Labour Market Shortages – What’s the Fix?

Resourcing constraints in the construction industry is a hot political issue. Some commentators are questioning how the Government will deliver an additional 10,000 houses a year – and its ambitious infrastructure initiatives – with an already stretched labour supply.

What are the potential solutions to redress the labour shortage issue currently facing the construction industry?

Are overseas workers the answer?

A lack of qualified construction workers has led to the Government seeking to recruit migrant workers to achieve its projections for the Kiwibuild programme and its wider infrastructure goals. Although couched as a short-term solution to alleviating the labour deficit, could this be the answer long-term?

The decision seems related to the publicity surrounding a Chinese construction company’s application for short-term work visas for 200 workers from China to complete the $200 million fit-out of Park Hyatt hotel in central Auckland.

However, it’s not the only construction company looking overseas to address capacity concerns in the sector. A group of private companies and public organisations have joined forces behind a new campaign (LookSeeBuild) designed to lure senior construction professionals from overseas markets.

It is, of course, essential that any foreign workers have the appropriate paperwork to permit them to work in New Zealand (and once here, are afforded minimum employment standards).  Employers recruiting migrant workers who are found to have breached employment standards will face a sanction, be placed on a list of non-compliant employers and face a set stand down period from the ability to support a visa application.

Whilst relying on temporary immigration to fill the skills shortage plugs the gap in the short-term, the industry recognises this is not a long-term solution.  In that context, we must look at what can be achieved locally to attract more people into the sector.

Domestic initiatives

Organisations throughout the industry are pursuing initiatives designed to attract people into training and apprenticeship programmes to meet the growing demand for qualified workers within the construction industry. The Government has actively endorsed this approach, signalling an intention to invest in the trades. For example, under the Government’s ‘Fees Free’ scheme, the first two years of an apprenticeship will be free for eligible participants.

In Auckland, construction and infrastructure employers, industry groups and Auckland Tourism, Events and Economic Development (ATEED) have partnered to promote an interactive social media campaign, #BuildAKL, designed to attract young people into Auckland's construction and infrastructure sector. Its focus is on raising awareness of the number and diversity of roles within the sector, from entry-level positions to apprenticeships and skilled jobs requiring qualifications. It has a particular focus on women who have traditionally been underrepresented in the industry and are therefore identified as an ‘untapped resource’ crucial to filling shortages in the trades.

Another aspect of the campaign is to showcase how technological advancements have broadened the range of roles and expertise required in the construction sector and in doing so dispel outdated myths about working in the trades. It is hoped that will help attract a new generation of talent into the industry who have traditionally seen construction jobs as undesirable.

What about technology?

Industry stalwarts predict that in the years, ahead technological advancement will have a significant part to play in correcting the industry-wide labour shortage by spurring innovation and boosting productivity. Historically, the industry has lagged in terms of its uptake of new technology. For example, BIM (Building Information Modelling), has been around for some time and yet there is still a reluctance to fully engage with all that BIM offers. However, the current skills shortage may be a tipping point in an industry which is ripe for change.

Some commentators forecast a digital transformation of the construction sector in the not too distant future with the adoption of new robotic technology to carry out tasks on site historically carried out by people, wider use of VR and AR (virtual reality/augmented reality), particularly for training and health and safety purposes, and 3D printing technology being put to use. Here in New Zealand, drones are already being deployed for surveying, inspection and monitoring purposes, providing time and cost saving benefits.

Encouraging the uptake of new technologies and more innovative building practices in a traditionally conservative industry requires systematic change at both industry and government level. Heavy regulation and attempts to reduce risk (and liability) to the industry is often cited as a barrier to effective innovation, leading to calls for increased efficiencies in the council consenting process and reduced bureaucracy. Financial constraints and a lack of affordability of new technologies and solutions are another obvious obstacle although improvements in performance productivity can counter this – especially when widely adopted.

At a fundamental level, what is needed is a shift away from a workplace culture that is naturally (and understandably) risk adverse to one which fosters innovative behaviours i.e. one in which participants are encouraged to think creatively, share new ideas and knowledge of technological advancements. Given its role in the sector as a lead procurer of construction services, the government could be influential in paving the way. For example, by funding research and development initiatives, reconsidering its procurement models (i.e. the weight afforded to non-price attributes) and adopting more collaborative and incentive based contracting mechanisms, such as Alliance contracting.

So what’s the fix?

There is no one solution to addressing the labour shortage in the construction industry. Given the urgent need for workers on the ground, sourcing labour overseas is an immediate necessity but it’s not a long-term answer to addressing skill shortages in the industry.

Upskilling and attracting a new generation of talent is critical to meeting capability demands and one way to do this is by fostering innovative working environments in which new technologies and techniques are embraced. This is also crucial to improving productivity levels across the sector which should in time reduce the current overreliance on a stretched labour force.

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