Changing Patterns of Human Resource Management (HRM) in Construction

Introduction

The recent demands of customer and market-oriented strategies from visionary clients in the construction sector have generated challenges and opportunities in human resource management. The quality and value-driven services requirements have changed the priorities of this sector in the strategic management of human capital. Likewise, the business models and management approaches are also likely to be modified given new HRM paradigms. However, due to the significance of economic activity and labour intensiveness of the construction industry, the application of contemporary HRM principles is not observed widely (Marchington and Wilkinson, 2012). Though the management styles and practices can significantly impact organisational performance, the construction sector lacks long-term HRM planning and barely consists of project-based workforce management (Storey 2000). This report is based on the critical review of the contemporary HRM approaches in the construction industry and applications of the management perspective of HRM in the global construction sector (Wilkinson et al. 2012).

Contemporary HRM Practices and Policies

The basic HRM practices are characterised by three management practices: soft, hard, and harvard styles. According to Gill (2007), the Soft HRM approach emphasises the better response of the workforce to the organisational goals once their own needs and expectations are fulfilled. This approach is based on Maslow's (1954) hierarchy of needs and proposes a healthy organisational environment if the management addresses the individual needs of employees. In contrast, Noe (2006) argued that individuals perform better if they are motivated enough and feel connected to others in the organisation. Hence, employee engagement and better relationships are supported in this model.

However, the Hard HRM approach favours the notion that organisations should deploy human resources in a structured and systematic way, just like any other resource. Therefore, as in additional resources, cost-effectiveness and maximum output should also be desirable in HRM. Kleiman (2000) asserted that using this model assures the achievement of performance through effective management control of HR activities in order to sustain the competitive advantage. The structured HR strategy is designed in this model to fit the business strategy that includes strict performance management measures, workplace flexibility, outsourcing, and other important initiatives to operate the workforce efficiently.  This management perspective is more prevailing in the construction sector as the management designs the workforce practices merely in line with the project requirements and is not considerate of the worker’s needs.

On the other hand, the Harvard model provides a midway between soft and hard HRM models, as Lado and Wilson (1994) declared that employees are considered a  resource in this model. Still, management also considers them human as far as the decisions of the organisation and employees’ relations are considered. Societal expectations are also counted along with the achievement of business goals. Harvard model is best suited for contemporary learning organisations and includes the concern for workflows, reward and appraisals, employees commitment initiatives, competence, congruence to organisational goals, and cost-effectiveness in workforce management. In contrast with Harvard and the HRM model proposed by storey (1995), management of workers in construction is most of the time considered Hard HRM. In this regard, Ness and Green (2012) described this approach in the construction industry as being due to the antagonism of project managers to use contemporary concepts of HRM as a concept. Due to this industry's project-oriented nature, long-term HR planning and investment are luxury practice that does not pay back to the organisation.

A critical review of HRM theories' implications in Construction

In view of the practices of employment and industrial relations observed in the construction sector globally, it is observed as largely inconsiderate, informal, and casual as far as workforce management is considered (Lingard et al., 2008; Townsend et al., 2011). Also, occupation health and safety issues are widely reported in construction (Loudoun, 2010), with issues related to workforce management and relations (International Labour Office, 2001). In the context of management theories and models, the management styles are found to be different in various industries, and construction is also not an exception. Hence, the main concern arises that part from the weak impact of long-term and visionary management planning and implications, this industry is not properly adjusting to the management approaches in HRM (Townsend et al., 2011).

However, the main theories of HRM are geared around the outcomes as performance and increase in efficiency; the literature suggested MRM models as a way to obtain best practices that lead to achieving competitive advantage in human capital management (Torrington et al.2008; Storey 1995). Though the symbolic nature of discussions is found to contradict the above discussed HR models, this critical review is not found in the literature related to the construction sector (Wilkinson et al., 2012). Furthermore, Belout and Gauvreau (2004) debated that the contemporary approaches in HRM are based on effective ways to manage and deploy human resources and consider the factors of personnel management.

Similarly, Lin et al. (2011) suggested that the cost-effectiveness of HRM is also an essential attribute for construction companies that lead to a lack of long-term HR planning and development initiatives. Hence, the construction industry needs to change the standpoint of treating people as a resource and deploy them according to like the factors of production, as evident from the fact that a considerable proportion construction workforce is non-native / multi-lingual. Although this industry is more labour intensive, it needs a more human relations approach to HRM in which employees are treated as individuals with unique attributes and qualities and should be managed according to their skills and willingness (Huemann et al., 2007; Townsend et al. 2011). Consequently, Dainty and Chan (2011) also argued that critical perspectives are essential for existing HR theories on their implication to project-based settings like that in the construction sector. Therefore, evaluating the application of existing HRM perspectives in the construction sector can provide an insightful and important judgment on their applicability in this sector.

Management Focus of HRM in Construction

The management focus selected for this paper is based on one of the three HR perspectives presented by the editorial of Wilkinson et al. (2012), including human, resource, and management focus. This perspective is important in the context of projects based on operations of the construction industry as the key management practices can effectively enhance the organisation and project performance. Also, the remaining perspectives of human and resources are oriented toward the demands and needs of employees. In contrast, management focus is based on the point of view of management and its initiatives to enhance employees’ performances. According to Fleetwood and Hesketh (2007), the relationship between HRM practices and organisations' performance does not have much theoretical backing in the construction industry. Therefore, the impact of employees’ factors and management requirements can impact the performance of construction projects (Dainty et al., 2007).

Another important management concern is described by Raja et al. (2014) that due to fluctuations in market demand for large projects, construction firms focus more on cost versus benefit strategy in HRM and avoid long-term employment and development opportunities for workers. Training and development are supposed to be the part of workers as the company demands appropriate training and experience for hiring on a particular project. This working mode has raised serious concerns related to various HRM attributes in large construction firms. In the absence of a safe and secure working environment and long-term career growth, high employee turnover, outsourcing, and sub-contracting largely prevail in this industry (Green and May 2003).

Additionally, the involvement of multiple stakeholders in the construction industry also affects management strategies in a project. The diverse interests of management and workers make HRM more complicated due to the mismatch of employees and organisational goals; for instance, the issues of salaries and overtime affect employee relations differently in different geographical rejoins (Forde et al. 2009). Also, Wilkinson et al. (2012) declared that HR managers in the construction industry have a more strategic role in managing macro and micro level changes and cultural management in international projects. Also, in management focus, enhancement of skills and attitude of employees also need to be addressed to meet the diverse changes in different parts of the world.

Applications of management focus in construction HRM

This section of the report evaluates some important implications of management focus areas in the construction sector

Employment/Recruiting

This basic function of HRM can be modified by designing application procedures, interview checklists and materials, and assessment tests. The aspect of management in this concern is to attract the right target market of potential employees with recruitment and selection techniques. For instance, Tarmac is a leading UK-based building material supplier and was established in 1903. Due to the project-based nature and through competition in the industry, Tarmac uses a combination of selection tools like group-based exercises, competence analysis, oral communication and presentations, and finally, internal tests. Carefully made job descriptions limit confusion in both local and foreign operations.

Learning and Development

The management attribute involves designing training and development programs after thorough needs analysis.  In this aspect, HR professionals in the construction industry foresee the market demands, labour market characteristics, and condition of existing workers in view of new technology and handling techniques of material and labour. The rigorous training and development program can create a competitive advantage for the firm to assist it in reducing employees’ turnover rates.  

For example, Blue circle Cement UK offers four-level training to senior managers, staff teams, team leaders’ briefings, and team building workshops. In addition to the team training, employees were expected to carry out a skills training programme. Everyone had to learn at least four new skills, and craft workers had to learn at least one other new craft. Initial training involved between four and six weeks for each employee. These learning initiatives turned the Cauldon UK plant into a sustainable and dramatically efficient plant in 1990 compared to 1985, as shown in the image below (BCS 2012). Award-winning Total Quality Approach introduced a Quality staircase by sharing power and responsibility at each level. The following figure shows the quality staircase components used by Blue Circle Cement to develop a learning and development culture.

Figure 1; Total Quality Staircase Example (Source: BCS, 2012)

Industrial/ Employee Relations

According to Gospel (2009), industrial relations and employees’ engagement are one of the contemporary management issues due to the influx of migrant workers, urbanisation, and changed working conditions in the construction industry. Sisson (2010) declared that the role of HR management is to provide liaison to resolve industrial and employees relation issues, union tackling strategies, assistance in collective bargaining negotiations and employees grievance procedures. This role of HR management is both crucial and sensitive as HR managers directly face workers’ demands and grievances.

On the other hand, Raj et al. (2013) argued that construction companies use outsourcing and subcontracting options to avoid interactions with employees and deploy employee relation responsibility to contracting companies (According to AEII (2007:7), ‘Improved productivity and enhanced project management capacity are critical to the industry. With a tight labour supply, one of the solutions necessary is to work better’. Hence, avoiding direct employees and industrial relations issues with foreign or local subcontractors are not the long-term solution. The Strategic HRM approach requires the integration of company management with the obligations of employees to secure a better workforce engagement with the parent company to generate a long-term commitment.

Occupational Health and Safety

Wilkinson et al. (2009) and Sisson (2010) declared that the construction industry has a high propensity for workplace hazards and occupational safety issues. Therefore, management-focused HRM has a prime responsibility to foresee the prevention strategies development for occupational hazards, legal workplace safety policies, wellness and EAP programs, and harassment control procedures. The role of operations management is crucial with respect to the HR, in making the operations more secure with guarded machinery, safe heavy equipment, and safety precautions in handling harmful materials like Silica dust and asbestos. 

The measures taken by large construction firms are exemplary in this regard; for instance, Balfour Beatty, a leading infrastructure firm in the UK, has used ultimate safety precautions for the workforce. Some crucial initiatives include improvements in operations, better communication among project teams, the time recorded operations, onsite medical and emergency assistance, and insurance cover for workers in providing occupational hazards (Balfour Beatty website n.d).

Affirmative Action/ EEO Policies

 The provision of equal opportunity employment is one of the important areas of management concern. Affirmative action or EEO program development and implementation helps the company resolves disputes related to EEO. For instance, EEO courts US gave the ruling against Skanska USA, leading  Building contractors in the USA to pay $95,000 in order to settle a sexual harassment case on the basis of racial and retaliation attributes from the company in case of violating the federal laws and misconduct of termination of Black employees (EEOC US, 2015).

However, de Graft-Johnson et al. (2009) argued that the construction industry has failed to provide equal opportunity employment and career advancement to hired women, ethnic minorities, and immigrants. Similarly, Wilkinson et al. (2009) asserted that these neglected groups and individuals from diverse origins and gender could provide potential and skilled workforce in the growing construction industry. Also, Campayne et al. (2007) suggested that although the percentage of women in construction has increased, the initiatives toward women's hiring and development are still slow in this industry.

Work and Family Balance

With busy schedules and heavy mechanical jobs in the construction industry with long hours of onsite work, the issues of Work-Life balance are also found important in the well-being of the workforce. The scholars urge the industry to develop flextime schedules, telecommuting job opportunities, daycare and dependent care help, informal family engagements and promotion of family life engagements in employees (Sisson 2010; Li and Namasivayam 2011; de Graft-Johnson et al. 2009). Large construction companies take systematic measures to sustain family-work balance in real businesses. For instance, Holder Construction has around 728 employees operating 60 sites in the country.   The company offers special programs like paid vacations, Family paid time off (PTO), and elderly and family care facilities that allow employees to afford family care and takeout time from official duties (HCC, 2015). However, apart from a few such examples, a large portion of the construction industry still lacks severe measures in this area of management concern.