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The Importance of the Construction Industry

Discuss about the Key Challenges On Attracting And Retention Of Workforce On Construction Industry.

The aim of this essay is to introduce the recruitment challenges regarding attraction and retention in the construction industry. The aim of this essay is to introduce the recruitment challenges regarding attraction and retention in the construction industry. Employee attraction is the ability of an employer to recognize and place potential employees into its employment. The staff retention refers the systematic effort by the employer of the company to build and promote an environment that motivates present employees to stay employed by making practices and policies that address their number of requirements. The construction industry is a vital industry as it contributes to the economic growth of a nation. As per the Bureau of Labour Statistics, it has been found that the construction industry included more than 30,000 jobs in the year of 2017. On the whole, the construction industry added around 210,000 jobs in 2017, which is considered as the increment by 35% in comparison of last year. Furthermore, the spending on the construction industry is rise as the commerce department reported that the spending on construction was up around 2.4% in 2017, involving a record $1.257 trillion in the month of November (Craig, 2017). The vigorous economy and the flow in spending are expected to increase construction hiring more in the year of 2018. This industry has created the number of jobs for the employee in different department of the construction industry.  The purpose of this essay is to explore the challenges regarding the attracting and retaining employees in the construction industry. The scope of the construction industry is huge as the interest of the government of every nation is increased towards this industry. The construction industry is developed day by day as it involves latest technology by keeping consideration of safety and training.

There are various challenges that bring the difficulties in the construction industry to attract the workforce. Some of them are lack of competitiveness, recruiting issues and unengaged employees. Competitiveness is the first challenge in the construction industry, it is required for the construction industry to attract the latest and new demographic, the needs of the population should be re-imagined by the company in an adequate manner. Diversity should be in the construction industry so that the ideas and perception in different range can be gathered in a sufficient way. It is vital for the construction industry to have the skilled employees and good working environment to attract the great people towards the construction industry. There is a number of skilled and great people all over the world that are looking for good jobs and it is required for the construction industry to make them aware about the advantages of this industry in their career. It has been suggested by Hedley, (2015), that employers of construction industry need to have a good understanding of generational difference for attracting and retaining the employees.

Challenges in Attracting Workforce in the Construction Industry


The second challenge in construction industry is recruiting issues that become the wider issue for this industry because there is a lot of risk regarding safety within the industry that raises the concern of safety. The Construction employment edged up by 17,000 in April due to higher attrition (BLS, 2018). The number of accidents in the construction industry is increased due to lack of training regarding safety that being the cause of lack of shortages employee. Feedback from the employees is generally avoided by the construction companies that being the major cause of choosing another option for growth. There is a lack of professionals and project manager in the construction industry that creates a crisis regarding hiring. There is an example of construction industry in Australia that there is unsafe work environment and labour cost is lower.

The third challenge is disengaged employees as it has been found that the employee turnover is problematic in the construction industry. Low engagement can bring less clear outcomes like lack of collaboration, poor work environment and support among employees. Employee turnover is the biggest risk of employee disengagement. It has been found that the profitability does not have a direct influence on the purpose of improvement since it is an outcome of the actions and ways in operations. The employee turnover rate is 21.4% in the construction industry which one of the highest rate in comparison of all industries. It has been found from the Construction Industry report, 2017 that the construction employment is getting decreased by 1,038 employees in 2015 (Bankwest, 2017). Along with above discussion of challenges regarding the attraction of workforce on the construction industry, there are other challenges such as labour shortages, safety, stagnant productivity levels and technology adoption. 

The construction industry is discarded more than 2 million jobs at the time of economic downturn and has faced issues to get employment back to pre-recession numbers. There are number of workers in this industry either laid off or retired and started to find out the employment in other industry for getting the better opportunity (Tiwari &Saxena, 2012). It has been found that the bottom line regarding construction industry is unable to attract enough talent to fulfil the demand of the employees. It has been found it recent survey which was conducted by AGC that approx 75% of the organization in the construction industry is expected to include headcount in 2018 and that approx 78% organizations are facing concern in finding qualified workers (Jones, 2018). Moreover, 82% organization of construction industry is expected it to remain hard or get harder. The labour shortage has a significant role in hampering productivity in latest years with number of employees not having qualified skills required by companies endeavouring to do more work with workers. Safety is the major issue in the construction industry as it has been found that around 82,760 accident injuries in 2016 due to non-safety while working (Jones, 2018). The latest technology has been introduced in the construction industry such as VR, AR, Robot, drones, 3D Printing, autonomous vehicles and many more.  Due to lack of involvement in the industry of these latest technologies have become the huge challenges in attracting the workforce.

Competitiveness


Apart from attracting workforce on construction industry, there is a major issue of retaining them in an efficient manner. There are various issues such as lack of opportunity, ineffective pay scale, lack of performance management system, dissatisfied employees and improper workplace environment. However, it has been discussed that people start to take interest in this industry to get growth in their life but there is not a lot of scope for promotion in the construction industry. Retention is a complex concept which cannot be explained in a single line as it involves a number of recipes to keep employees with a company (Samuel & Chipunza, 2009). This concept is included repurchase intentions, identifications, commitment and trust. The first challenge in the employee retention is lack of opportunity that is why people switch to another job for getting promoted. The previous assignment has been made with the help of a number of articles and journal article by which the importance of HRM in construction industry has elaborated in a noteworthy way. Salary is a financial motivation for every employee in every industry. Financial motivation empowers the employee to stay in the industry for a long time. According to Chiboiwa, Samuel & Chipunza, (2010), monetary dissatisfaction forces employee to look for a change which bring the cause of retention issues. It is the second challenge of employee retention because rewards and recognition program help employee to get motivated which enhance the productivity of them towards accomplishing the tasks. Training itself has become the challenge in today’s competitive advantages.

The construction industry is growing rapidly and due to lack of employees can hamper the revenues of the construction industry along with the image of it. The third challenge is lack of performance management system as it reduces the productivity of the employees. Performance appraisals are vital for the company to stay encouraged and avoid looking for a change (Ingersoll & Strong, 2011). It has been stated by Lamba &Choudhary, (2013), that performance management system has the efficiency to in proving the productivity of the employees in the construction industry. Construction industry is complex industry in comparison to other industry that is why it is required for the company to focus on rewards and recognition to motivate the employees significantly. As per construction owners association of America (COAA) 63% of direct labour time on huge construction project is spent waiting for equipments. Th prfit margins of construction industry is shrinking and productivity is stagnating day by day due to less focus on employee attraction (Leeds, 2016). It has been defined by Chan & Kuok, (2011), that profitability is considered as the better supplement to productivity as well as performance measures. The role of the performance management system in the management has the crucial role that manages the performance in an organization by making sure that the employee of the industry knows the importance of their delegations to the goals and objectives of the organization. There are several benefits of performance management system in the construction industry as it facilitates to motivate, morale and retention, firing risks, identify the good and bad performers in the industry, identify the training needs and document salary actions.

Recruiting Issues

It is not possible that every individual of the company has similar potential to handle the work that is why it is vital for the construction industry to delegate the responsibilities as per the skill in which various posts and profiles can be differentiated. Improper work environment is another challenge of the employee retention that can hamper the growth of the company. According to Accenture study, only 15 % of project delivered on time and number of companies face the issue regarding underperformance projects in the previous year (Leeds, 2016). Job satisfaction is the major factor to stick the employees with the organization for a long period. Job satisfaction in the construction industry is differentiated with various dimensions such as satisfaction with empowerment, pay, work group, security, and work station and job fulfilment. Lacking in one of them bring huge issues within the organization that being the cause of dissatisfaction within the employees.

The reason for raising issues within the construction industry is lack of diversity in the workplace as diversity facilitates to increase innovation with the help of different ideas and viewpoints of the employees. It has been analyzed that approx 89% of construction companies facing issues of talent shortages. Employee engagement should be involved in the construction industry as it reduces the work stress and involves many employees in working (Tjiparuro, 2012). Employees want feedback and rewards on their performance so that they can get to know about the developed skills and lack of skills as per the feedback. It is important for the attraction and retention to the employees on the construction industry to find out the areas that need improvement because wrong identification can lead the organization into the incorrect path (Fisch, English, Pedaline, Brooks & Simhan, 2009).


It has been recommended to the construction industry to have the best performance system to eliminate the impact of challenges so that the employee retention and the attraction can be increased efficiently. The first recommendations are that the employees of the construction industry should be given proper importance in the planning so that they can value as the important assets for the construction industry (Andrews, Michele & Kacmar, 2014). The second recommendation is that the progress of the employees should be monitored by construction industry in which it should give rewards and recognition to them who has good performance in overall industry such as companies, employee of the month and other rewards, it will certainly encourage them to connect with this industry for a long time and along with this new entrant will be motivated to enter in the construction industry for getting success and growth. Next recommendation is that rewarding and appreciating the employees’ efforts make sure that the level of their performance is not compromised by the construction industry. It ensures most favourable performance, productivity and increases profitability. Chin & Hamid, (2015), stated that evaluating the performance of the employees is essential for the construction industry which should be done on individual basis. It is helpful for the employee to understand the each and every concept of the industry in an efficient manner. It is the way in which they can focus more on that area which requires higher attention to remove the weaknesses of them. Staff retention and new entrants can be improved by focusing on the improvement in the long-term career prospects. Business efficient of construction is getting reduced due to distance between constructions project. Skills requirement is changing in the construction industry that may highlight the skills gap. It has been analyzed that the relations between the client and the major contractor are generally subject to a staged approached of two to releasing the money. There should be a proper retention strategy and plan to retain the employees (Terera & Ngirande, 2014).

Disengaged Employees

According to Pekuri, Haapasalo & Herrala, (2011), there are various techniques of performance management system that facilitates to reduce the challenges of construction industry appropriately. Performance appraisal, 360-degree feedback, management by objectives, performance development plans and rewards and recognition plans are some of the major technique of performance management system that has the potential to attract a number of customers towards construction industry. The third recommendation for construction industry is to focus on these factors to implement the effective strategy so that the employees can stick with the industry for a long time (Ball, 2014). The construction industry should appoint the team of human resource that should be skilled in their field. The fourth recommendation is to provide training program by construction industry which should be completed at the end of human resource department. It has been found that the safety and pay scale of the employees are the major concern of the construction industry which can be reduced by giving proper training to the employees (Pauwels and Terkaj, 2016). The constructions projects are depicted to risk at the time of their coming into existence. In such case, it is necessary for the construction industry to measure the errors which can be the cause of losing the life of someone (Ghasemi, Mohhamadfam, Solatanian, Mahmoudi & Zarei, 2015). The fifth recommendation is that the monetary factor is most influential aspect for the employee as it has been found that labour cost is quiet low in the industry. It is essential for the manager of the different companies in the construction industry to build healthy work environment by keeping consideration of rewards policies no matter whether large companies or small.


Kananpur & Deeravathm, (2017), defines the importance of employee retention in the construction industry in which he states that put employee of the construction industry at right position. Provide them career path so that they can plan their future accordingly. Rewards program should be considered in the construction industry because basic salary has the potential to motivate an employee to accomplish the task but rewards system can enhance the job satisfaction of the employee and retain staff. It has been recommended that construction industry should provide health benefits packages, stock options, company subsidized houses and other non-monetary rewards.  Employee turnover can have a negative influence on the construction industry and the effects of them are even more harmful to the companies and contractors of construction (Bilau, Ajagbe, Sholanke & Sani, 2015). It can be recommended to the construction industry to reduce turnover in on-boarding. On the job, HR department of every company of the construction industry to diagnosis the concerns before they occur in the workplace. The environment of on-sites should be created in comfort way where the project, as well as crew supervisors, can feel comfortable. Ultimately, there should be an environment where mutual respect exists between managers and employees (Zhou, Goh and Li, 2015).

Other Challenges

In the limelight of above discussion, it can be concluded that managing human resource management in the industry of construction is quite difficult as other industry. The risks of safety are high in this industry that is why it is required for the construction industry to analyze the area that requires change. The description has been made on the challenges of employee retention and attraction in an efficient manner so that the understanding can be made on the topic of the essay. Various challenges on employee retention and employee attraction have been discussed. Recommendations have been given in the context of improving the employee retention and increasing the attention of the employees in the construction industry.

References

Andrews, C., Michele M., & Kacmar, C. (2014). The mediational effect of regulatory focus on the relationships between mindfulness and job satisfaction and turnover intentions. Career Development International, 19(5), 494-507.

Ball, M., 2014. Rebuilding Construction (Routledge Revivals): Economic Change in the British Construction Industry. Routledge.

Bankwest, 2017. Construction Industry Report, Available on: https://blog.plangrid.com/2017/11/top-51-construction-industry-statistics-to-improve-productivity/?doing_wp_cron=1527341300.1882901191711425781250. Accessed on 26th May, 2018.

Bilau, A. A., Ajagbe, M. A,. Sholanke, A. B. & Sani, T. A. (2015). Impact of Employee Turnover in Small and Medium Construction Firms: A Literature Review. International Journal of Engineering Research & Technology, 4(2).

BLS, 2018. Current Employment Statistics Highlights. Available on: https://www.bls.gov/web/empsit/ceshighlights.pdf. Accessed on 26th May, 2018.

Chan, S. H., & Kuok, O. M. (2011). A study of human resources recruitment, selection, and retention issues in the hospitality and tourism industry in Macau. Journal of Human Resources in Hospitality & Tourism, 10(4), 421-441.

Chiboiwa, M. W., Samuel, M. O., & Chipunza, C. (2010). An examination of employee retention strategy in a private organisation in Zimbabwe. African journal of business management, 4(10), 2103.

Chin, L. S., & Hamid, A. R. A. (2015). The practice of time management on construction project. Procedia Engineering, 125, 32-39.

Craig, T. (2017). Six Tips for Attracting Millennial Workers to the Construction Industry. Retrieved from:https://constructionexec.com/article/six-tips-for-attracting-millennial-workers-to-the-construction-industry.

Fisch, J. M., English, D., Pedaline, S., Brooks, K., & Simhan, H. N. (2009). Labor induction process improvement: a patient quality-of-care initiative. Obstetrics & Gynecology, 113(4), 797-803.

Ghasemi, F., Mohhamadfam, I., Solatanian, A. R., Mahmoudi, S. & Zarei, E. (2015). Surprising Incentive: An Instrument for Promoting Safety Performance of Construction Employees. Safety and health at work, 6(3). Pp. 227-232.

Hedley, G. (2015). How to Attract Employees to Your Construction Company. Retrieved from:https://www.forconstructionpros.com/business/business-services/article/12134725/how-to-attract-employees-to-your-construction-company

Ingersoll, R. M., & Strong, M. (2011). The impact of induction and mentoring programs for beginning teachers: A critical review of the research. Review of educational research, 81(2), 201-233.

Jones, K. (2018). 4 Major Challenges Facing the Construction Industry. Retrieved from:  https://www.constructconnect.com/blog/operating-insights/4-major-challenges-facing-the-construction-industry/

Kananpur, M. & Deeravath, V. K. (2017). A Study on Retention Analysis of Employees Working in Indian Construction Industry. International Journal for Research in Applied Science & Engineering Technology, 5(8).

Lamba, S., &Choudhary, N. (2013). Impact of HRM practices on organizational commitment of employees. International Journal of Advancements in Research & Technology, 2(4), 407-423.

Leeds, R. 2016. Top 4 Challenges Facing the Construction Industry. Available on: https://www.digitalistmag.com/future-of-work/2016/08/15/top-4-challenges-facing-construction-industry-04388065. Accessed on 26th May, 2018.

Pauwels, P. and Terkaj, W., 2016. EXPRESS to OWL for construction industry: Towards a recommendable and usable ifcOWL ontology. Automation in Construction, 63, pp.100-133.

Pekuri, A., Haapasalo, H., & Herrala, M. (2011). Productivity and performance management–managerial practices in the Construction Industry. International Journal of Performance Measurement, 1(1), 39-58.

Samuel, M. O., & Chipunza, C. (2009). Employee retention and turnover: Using motivational variables as a panacea. African journal of business management, 3(9), 410.

Terera, S. R., & Ngirande, H. (2014). The impact of rewards on job satisfaction and employee retention. Mediterranean Journal of Social Sciences, 5(1), 481.

Tiwari, P., &Saxena, K. (2012). Human resource management practices: A comprehensive review. Pakistan business review, 9(2), 669-705.

Tjiparuro, Z. (2012). Human resource management practices of manufacturing and engineering organisations in India: Lessons for the developing world. African Journal of Business Management, 6(42), p.10665.

Zhou, Z., Goh, Y.M. and Li, Q., 2015. Overview and analysis of safety management studies in the construction industry. Safety science, 72, pp.337-350.

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