Exploring HR Challenges in Construction: How Can We Improve Practices Together?

Greetings, this is an attempt to understand the HR Practices in the Construction Industry, as discussed in this community. We invite the experts from the industry to correct us on what requires to be added or upgraded. Any contribution towards the points missed below would be valued:

HR Practices in Construction Industry PPT - Download

This presentation discusses the following challenges:

• Challenge #1 – Matching skilled labor supply and demand
  
• Challenge #2 – Creating a responsive apprenticeship system
  
• Challenge #3 – Establishing an innovative training system
  
• Challenge #4 – Facilitating worker mobility
  

HR Strategy for a Construction Company as contributed by Saby: Post

Normally in a construction company, the goal is first set by the management. It depends on the type of construction the company is in, such as Power Plant Construction, Residential, Commercial, Projects from other organizations, Townships, Fuel line construction, chemical plant construction, docks construction, etc.

After the goal is set, it is then informed by the management to the respective departments. Strategy is then formulated after discussions and/or debates between various department heads, including the shareholders of the company.

After the strategy is adopted, a guideline is prepared to implement the strategy. Normally, the strategy is distributed to the respective departments, such as planning, contracts, purchase, sales, marketing, etc.

It is true that without manpower, the construction of any product does not come into effect. Therefore, to handle the various concerns related to manpower (such as recruitment, safety, health, behavior, work, etc.), an HR and personnel department is established.

Since you are talking about goals, strategies, etc., be more sure what you wanted since these things might have been developed by the organization you are working for.

To set up policies related to the code of conduct of the employees, medical assistance, housing and food assistance, leave travel assistance, leave calculation, overtime calculation, minimum wage, increment, superannuation, security assistance, accident assistance, gratuity, insurance, etc., you will have to comply with the GCC employment rules and regulations. Similarly, for HRD, statutory requirements for recruitment, interview procedures, working hours, etc., you will have to gather the details from the respective departments the candidate will be selected for. Your role will be shortlisting the candidates for interview, coordinating the interview between the candidate and the head of the respective department, preparation of contract agreement (which will differ from positions to positions and nationality of the candidate), air-ticket arrangement, visa arrangement, medical check-up of the candidate for residence permit/work permit, accommodation arrangement, food arrangement, transportation from site to accommodation arrangement, and a whole load of other arrangements as and when required for the upkeep of the employee.

Few areas for HR Operations and Practices as discussed by Dr. Shanmugan: Post

HR in the service and construction industry is really tough enough. It is only through major results that HR initiatives are recognized. If you want to be recognized, slowly start with HR activities.

1. HR Manual

2. HR Policy

3. Initiatives like 5S, performance management system, competency assessment, team building, etc.

HR Issues as voiced by Rashmishingh: Post

• This industry is still in an early 20th-century mentality where employers think that they are doing some favor to employees by giving them employment, and employees think that they have nothing to do with the overall picture of the company's development.
  
• Even if you try to implement something new (new means new for this industry or company), neither management nor employees are interested. They have their general comment: if everything is going fine, what's the use of these fundas...
  
• I am equally disappointed by the management view as well as employees.
  
• This industry needs an overhauling process in not only organizational structure but in mindset too.
  

Leave Policy as discussed by Kumaran Siva: Post

For Office Staff

• All Weekly Off
  
• 7 CL
  
• 1 EL/20 w.d.
  
• 10 Holidays
  

For Site Staff

• 2 Weekly off in a month
  
• 45 Days EL which includes CL, balance Weekly off, etc.
  
• 5 Holidays (balance 5 days will be added in leave)
  

All leaves are encashable.

Organization structure and designations as shared by Udhav: Post

There are different positions which vary from company to company. In a sizable company with over 5000 employees, the hierarchy could start at the lowest position of:

• Asst. Engineer {Trainee} and further upgraded to...
  
• Asst. Engineer (Projects or Planning or Contracts or Billing)
  
• Jr. Engineer (Projects or Planning or Contracts or Billing)
  
• Engineer (Projects or Planning or Contracts or Billing)
  
• Sr. Engineer (Projects or Planning or Contracts or Billing)
  
• Asst. Manager (Projects or Planning or Contracts or Billing)
  
• Dy. Manager (Projects or Planning or Contracts or Billing)
  
• Manager (Projects or Planning or Contracts or Billing)
  
• Sr. Manager (Projects or Planning or Contracts or Billing)
  
• Asst. Gen. Manager (Projects or Planning or Contracts or Billing)
  
• Sr. AGM (Projects or Planning or Contracts or Billing)
  
• Dy. General Manager (Projects or Planning or Contracts or Billing)
  
• Jt. General Manager (Projects or Planning or Contracts or Billing)
  
• General Manager (Projects or Planning or Contracts or Billing)
  
• Vice President (Projects or Planning or Contracts or Billing)
  
• Sr. Vice President (Projects, Planning or Contracts or Billing)
  
• Director (Projects/Technical)
  

However, the last five positions could be for overall management and are the highest levels at many organizations where people with over 20 years of experience are offered such designations.

Regards

Further Description of Challenges and Cost Control Measures by Saby

It is true that all companies, whether in the construction sector, manufacturing sector, power sector, etc., normally tend to curtail or eliminate unwanted and unnecessary costs to achieve a product at a very reasonable rate. This is largely due to increased competition in the same sector. They start with the purchase department, contracts department, execution department, etc., and finally the HR department. It is easy to shed some employees who might not be required in the organization or who are unskilled and non-productive. Though it is tricky to retrench (as it may affect the morale of some other good workers), it is not so difficult. You have to be convincing and very cautious while dealing with this subject.

When a project is in progress, each employee is bound to show his or her potential to their superior, which information is passed on to the department head and ultimately to the personnel department. This is done through the appraisal report of the employee. Normally, based on this appraisal report and other parameters, rewards or punishment are meted out to the employees.

To control manpower costs, first of all, the respective departments have to list out their requirements to the admin department. The list will and should consist of the candidates' desired qualifications, technical skills, age, years of experience, flexibility, role to be performed, responsibility, alertness rating, etc. Based on this, the admin department has to check with the current market to know about the remuneration paid to such candidates. Upon receiving the approximate amount, they have to forward the proposals to the Directors of the company for approval. Once approval is granted, the recruitment procedure lies in the hands of the admin department. While recruiting, if all the required parameters are met in a candidate, the admin has to come to the remuneration part. Though you know the market rate and the approval is accorded by the management, it is your duty to bargain with the candidate and offer him the best least of the remuneration. Normally, a candidate has his own expectations, but more often, it is below the market standard rate. This is one way of reducing manpower cost.

Another way is to divert good, qualified, and experienced personnel from one project to another project (of course, in coordination with the planning department) to reduce the project cost if it is in the finishing stage and the other is at the starting or middle stage.

One more way to control costs is to assign personnel to two or three different projects. This way, extra manpower is not required unless compulsorily required, and money is saved.

If you find a person working with you for a long period of time, naturally, his payment and other benefits (gratuity, promotion, bonus, etc.) also increase. In such cases, delegate his responsibility to his junior staff with a minor raise and either promote this guy with more responsibilities or retire him. This is one way of effecting cost control.

If you find a person who is well-qualified and talented and appointed in a job below his category, promote him with 100 bucks. The guy will be highly grateful not because of the meager amount you have provided but due to his qualification and talent being observed and promoted by you. This is a very effective way of cost control.

If you find a person ineligible to work in his assigned task, try to train and use his services; otherwise, put him in another department and check his performance. If he is still not able to deliver, give him his ticket.

If a company is expecting a project maybe after 6 months and the present manpower is a burden on the costs but does not want to terminate them because they are talented and difficult to replace, then the best way is to send the employees on a long leave. The employees will surely not mind this.

Greetings, here is the manual contributed by Ankit, which has been attached. I am requesting experts from the construction industry to share the points of differences and any other relevant information, if missing.

[HR Manual for Construction Industry](https://www.citehr.com/111951-hr-manual-employee-handbook-construction-company.html#post463615)

Thank you in anticipation.

Dear Ms. (Cite Contribution),

Please accept my sincere appreciation for initiating a nice, informative, and must-know subject thread. I would like to add one more point regarding cost control, which is to look into the non-productive workforce such as cleaning, stacking of material, and the housekeeping team at the construction site. Instead, we can instruct the concerned skilled workforce to clean on a daily basis within a stipulated time before closing hours, i.e., 30 minutes after completion of the task. This approach can help us avoid scattered materials lying around, which could lead to accidents, and prevent idle manpower resulting from the non-availability of continuous work for skilled personnel.

Additionally, a continuous supply of materials also contributes to cost control. This helps us avoid work stoppages due to material shortages, with effective supervision by the Stores, Planning, and Execution team.

Thank you.

Great compilation. It gives a lot of insight into the various issues. The list is pretty big, and somewhere I felt that we are entering more into the Personnel or the Administrative requirements rather than core HR requirements.

Fundamental Issues in HR Practices

I feel two fundamental issues have been missed out:
1. Organizational design
2. Organizational efficacy

If we don't track these effectively, the other activities mentioned will just collapse. They actually support the Design and Efficacy strategy.

In our program on Project Management, we explained and demonstrated these factors. We have a new simulation model that can assist companies in addressing these basic issues. And if you recall, we had also discussed some of these topics last time.

Flexibility in HR Practices

The other issue is that of flexibility in the practices. It is often seen that the Business-Cost-of-Strong-HR-Policies might be far too high for most companies to bear. Hence, if the HR professional is forcing the rollout of a system that works on the 'policing principle' as indicated in the 'suggested rules for leaves, salaries, overtime, etc.', it would fail to touch the required potential. This also distances the HR from the internal stakeholders (project managers, etc.). While rules are important, cost and the productivity of the system need to be carefully considered.

I would rather focus on principles. Interestingly, none of the posts tried to incorporate the Critical Chain Project Management practice. I think it is VERY VERY important to understand this methodology because you will see explicit contradictions coming out.

Regards,

Hi all, At the beginning, I would like to thank the Moderator (Cite Contribution) for initiating such an interesting discussion, which is truly a value addition in all aspects. Thanks to all contributors for their valuable time and for ensuring that this discussion becomes enriching.

Let's keep the discussion on:

1. What are the benchmarks of HR practices in the Construction industry - like PCMM in IT/ITES?
2. Can someone name some of the best practices in Rewards and Recognition, Performance Management for the Construction Industry?

Regards, Anindya