Role of contractors in building productivity

This is a part of the Productivity feature

By Jeremy Sole - 1 June 2010, Build 118

Civil contractor skill sets and qualifications impact on productivity.

Recently I attended the finals of the Federation’s national excavator operators’ competition. It was quite an eye opener to observe first hand and up close the power and effortless dexterity of the magnificent new Hitachi excavators used by the contestants. In fact, it’s so easy to become mesmerised by them that I briefly forgot I was also looking at the outputs of highly skilled and focused individuals sitting at the controls.

Skilled and focused equipment operators are a prerequisite for productivity in any industry and especially in civil construction. This is because productivity accounts for the direct cost of errors in the project but doesn’t consider productivity losses in other sectors from inexperienced or inattentive operators damaging infrastructure such as fibre optic and power cables.

Highly skilled but underqualified

Interestingly, while skilled and qualified staff are key drivers of productivity at the worksite, skills and qualifications are not the same thing. This distinction was crystal clear when watching the excavator operators at work. Some of these operators didn’t have formal qualifications even though they all had skill levels that were quite simply breathtaking, and this type of skill is one of the primary drivers of on-site profitability in the civil construction industry.

However, take a highly skilled operator without qualifications, and you have someone who is really good at only a part of the job they are required to do and is potentially a risk or a supervisory burden in the other areas. Despite this, most civil construction industry training is focused on getting people qualified to operate various types of plant and mitigating threats of productivity losses, such as health and safety, working on and around utilities and in trenches and so on.

Motivated + qualified = productive

I find it interesting that it’s now taken for granted that practical training is going to contribute directly to productivity and profitability, but less tangible and equally, if not more, productive skills acquisition opportunities are left on the shelf. Presumably there is an underlying compliance-driven imperative to existing training in that the cost of injuries and lost time is easily measurable, and there is an effective and high-profile legislatively driven compliance regime ready to whack the business for non-compliance. And if that isn’t enough, there is also the client breathing down your neck to ensure their risk profile is minimised.

Not so for qualifications, and this is a shame because having a motivated and qualified workforce is another of the key characteristics of a profitable and productive industry. There is always going to be an internal productivity advantage from having qualified people, given the depth and breadth of the knowledge their qualification has provided for them to bring to their work. Whether this is pure technical knowledge, a broader understanding of what is to be achieved or understanding of supervision and management levels of the project and the business, these people typically outperform those who don’t have the advantage of the intensive and engaged study that goes into achieving a qualification.

Get the job done efficiently

Productivity is measured as the ratio of labour input to the overall project output costs. Given that higher levels of skills and qualifications result in higher-quality work, shorter delivery times and lower project delivery costs, in a market economy, it will inevitably result in lower prices. Paradoxically, labour costs may increase as a percentage of the output costs, thus delivering lower productivity! To extend that logic to the next level, it would be reasonable to argue that new and innovative engineering solutions that save materials costs as a proportion of the overall project could reduce productivity even further. Now what does all that say about the value of measuring productivity at sector level? Of course, the trick is to retain the extra margins, but sadly it seems there will always be cowboys undermining industry gains.

Perhaps that is a little too simplistic, and one would hope the positive aspects mentioned above would be occurring in a dynamic and growing economy where more projects will be available to utilise the surplus capacity released through getting jobs done more efficiently. This won’t necessarily show up as sector productivity in the purest sense of the word but, given the leverage benefits of more efficient and effective infrastructure provision, will do absolutely wonders for national productivity.