. Skilled workers produce quality work as opposed to workers that do not have enough skill or experience. Thus, small sized companies in this industry face stiff competition from larger firms. The level of education has an important role to play in the level of skills that workers may possess.
In many countries as Wilkinson, Johnstone & Townsend (2012) explain, the number of workers that have education qualifications for construction work is low. Some workers learn through their superiors through apprenticeship. This produces workers that have low skill and are less productive. Employees are not few at the level of laborers but also in the management positions (Windapo, 2016). It is important to mention that low education may not be the only reason as to why there is a deficit in top management positions. With workers that head towards retiring due to old age and competition for qualified workers intensifies, the construction industry faces a steep challenge. In Australia for example, competition for experienced workers is set to increase by 1.2% in the next twenty years. According to Simion-Melinte, Jiroveanu & Lungu (2015), laborers specialized in various fields of construction and managers for the same are lacking. For example, construction companies lack top management positions some of which are responsible for supervising other workers. Skilled laborers such as carpenters, welders, craft helpers, plumbers, and heavy machine operators among other are in short supply. The deficit creates competition for the workers thus. As mentioned before, the small sized companies are usually shorthanded when it comes to acquiring skilled workers. As far as education of the workers is concerned, their choices for career paths affect their availability.
Graduates from tertiary education have various career choices in the field of construction at their disposal (Arashpour, & Arashpour, 2010). The choices in their careers are dependent on several factors. For example, the more the career is promising for personal development; the graduates are likely to follow its path. In addition, the incentives given by various companies’ influences the decisions to take up various career paths. The entry levels in the construction companies are the apprenticeship and training levels. These positions have reduced in various companies due to a number of push factors. For example, some companies may source labor from different countries who can earn far less than the laborers from the local market. In Australia especially, the decline in apprenticeship levels have declined thus creating a deficit in obtaining skilled laborers. The choice of replacing apprenticeship with outsourced laborers can be influenced by the changes in the economy.
Education
Recessions affect the construction companies significantly so that they pose difficulties in acquiring workers. The construction sector is cyclical in nature as they undertake projects that have a limited period. (Sedighi, & Loosemore, 2012) makes an observation that construction companies face significant challenges in acquiring workers after recessions in the economy. Costs for materials, overhead costs, architectural and designs costs hamper and exert pressure on the construction companies. The costs of labor after recession are also high so that the industry faces more challenges. To account for shortage in labor and the high costs for its acquisition, many companies resort to outsourcing or hiring low skilled workers. This decision is consequential to the projects they undertake and future recruiting of employees for other projects. Owing to the cyclical nature of the industry and other internal factors, construction finds difficulty in retaining workers. It is common that the construction sector experiences high employee turnover.
After recession, the construction companies scramble for survival due to the inflated costs of resources they need to conduct operations. The companies may seek to cut on costs from various fronts. Mostly, the cost cutting ends up in the human resource, which in turn affects the endeavors of the company to attract skilled workers. Some major companies may take on a hard attitude towards the workers so that their image dwindles and are less likely have skilled workers. The method in which the construction companies handle the employees determines whether the workers look for alternatives or retain their employment. Inevitably, construction companies are plagued with voluntary termination of employment by workers and replacement of the same with low skilled workers.
Workers in the construction sector experience challenges that force them to consider other employment alternatives (Kashmoola, Ahmad & Yeoh Khar, 2017). Workers quitting on their own accord and having others to replace them creates problems for the companies. The problems become significant when the employees that quit have no replacements. The competition for the skilled workers in this case only worsens the situation for companies in this sector. The labor market being inflexible in many aspects contributes to the piling problems of labor experienced by companies. The employee turnover is based on the fact that workers are dissatisfied with their work or conditions of work. Generally, Seresht and Fayek (2015) explain that the grounds for employee turnover are complex as opposed to previous thoughts on the same. Seresht and Fayek (2015) theorize the possible grounds for employee turnover.
Competition for Workers
One of the reasons of employee work termination according to Seresht and Fayek’s (2015) theory is shock. Shock in this case can be negative, positive or neutral. Employees can influence each other on whether to seek other employment alternatives or maintain their current positions at work. An employee that chooses to terminate employment and announce to fellow workers is likely to influence others negatively. Other employs may reconsider their employment, the benefits or lack thereof that may cause them to quit as well. Usually, after consideration of the conditions of work and their position, employees can plan to quit planning to quit follows after shock. The theory elaborates a chain effect from shock where image violation comes after shock and planning. Image violation relates to how the employee views their goals and career objectives in alignment with the goals of the company. Usually, companies in different industries choose to place goals that share in the goals of the employees. This brings about commitment and trust and brings the idea of “playing on the same team.” Workers may be triggered to evaluate their position and goals in the company they work for. When the goals of the company do not match those of the employees, most seek alternatives. As employees or workers experience low satisfaction for their jobs, most tend to look for other employment opportunities (Chheda & Patnaik 2016). Usually, the workers move to other construction companies that have goals similar to their own. Skilled workers are more likely to conduct this evaluation.
Skilled workers including those in supervisory roles have qualifications from institutions of higher learning and are likely to have aspirations (Jensen, 2018). Mostly, these workers seek self-improvement in their career. When there is of lack opportunities to enhance their skills through learning, the skilled workers look for and find alternatives. This may explain the shortage of skilled workers in the construction sector. Currently, many companies seek to become one of the alternatives the workers look for through making changes in the priorities as well as goals. To improve competitiveness in market, companies in the construction sector face the challenge of adjusting their objectives so as to attract skilled workers. The lack of proper management of the human resource in the construction industry contributes to challenges in attracting and retaining workers.
The construction industry is characterized by lack of a proper management for the human resource that is full time employees. Usually, some companies opt to employ the services of human resource companies to manage the employees (Tabassi et al., 2017). Outsourcing of these services is consequential to the recruiting and retaining of workers, external parties may not have a full understanding of the workforce in the construction sector. In addition, the limitation of the period of the projects poses a problem where the management may not be able to create a system for employees that are permanent. Human resource management is important as it determines the recruitment of employees and retaining them. Having a stable human resource department can significantly improve the performance of the various companies in the industry. Human resource management involves training and monitoring of the employees throughout the process. The human resource management does not tap into its full potential in providing hospitable working environments for the construction workers (Pai, Dheeraj, Kristam, 2013). Had the construction companies employed a stable department for the management of the human resource, the problems of sourcing for labor would be diminished. Construction companies may face the challenge of recruiting and retaining workers as they plan not to do so in the first place.
Cyclical Nature of the Construction Industry
Lack of planning is planning to fail. The construction companies do not have a system in place that well elaborated to cater for the workers. An elaborate system would mean a method of recruitment and a benefits scheme in place to retain the workers. It is common that construction companies lack this aspect in place. As mentioned earlier, the lack of a human resource management that understands the workers is responsible for this deficit. Although the construction takes place in a limited period, it is possible to create a system where the employees can be retained (Hamzah et al., 2011). Having an in-house Human resource department will cater for the needs of the workers in alignment with objectives of the company as opposed to outsourcing. Conclusively, lack of proper management of human resource leads to lack of commitment from the workers.
Job dissatisfaction can be in part due to lack of incentives from the company. Like many workers in different industries, employees require security for their jobs. Also, added benefits such as healthcare, pension and others the pull factors to retain employment. However, most construction companies may not have an elaborate scheme that caters for the needs of the workers. Some companies, especially the large and mid-sized companies do not take into consideration the needs of the employees despite there being a human resource department that caters for their needs. On occasion, some of the benefits may be removed so that workers are more aggravated. Often this leads to strikes that hamper the activities causing delays in the construction proves. An example of large sized company is Caterpillar Inc. that has subsidiaries globally. According to Bruno Van der Linden and Dor (2011), the company prioritizes profit over the welfare of the workers. In some instances, the company strips off pension benefits of the workers to cut back on losses during difficult times in the economy. Even with the striking employees, the company continues with its operations by employing other employees who can perform the same activities for less. This attitude and stand towards employee management causes the workers to seek alternatives. Skilled workers are carried in the bulk of migrating workers thereby creating a challenge for the company.
The construction sector is cyclical where companies take on different projects or operations that last for a given time and begin others after the end of the preceding ones. The construction industry has various fields such as the infrastructure and others. The industry is faced with shortage of skilled labor so that recruiting them becomes a problem. There is competition for acquiring of skilled labor in the market. The lack of skilled labor in an influence of the career choices of the graduates, use of new technology with little adoption of the same, and recessions in the economy. The industry faces employee turnover at high rates. The employee turnover is due to lack of an elaborate system of management of the workers and employee consequential dissatisfaction with their employment.
Cost Cutting and Employee Retention
Reference
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