HR for Builders & Contractors in NZ

As with any industry, HR is a crucial part of what we do in the building and contracting sector. Yet, unlike in other industries, the role of HR in the trade sector is fraught with unique challenges due to the nature of the work we do and the inherent obstacles we face with labour shortages and employee retention. You can find a comprehensive report from the Ministry of Business (MBIE) Innovation and Employment that discusses the challenges we face in the New Zealand construction industry here.

This page provides an overview of the HR challenges we face in the construction industry and your role as an HR professional in overcoming these challenges. It is supplemented with insight, tips, advice, and resources to help you navigate New Zealand’s trade sector.

HR Challenges in the Building & Contracting Sector

Contents:

Workforce challenges
- Skill shortages
- Labour retention and attraction
Health & Safety
- Legal and regulatory compliance
Performance management
Stories and advice

Workforce Challenges

As anyone in the industry will attest, labour retention in the trade sector has been a significant challenge in New Zealand for at least the past eight years, and this was exacerbated by the COVID-19 pandemic. Firms are finding it difficult to find and retain skilled and unskilled labour, with the most significant workforce issue being the lack of available high-skilled workers.

Why? Well, while the problem is not entirely new, a key reason is changes to immigration policies since the pandemic, which have made it harder for immigrant workers to come to New Zealand. Historically, we have relied heavily on the influx of labour from overseas to fill skill gaps, with migrant workers making up around 7-10% of the overall construction workforce.

Another significant contributing factor to the domestic skill shortage is the attraction of finding a better wage elsewhere, particularly in Australia, where the average salary for a construction worker is almost double what it is at home, and this is often coupled with attractive relocation packages. Further, Australia has comparatively better immigration policies than we do, which include multiple work-based Permanent Residence visa categories and state sponsorship options that are more attractive compared to New Zealand’s more stringent requirements.

Is there anything that can be done? Well, it’s not like we can suddenly start paying everyone twice as much. Still, efforts are being made throughout the trade sector to address our labour retention problems, particularly for high-skilled workers. Sector-wide, policies are being put in place to create more inclusive pathways for historically unrepresented groups, particularly women, to encourage more workers to enter the construction industry. We have a wealth of domestic talent that is currently under-utilised, and we must take advantage of it if we are to see our construction sector thrive. Currently, female representation in the construction industry stands at only 18%. We need to show young women the opportunities available in the sector and to challenge traditional gender roles.

Is it all doom and gloom? It certainly isn’t. Infrastructure building activity is forecast to steadily increase, reaching a new high in 2026, driven by extreme weather rebuild efforts and increasing resilience throughout the country. The MBIE reports that despite short-term decreases, overall construction activity is projected to remain steady and increase from 2028 onwards.

What can I do about it? If you’re an HR professional in the construction industry, you need to think creatively about how we attract and retain talent. Expand your recruitment campaigns into areas, demographics, and communities you wouldn’t have historically targeted, and diversify your workforce to tap into a wealth of talent and skilled labour that is currently under-utilised.

Health & Safety

The construction sector has the highest number of new work-related claims accepted by ACC, accounting for 17% of all claims despite only making up 10% of the workforce. This is, indeed, a serious concern.

Of course, the nature of what we do is necessarily going to result in more injuries than in other industries. Still, with two workers on average dying every month in the year 2021, health and safety in the construction sector is imperative.

You can read Worksafe’s full 2022 report on the need for a renewed focus on health and safety here.

To summarise the report:

WorkSafe NZ, CHASNZ, and the Council of Trade Unions urge renewed focus on construction health and safety.
Since January 2021, at least two construction workers have died monthly, and over one worker per day has been seriously injured.
Poor health and safety practices affect workers, families, and communities daily.
Chief Executive Phil Parkes stresses immediate change is necessary.
President Richard Wagstaff acknowledges the poor safety record and supports investigations but calls for proactive measures.
Chief Executive Chris Alderson emphasises the need for ethical improvements and better resource allocation for site supervisors.
A concerted effort from the entire supply chain, including clients, designers, contractors, government, and workforce, is required.
Company owners and directors must meet legal safety obligations or face swift enforcement.
Workers are encouraged to report poor practices, and stakeholders are committed to supporting better health and safety standards.

What can I do about it? New Zealand has stringent workplace health and safety regulations, so ultimately, the number-one thing that HR professionals in the construction industry can do is ensure that those regulations are meticulously followed and strictly enforced.

As a guide, ensure the following issues are addressed:

Hazardous Materials

Exposure to Hazardous Substances: Construction workers are at risk of exposure to hazardous materials like asbestos, lead paint, and cement dust, which can lead to respiratory and other health issues.

Regulatory Compliance

Health and Safety at Work Act: Businesses must comply with regulations that focus on managing critical risks and taking actions to reduce workplace harm.
Enforcement and Accountability: WorkSafe NZ emphasises the need for company owners and directors to meet legal requirements, with swift enforcement for non-compliance.

Workplace Housekeeping

Site Management: Good workplace housekeeping practices, such as maintaining tidy sites, clear access ways, and proper signage, are essential for preventing accidents and improving efficiency.

Mental Health and Well-being

Support Programs: Initiatives like Mates in Construction provide on-site training and support for mental health, addressing the high rates of suicide and mental health issues in the sector.

Performance Management

Performance management isn’t a unique challenge we face in the construction sector. Following general best practices to ensure productivity and efficiency is as essential for us as it is in any industry.

Here are some general best practices for performance management, including establishing KPIs and implementing an effective performance management system.

Establishing Key Performance Indicators (KPIs)

Labour Productivity

Measure output per labour hour
Track labour hours against project milestones
Monitor productivity rates for specific tasks

Project Timelines

Track project completion against scheduled deadlines
Monitor milestone achievements
Measure time spent on rework or delays

Quality Control

Track inspection pass rates
Monitor defect rates and types
Measure customer satisfaction scores\

Safety Metrics

Record incident rates and near-misses
Track safety meeting attendance
Monitor compliance with safety regulations

Cost Management

Measure actual costs against budgeted costs
Track material waste rates
Monitor equipment utilisation rates

Implementing an Effective Performance Management System

Data Collection and Analysis

Implement digital tools for real-time data collection on job sites
Use construction management software to centralise data and generate reports
Conduct regular data analysis to identify trends and areas for improvement

Regular Performance Reviews

Conduct weekly team performance meetings
Hold monthly individual performance discussions
Implement quarterly project performance assessments

Training and Development

Identify skill gaps based on performance data
Provide targeted training programs to address weaknesses
Offer mentorship programs for skill development

Incentive Programs

Develop performance-based bonus structures
Implement recognition programs for high-performers
Create team-based incentives for project success

Continuous Improvement

Regularly review and update KPIs to ensure relevance
Encourage feedback from employees on the performance management system
Benchmark performance against industry standards and adjust goals accordingly

Implement these strategies into your HR model, and watch your firm’s productivity soar, as well as employee satisfaction and retention.

Stories And Advice

In a bustling corporate office, Sarah, the head of Human Resources, noticed a trend. The employees in the Marketing department seemed drained, their enthusiasm waning as deadlines loomed. Determined to uplift spirits, Sarah implemented a simple yet profound gesture: a weekly "Recognition Board." Each Monday, team members wrote kudos for their colleagues, celebrating achievements big and small. Soon, the once-muted office buzzed with energy. Employees felt valued, their efforts acknowledged publicly. Productivity surged, and the atmosphere transformed. The lesson was clear: a culture of recognition not only boosts morale but also nurtures a sense of camaraderie that propels teams toward success.

Advice: Nurturing Growth Through Mentorship

Human Resources isn't just about policies and procedures; it's also about fostering growth. Jack, an HR manager, understood this well. He paired new hires with seasoned employees as mentors, creating a support system that transcended mere job training. Maria, a recent addition to the team, found herself guided by Emily, a veteran in the company. What began as weekly check-ins evolved into a genuine friendship. Emily shared her experiences, offering insights beyond manuals and protocols. Maria flourished under Emily's guidance, gaining confidence and skills she never imagined. Jack's approach not only enhanced job satisfaction but also forged bonds that enriched both professional and personal lives. The lesson here: true mentorship goes beyond teaching tasks—it shapes careers and cultivates a sense of belonging.

Human Resources