Human Resource Challenges Facing Construction Companies In Europe

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The Key Human Resource Challenges Facing Construction Companies In Europe

Introduction

Research Problem

The booming construction industry in Europe has brought along Human Resource (HR) issues related to work safety, finding qualified staff, payroll, and advancement in technology.

Importance Of The Problem For Specific Stakeholder Groups

The issues mentioned above are of utmost importance to various stakeholders in the construction industry, including Project Managers, contractors, suppliers, architects, and clients.

Background of the Research

Considering that the construction industry in Europe is extensive, many organizations that include construction companies, contractors, subcontractors, and numerous people from varied backgrounds encounter diversified issues that revolve around the management of human resources.

Introduce Research Question

What are the key human resource challenges facing construction companies in Europe?

Research Objectives

To identify the common challenges faced by construction industries across Europe as it relates to Human Resource Management

To determine the specific Human Resource areas that need improvement to combat the issues identified

To assess the contemporary Human Resource Issues issues that have emerged as a result of technological advancement within the construction industry in Europe.

To explore the possible recommended solutions to solve these issues.

Research Road Map and Main Argument

The major HRM issues faced by most European based construction companies include health safety issues, finding skilled labor, workplace diversity, and payroll issues (Hussin, Rahman and Mamun, 2013). In trying to assess these issues, the literature review will evaluate the previous research related to the same in a bid to gain more insights regarding these concepts and later present a research design for further study.

Literature Review

Health And Safety Issues

International labor organizations indicated that health and safety in the construction industry are becoming more extensive than it had been before (Murie, 2007). Construction designs have developed with hence requiring more complex procedures that endanger the safety and health of workers in the company. These risks are into three divisions:

Physical Risks

The construction industry involves much of technical work hence prone to physical injuries from the work environment and building materials. Most buildings constructed currently are storey building with many floors, which subject workers to falling objects such as building blocks that may hit them from upper floors or the workers themselves falling from higher levels to the ground. Also, physical exertion and strenuous workloads such as heavy lifting, pushing and snagging, which may cause physical injuries and musculoskeletal pain (Ajslev et al., 2016)

According to Murie, 2007, physical injuries are increasing due to the growing construction industry and the development of new clients’ needs and preferences. Accidents are prone to occur in construction sites as materials are bulky, and a fall may create a significant injury on a worker. The knowledge on such risk gives the need for personal protective equipment such as protective gloves, hearing protection, and face shields. Protective clothing exists since the risks may affect the performance of the company. Improvement of construction materials also increases the risk of accidents; hence physical risks are becoming more rampant.

Chemical Risks

Construction raw materials used for the production of composites contain harmful mineral binders and high radiation products that affect employees in the companies (Kowalik et al., 2019). Mineral binders contain chemicals such as tricalcium silicate and tricalcium aluminate, which, when exposed to a humid environment, becomes dangerous to the human body. The substances affect respiratory organs and sense organs, consequently reducing production and workers’ activities. Materials such as cement have a high tendency of causing affecting respiratory organs due to a powder-like nature that is dusty. When inhaled interferes with the lining of the organs, causing discomfort and illnesses.

According to (Kolwak et al., 2019), most construction materials contain chemicals that are also poisonous, and workers are ignorant of the influence. Paints also have a strong smell due to resins, that strengthen the paint durability. The strong smell affects the nose and eyes, causing irritations; hence workers cannot engage as required. These discomfort issues are a challenge to the construction companies as the chemicals are essential in building. Protective clothing may fail to prevent the chemicals from getting into contact with the human body.

Psychological Risks

Construction companies are susceptible to mental health issues due to the exposure to job-related psychological stress such as high-performance pressures and complex decision making (Oswald, Borg and Sherratt, 2019). Construction work requires a lot of energy and involvement, which, if not well managed, may affect a worker mentally or negatively impact their psychological processes. According to (Tiwal, 2013), four significant factors contribute to the level of stress among construction workers. These factors include too much work, pressure, demanding deadlines, and conflicting demands between workers and management. Pressure caused by ambitious time limits and performance expectations is the leading cause of mental issues among construction workers.

The construction workers are human, and the environment they live in may either make them comfortable or cause psychological distress. For companies to attain their goals, they need to have targets, which have to be achieved by the workers. The urge to accomplish the goal leads to putting pressure on workers’ involvement. Failure to consider the factors affecting them in the work environment creates stressful experiences that affect them psychologically, leading to low or poor performance. Consequently, the company will not attain the goals set.

Finding Skilled Workers

Construction work is highly dependent on skilled labor to complete companies’ production operations. However, there has been significant skills shortage affecting time, cost, and quality of work (Mohamed, Pärn and Edwards, 2017). Poorly skilled workers require some training and directions to do the right thing, which takes time. Also, the quality of work produced by an unskilled person is l and with lower standards. Finding skilled workers is a challenge for construction companies due to:

New Technology

Low supply and unavailability of qualified ICT personnel have become a challenge due to high technological innovation and new ICT developments (Brixiova, Li and Yousef, 2009). Technology has been developing rapidly, also affecting the construction industry. The emergence of new machines requires experienced workers who can effectively operate them for proficient performance. Finding this skilled labor force is a challenge for construction companies, as many people do not see the skills needed to run the machines. According to (Brown, 2019), as manufacturing processes improve, with automation and technological advances, the skilled workforce gap continues to increase. The technically experienced workforce is aging and retiring, with no younger population taking over.

Technology will keep advancing, hence developing new machines and processes for the construction sector. People are not responding to the latest developments through finding the skills to operate the machines and run operations hence causing the shortage of skilled workers. The skilled population at the time are also becoming outdated as the equipment used before are not the same ones used currently. This shortage negatively impacts construction companies as it leads to reduced productivity and failures to reach objectives.

Insufficient Trained Workforce

Trained workers in the construction industry are diminishing as the growing population prefer indoor activities and relate construction work to wage inequality. According to (Brown, 2019), construction work is being neglected by the millennial society as they are moving away from hand-on jobs to indoor activities and working in offices. This mentality leads to a failure to get training on construction machines and processes hence less trained individuals within the population. Also, the construction industry is growing, with more companies emerging. Therefore, the number of qualified workers in society is insufficient to support the growing industry. Due to the high demand and less supply of workers, many companies fail to acquire a trained workforce.

The young population considers manual work as low waged jobs and requiring a lot of effort to accomplish. Most individuals wish for lesser work with more pay hence get trained o other fields leaving the construction sector with a lower number of people. The fewer individuals who decide to get construction training fail to serve the growing construction companies hence making it challenging to find skilled workers.

Construction skills gap

The construction industry has undergone a lot of changes; therefore, new skills and roles are emerging, with no skilled workforce to cover (Ukconstructionmedia.co.uk, 2019). Human effort is the most vital factor in construction companies to ensure the accomplishment of objectives. Having a shortage of skilled labor is profoundly impacting the performance of companies. The skills gap increases the costs for projects as it takes a longer time to complete, which is also a limitation for the clients. With the development of technology, roles such as ICT officers and developers are emerging, which needs qualified personnel to fill the positions effectively.

High skill is n in providing a quality service of a product. This requirement ensures the importance of hiring qualified staff in the construction companies to get excellent performance. As the industry is improving, with new designs, improved materials, and, most significant advancement in technology, new roles, and skills emerge. To fill the positions, one an experience in a function to provides the best services leading to better performances. The skilled labor force is lacking in the population, making it difficult to perform its operations efficiently.

Workplace Diversity

The workforce population springs from diverse platforms, but as they join the company, they have to actively and effectively contribute to a common goal. The factors that make workplace diversity a challenge for construction companies are:

Language and Communication

Workplace diversity leads to communication and language challenges, which affect construction companies as a conversation is one of the most critical competencies required for high performance (Burkard, Boticki and Madson, 2002). Communication is essential in production; hence workers need proper language setup to enhance communication. According to (Hoezen, Reymen and Dewulf, 2006), the efficiency and effectiveness of the construction process strongly depend on the quality of communication. Different backgrounds of workers create the communication barrier due to the existence of diverse languages and ethics. For efficient production, diversity has to be accommodated and approaches designed for efficient communication.

Language and communication challenges may arise due to diverse cultures and setups. The difference makes it challenging for construction companies to hire its workers as consolidating them is difficult. Construction companies are project-based; hence communication is vital for its operations. Diverse languages limits project efficiency and competencies, leading to low performances.

Gender Equality

Diversity sources may be treating technological and project-based work as masculine; hence companies are limited to preferring a particular gender to the other, even if one is competent enough. (Emuze, Smallwood and Han, 2014). Construction work involves a lot of heavy work, and since men are considered energetic, most of the work is deemed to be masculine. Therefore, the companies are limited to finding male workers, since female gender fail to accept construction jobs. According to (Sang and Powell, 2012), the construction sector is the most male-dominated sector since women who try working there, experience cultural and structural barriers such as discrimination and long working hours, which quickly leads to stress. Consequently, these factors affect human resources for construction companies in Europe.

Substantial work appears to be for the male gender. This mentality makes the female generation shy away from working in construction companies. Furthermore, the impacts and challenges, such as harassment and limited opportunities that come with working in the sector, scare away women. Therefore, construction companies tend to employ male gender for high performance and better productivity.

Ethnic and cultural differences

Cultural differences reflect on human relations, ethics, and habits, which affect workers emotionally, contributing to a loss of concentration and poor performance (Mbazor and Okuoma, 2014). In national culture researches, culture difference exists in four dimensions; power distance, individualism, uncertainty avoidance, and masculinity or feminism. These differences affect human resource management and hiring due to a common goal while working in the company. A study conducted using a quantitative approach on ten construction companies found that cultural differences affect management decisions that impact the overall performance of the companies.

Culture contributes to people’s habits and ethics, which, when not well managed, affects the performance of workers. Different cultures have different beliefs that need consolidation to obtain the objectives of the company. Diversity affects the decisions of management, which directs the daily operations of the company. Also, interference of these habits and relations may affect the individuals, leading to stress, loss of determination to work, and reduced or low performance in work engagement. Therefore, it challenges human resources in hiring its workers and finding the right people for the positions in the company.

Payroll

Payment is a challenge in the construction industry, as most jobs are manual, and there are no stipulated payment amounts for each type of job (Grimshaw, 2016). Construction companies develop their different payment strategies that do not match with other firms hence irregular payment rates.

Tracking Overtime

Lack of a developed technique for tracking overtime workers and dishonesty makes it challenging to get the required information for the allocation of payments (Hussin, Rahman, and Memon, 2013). Working for long hours than the stipulated time is rampant in construction companies. The long working calls for overtime payments, which use several formulas to calculate. These formulas may fail to be liked by the employees. Also, the management may not always be there to check workers’ work overtime, and those who leave early; therefore, payments may happen to nonworking individuals.

Honesty among employees may not always be trusted as people wish to get money without working for it. Dishonesty may lead some workers to provide wrong information on the time they have worked to get paid. It is also possible to pay one more or less for some work done due to improper payment calculation techniques for various roles in the construction industry. Human resource management of construction companies in Europe finds it challenging to make payments or stipulate payroll for its workers.

Late payments

Workers usually need their payments to be made on time; hence late payments demoralize the workforce leading to poor performance (Kazaz, Ulubeyli and Tuncbilekli, 2012). Workers work to earn income for their needs, thus require their payments made on time. Payments made on time is also a form of motivation for the employees. Besides, late payments damage the excellent image of the company, irrespective of the causes. As workers get paid late, it reflects in the performance of the company hence damaging the image of the company.

Salaries and wages are one factor that keeps the employees working. When payments are delay, workers lose interest in the companies hence poorly perform their roles compared to punctual payments. Motivation is vital in human resource management. As workers get guaranteed prompt payments, they get the interest to work more and perform best hence increasing productivity.

Misclassifying Employees

Emerging roles in the technological basis lack a specific classification in the companies’ human resources hence lack a particular evaluation of their payments (Grimshaw, 2016). Misclassification is a growing concern, especially in developed countries, including Europe. It is an act punishable by law but conducted to reduce the costs and taxes incurred to the government. It occurs when employee classification occurs under independent contracts rather than governmental workers. Companies should avoid misclassification to operate well since such crimes may lead to a negative impact o the company.

Emerging roles due to changing operations in construction industries have led to a lack of knowledge on how to classify the functions. Some companies also misclassify contractors to reduce the costs paid to the government. However, these acts negatively impact the companies due to changes they have to make in case legal requirements need to be followed. Evaluating payments is a challenge for most of the companies.

Quantitative Research Approach

The quantitative research approach emphasizes statistical analysis of the data collected. It involves numbers and actual data used during surveys to get findings and results or obtain the objectives of the research.

Data Collection Methods

The methods used to collect data were physical observations and the use of surveys.

Observations

Data on some of the challenges of construction companies such as health and safety issues and workplace diversity could quickly occur through observation (Kawuliwich, 2005). Observations provide quantification and measurement based on actual acts seen. Therefore, analysis is done based on the observation approach is valid and represents real facts of construction company challenges. According to (Mohammed and Edwards, 2017), observation of workers and construction companies’ management provides information on the challenges faced in the work environment. It is more reliable than the assumed data.

Data on construction companies’ challenges, such as physical risks, can only be collected through observation of the operations of companies. Observing gives more reliable information than replies given b the workers or the company management as they may as well lie to protect their image. The observed issues also reflect though the performance of the company.

Surveys

Surveys provide an actual, broad perspective and reliable statistical data from research conducted on a sample of the construction workforce population (Carrillo, 1994). Surveys depend on a sample of people in the society, giving information on a given subject. A review may occur using questionnaires and interviews on the part of the targeted population. Inquiries include short questions for the target sample to answer. (Mbazor and Okuoma, 2014) used an observation approach on a research on the multicultural workforce. The findings gotten supported that cultural diversity affects workers, and the environment influences the health and safety of workers. Surveys give appropriate information on the state of construction companies.

The survey research approach also provides analytical and statistical findings that are convenient. In the research on finding the challenges affecting construction companies’ workforce, interviews and questionnaires give first-hand information from the ones experiencing the problems. Also, data collection from various companies ensures information analyzed represents most of the companies in the industry and not only one specific one.

Data Analysis

After data collection, analysis has to take place to examine or study the data to extract relevant information that makes the findings. The research question acquires answers through the investigation.

Statistical Analysis

The data acquired was in respect to the research question- to find the critical human resource challenges facing the construction companies in Europe. According to (Alhajeri, 2011), a questionnaire on safety and health problem challenge showed that 69% of the companies had no written policies, while only 31% had laid out strategies. This analysis indicated that health and safety issue is a challenge for most of the construction companies, and some companies are trying to prevent loses through the development of policies t protect its workers. Nevertheless, the number of companies is still less.

(Bukard & Madson, 2002), research on diversity indicates that most of the construction companies are affected by language and cultural diversities in its human resource strategies of hiring. Europe consists of various ethnic groups, including Slavic, Romance, and Germanic languages; hence the people in the population are mixed up. Therefore, while acquiring workers in the company, construction human resource management has to consider diversity issues and, after hiring, ensure that communication is enhanced and workers work to achieve the same goal. The research supports the fact that diversity affects human resource management in construction companies.

The researches used in this review indicate that safety and health issues, diversity, and payroll are the key human resource issues that affect construction companies in Europe. (Tiwany and Nayak, 2013), research report indicates 47% of accidents and injury challenges, which is lower than other researches. Also, psychological strains were reported at 60.4% due to low wages, anxiety, and repetitive work. The feeling of unsatisfaction and in most of the high-performance expectations are the significant causes of psychological risks among workers. The results showed that accidents are a regular occurrence in construction industries and that psychological risks affect most of the workers due to common reasons.

Skilled workers problem has been increasing in most of the researches conducted due to fewer people joining construction training facilities. The shortage rate is above 60%, which shows that the challenge is too high, and soon, there would be no skilled construction machine operators in the job market (Brixiova, Li and Yousef, 2009). New technology is the leading cause of untrained workers as it keeps changing and developing, but with fewer people willing to learn the new operations. Consequently, a vast construction skill gap emerges.

However, these challenges may reduce by developing strategies for sustainable development (Hussin, Rahman and Memon, 2013). Human resource is the most contributing factor to the performance of construction companies in Europe. Therefore, suggestions to develop payroll strategies, have health and safety standards, and find ways to handle diversity. Such acts reduce the frequency of challenges faced by construction companies. Establishing an effective management system that incorporates different cultural backgrounds is vital in the achievement of a successful project (Kivrak, Ross, Arslan and Tunkan, 2009). Understanding and accepting the challenges affecting the country helps to overcome the problems by thinking critically to solve the issues.

Conclusion

The main challenges faced by human resources in construction industries are health and safety risks, lack of skilled workforce, diversity, and payment rate issues for the workers. Construction companies rely on the efforts of workers to achieve their objectives. The human resource is the main factor of production along with the funds. The first issue, health, and safety issues, maybe physical risks or injuries caused by chemicals used in the construction materials and psychological risks caused by stress at work. Secondly, the lack of skilled labor is on the rise in Europe as companies fail to get trained people in construction skills. Technology is its primary cause, as knowledge of development is scarce. Thirdly, diversity in the workforce due to language and communication barriers, gender inequality, and diverse ethnic groups creates a barrier for continuity of operations as communication is essential in performing every activity. Also, the fourth challenge lies in payroll due to lack of payment strategy, misclassifying of workers, and late payments to workers. The researches used a quantitative approach to answer its research question and to find solutions to the challenges of construction companies in its human resource.

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