Spotlight on people

Many subcontractors report that they are finding it difficult to forecast their lead times accurately because of the present uncertainty in the financial markets. Workload is reported as high, but the outlook for the medium and longer term is uncertain. As described in the previous report, project delays are opening up capacity in specialists’ order books and contractors are factoring this in. Although many are confident that the work will eventually materialise, market conditions mean most cannot predict when.

As part of our survey of the industry, we requested feedback on any resources shortages that are affecting or may affect lead times. Amid the market uncertainty, there is general agreement on one thing: that there is a shortage of good, qualified people. However, contrary to what is implied by the drive to recruit and train operatives in the basic trade skills, demand is mainly for managers and professional teams, including estimators, designers, surveyors, CAD operators and planners.

One mechanical contractor said: “There is a distinct lack of trained engineers and project managers in the marketplace. This problem will only be increased over the next few years owing to the Olympics and so on.”

Meanwhile a steelwork contractor was experiencing “problems recruiting designers, draftsmen, StruCad detailers and contract managers”. These responses are typical of feedback over the past few quarters.

The recent completion of a number of large projects such as Heathrow’s Terminal 5 (pictured) could be seen as releasing labour resources back into the marketplace. However, at least one controls contractor does not see this as sufficient: “T5 is releasing labour, but there are still shortages of quality project managers and commissioning engineers.”

For some, the solution has been similar to that for basic skills shortages – recruiting from overseas. Professionally qualified staff from countries such as South Africa are being tempted by high salaries and a number of interesting projects in the pipeline. However, a challenge for specialists is that qualified professionals often prefer to work for consultants or main contractors.

Although the industry is adept at solving its skills problems by recruiting casual labour, the use of agency labour to address management shortages carries much greater risk and can have a far larger effect on a business. It takes time to train staff, whether agency or permanent, in the company’s procedures, culture and ethos, and accelerating that time to service shorter lead times increases delivery risks.

A shortage of qualified managers and professionals may also have a more direct impact on lead times. Because they represent a relatively small percentage of the workforce, a shortage of just one person will have a may create a bottleneck. For many smaller specialists, the shortage of one staff member in, say, an estimating or planning team of two or three people could represent a reduction in capacity by 30% or 50%.

There is a shortage of good, qualified people. However, contrary to what is implied by the drive to recruit operatives in the basic trade skills, demand is mainly for managers and professional teams

As projects become more complex and the legislative requirements more onerous, there is pressure on specialists to have even more qualified managers and professionals on their teams. Training is the obvious answer to the problem in the long term. Perhaps the bodies involved in skills training, such as ConstructionSkills, should look to supporting the development of management skills among those working for the supply chain.

Mace recognised a couple of years ago the need to increase management skills in the supply chain, particularly in construction management. Its solution has been to establish a business school where qualified Mace managers pass on their knowledge to their counterparts in its supply chain. More than 700 managers from 30 companies have participated in training there over the past 18 months. This has helped to alleviate problems associated with shortages

in this area and therefore reduced the potential for longer lead times, as well as improving the quality of delivery on Mace projects.

The situation was probably best expressed by the specialist sprinkler contractor who said: “Resources, or the lack of them, will hold companies and projects back over the next two to three years. Only companies with a positive strategy to take on graduates and trainees will be able to adequately meet the demands of the marketplace. How we do this is high on our clients’ list of questions at pre and post-tender interviews.”

Much of most contractors’ lead times are taken up by planning, estimating and drawing activities. Failure to address a shortage of professionals in these areas can only mean a reduction in the capacity to undertake the work. If this is isolated to an individual contractor it will simply create a barrier to their successfully bidding for the work, but a general shortage will result in the extension of lead times, as workload is rescheduled around the available resources.

Worst affected areas are such as M&E contracting and associated services including controls, sprinklers and ductwork. Other areas reporting a similar squeeze are those in which there is a high degree of design, including steelwork, cladding and specialist joinery.

Although the lack of people is only one of a number of contributing factors to the longer lead times recorded this quarter, during the prequalification stage the management and technical resources that will be made available to the project by the contractor should be considered to avoid any unexpected extensions.