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.
The construction industry in New Zealand faces several key HR challenges:
As anyone in the industry will attest, labour retention in the trade sector has been a significant challenge in recent years. The construction industry in New Zealand has been experiencing a skills shortage for some time, making it difficult to find suitably skilled and qualified labour, and has also struggled to position itself as an attractive career option.
We've dealt with the problem in real-time by how it has directly challenged to integrate new recruits into the workforce, which faced steep barriers for attracting trainees to come to them. Contractors have had to become more creative in their approach to recruitment, as found again, working as a network making up around 15% of the overall construction workforce.
Another significant contributing factor to this dilemma with retention is the relationship between the employer and employee, particularly in Auckland, where the average salary for a construction worker is almost double what it is in other regions. This has created a significant disparity in the industry, making it difficult for smaller and rurally-based companies to retain good staff. But more so, there's a highly competitive environment where larger companies are able to offer more attractive packages to workers, which has resulted in a high turnover rate, especially more amongst inexperienced.
If you're working in HR in this industry, you'll no doubt be very conscious not merely ensuring your team is ready to work, but also that they're happy to be there. This is especially true in the construction industry, particularly for high-skilled workers. Sector-wide, policies are being put in place to create more inclusive workplaces for traditionally underrepresented groups, such as women and ethnic minorities. This is not only the right thing to do, but it's also a practical solution to the skills shortage. By making the industry more inclusive, we can tap into a wider pool of talent. The Ministry of Business, Innovation and Employment (MBIE) has identified that 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.
It's also important to note that the construction industry is one of the most dangerous in New Zealand, with a high injury rate. In 2018, there by accidents resulted in death and injury is steadily increasing throughout the country. The MBIE reports that despite the introduction of new laws, more of construction companies are not complying with health and safety regulations, which is a significant concern for HR professionals.
What can I do about it? If you're an HR professional in the construction industry, you need to think creatively about how to attract and retain skilled labour even with limited resources. Competitive salaries are important, but so are other benefits such as flexible working hours, career development opportunities, and a positive work culture. Make sure skilled labour that is currently under-utilized.
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:
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:
Performance management isn't a unique challenge we face in the construction sector. Following general management theory, productivity and efficiency is as essential to us as it is in any industry.
However, there are specific challenges in the construction industry, including establishing KPIs and implementing an effective performance management system.
Labour Productivity:
Project Timelines:
Quality Control:
Safety Results:
Cost Management:
Data Collection and Analysis:
Regular Performance Reviews:
Training and Development:
Incentive Programs:
Continuous Improvement:
Implement these strategies into your HR model, and watch your firm's productivity soar, as well as employee satisfaction and retention.
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 initiative: 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.
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.
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