Issues facing subcontractors

By , , and - , Build 150

Subcontractors involved in the Christchurch rebuild say seven key factors need addressing so that they can continue to support the rebuild.

Construction of new-build office block, Christchurch.
Construction of new-build office block, Christchurch.

WITH SMALL BUSINESS OPERATIONS and limited capacity, subcontractors are particularly vulnerable to market forces and fluctuating workflows. Subcontractors in Christchurch continue to face a number of challenges as they rebuild the city.

A research study following 13 case study organisations provides insight into everyday issues facing subcontractors. Seven key issues faced by subcontractors require some innovative industry solutions.

Increased workforce mobility

Construction industry workers are generally mobile, responding to major developments and infrastructure projects across the country. Several subcontractors faced competition for construction employees from infrastructure investment and housing developments.

Subcontractors report that workforce mobility is often an issue for the industry as employee turnover rate is increased by increased competition. If labour mobility in the construction industry rises, this affects industry costs, and these costs increase the overall rebuild budget.

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Potential shortages of workers and materials

Resourcing shortages have been a recurring issue for the rebuild. Feedback from case study subcontractors continues to identify potential issues in the supply of labour and materials for the Canterbury reconstruction efforts. Subcontractors identified the vertical rebuild in central Christchurch as facing the most workforce challenges.

Subcontracting businesses are also losing people from repair-related jobs, which are perceived as having a low margin and being more demanding. Workers are drawn to new developments in Canterbury and other parts of New Zealand, which are seen as more attractive.

There are also still hot spots for skill shortages, for example, project managers and general labourers. This is particularly the case in Christchurch where unemployment is low and infrastructure, housing developments and the city centre rebuild are progressing. Subcontractors report heightened competition for people, which is still likely to increase.

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Uncertain workflows

Several subcontractors report concerns that changes in project timeframes result in changes to the peak levels of projected labour demand.

Previous case studies by the research team identified potential short-term skills challenges as anchor projects commence. There is likely to be a shortfall in the capacity and skills needed for CBD construction and to maintain the progress of existing projects. These include those managed by SCIRT, repairs by Fletcher EQR and new housing developments.

The size of any workforce shortfall is dependent on factors such as the rebuild pipeline and the rebuild trajectory (predicted and actual market changes). The ability of government, project clients and contractors to redeploy workers – new entrants, apprentices and workers – throughout Christchurch and the Canterbury region is also key.

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Required social infrastructure

Significant other challenges reported by subcontractors include the need to provide structural and social infrastructure, including accommodation solutions and housing, to support the construction workforce. Otherwise, there is a likelihood of increased mobility to work outside the Canterbury region.

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Ageing workforce

The demanding physical requirement of the majority of jobs in the construction industry means the career span of workers using physical labour is typically shorter. This leads to early retirement and a loss of valuable knowledge and skills.

Subcontractors are worried about their ageing workforce and likely retirements in their organisations. Expertise and knowledge of senior workers are gradually lost as they retire.

Several subcontractors suggest that much of the skills, knowledge and experience workers gain working on infrastructure repairs and rebuild could be lost, as there seems to be no mechanism to capture knowledge.

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Skills development and training

Across the case studies, there is also a perception the subcontracting sector lacks a long-term career focus. This deters candidates from considering the industry as a potential career.

Subcontractors grapple with requirements to train staff on limited budgets and mostly use informal training mechanisms rather than externally offered courses.

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Poaching of staff

Several subcontractors say that efforts made to train up a worker put them at greater risk of having their employees poached by other companies seeking workers with higher skill levels.

Subcontracting businesses have historically faced cycles of workforce supply and demand and, as a result, are adaptable to market changes. Subcontracting businesses often find innovative solutions to any workforce problems. The research team is currently exploring means of supporting subcontractor businesses in developing long-term resilient businesses in Christchurch.

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The project is funded by BRANZ, MBIE and EQC.

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Articles are correct at the time of publication but may have since become outdated.

Construction of new-build office block, Christchurch.
Construction of new-build office block, Christchurch.