Impact Of Construction Skilled Labour Shortages On The Competitiveness Of Building Sector In Nigeria

Project and Seminar Material for Quantity Surveying QS

Impact Of Construction Skilled Labour Shortages On The Competitiveness Of Building Sector In Nigeria


Skilled workforce is critical to the socio-economic development of a country and forms the backbone of the construction industry. This study investigated the problem of construction skilled labour shortages and their impact on the competitiveness of building sector in South-East, Nigeria. The objectives were to evaluate the magnitude of skilled labour shortages, identify the root causes of skilled labour shortages, investigate the impact of skilled labour shortages on the competitiveness of construction companies in South-East, and to determine strategies for mitigating skilled labour shortages.

The study adopted survey research strategy using structured questionnaires. The study targeted 100 construction professionals (architects, builders, engineers, quantity surveyors, and project/construction managers) engaged in indigenous building contracting firms operating in three states of South-East. The data collected were analysed using Mean Score Index, Standard Deviation, Kruskal Wallis Test, and Spearman Rank Order Correlation Analysis. The research findings revealed that, poor funding of vocational skills centers, ageing skilled workforce, rapid growth of self-employment, lack of craft skills appeal to young people,andpromotion of diploma and degree over technical are the top causes of skilled labour shortages in South-East.

Construction skilled labour shortages also affect the competitiveness of construction companies in terms of quality of work, project completion time, cost of project, financial profitability, and marketing capability. Firms’ competitiveness in South-East and construction skilled labour shortages is therefore significantly interrelated. The implication is that; firms’ competitiveness can be improved by tackling the problem of construction skill shortages. The study therefore recommends effective deployment of the relevant strategies validated in this study by government, professional regulators and contractors in order to curb skilled labour shortages in the construction sector in South-East.

Chapter One


1.1 Background of the Study

The output of the construction industry has been consistently growing (with the exception of a slight dip in 2005) since the recession in the early 1990s ± with an average annual growth rate of approximately 2.3%. This has been matched by an overall increase in the size of the construction workforce from 1.8 million in 1995 to 2.3 million in 2007. however, the industry have been characterized by its cyclical nature. The last recession in the construction industry took place in the early 1990s. This was preceded by a sudden tightening of monetary policy in 1988 which affected both the housing and property markets, which triggered the recession that afflicted the industry throughout this period (Hillebrandt et al., 1995). This demonstrates that the construction industry is prone to the wider economical climate in which it is operating.

Employment in the construction sector is heavily skewed towards smaller businesses and self-employed. According to construction SME statistics (2006), SMEs account for 83% of employment within the sector and produce around 68% of the sectors’ output. However, self-employed or sole proprietors account for 40% of the construction workforce (LFS, 2006). It can be argued that construction can be regarded as a large industry mainly comprising small to medium sized companies (Langford and Male, 2001; Stocks and Male, 1991). Moreover, the construction industry is comprised of the following sub-sectors: repair and maintenance (R&M), housing, infrastructure, commercial and industrial.

According to recent CSN (2008) projections, it appears that the infrastructure sector was the most buoyant with an average annual forecasted growth of 5.7% over the next 4-yearsh. This could be explained by a number of large-scale projects that are underway or planned, such as the Thames Link, and Terminal East scheme at Heathrow, and the redevelopment of Birmingham New Street station. This discussion depicts the heterogeneous nature of the construction industry which stem from its diverse employment and sub-sectoral structure.

Government reports, aimed specifically at the construction industry, found that the industry’s productivity performance, workforce training and skills shortages are amongst the key challenges facing the construction sector historically (see Murray and Langford, 2003). As such, concerns about the construction workforce and the level of training in the industry are not new and could be traced back to the White Paper entitled µIndustrial Training: Government Proposals published in 1962, which argued that training is barely adequate and some definitely unsatisfactory. It recommended that Industrial Training Boards (ITBs) should be established in order to take on the responsibility of training across different industries including construction. There was a concern that µpoaching¶ skilled labour meant that firms may lack the necessary economic incentive to invest in training people who, once trained, may leave them for other jobs. The government wanted to apply a shock to those firms that were neglecting training and poaching skilled labour and a levy system seemed an appropriate measure (CITB, 1998).

As a result, the Industrial Training Act in 1964 gave the CITB the statutory power to impose a levy on construction companies. The purpose was to support the quality and training within the industry as well as sharing the cost of training more evenly between firms. Given that the industry is largely regarded as labour intensive, it is notable that workforce skills development and training remain a key challenge facing the industry that could potentially impede its productivity performance. This is evident when considering the recent findings of the Construction Industry Trade Survey (2008) which indicated that firms continue to be affected by turning down work and experiencing delay on projects due to labour shortages across various construction trades, such as steel benders and fixers; plasterers and carpenters and joiners. As such the industry reliance on migrant workers became inevitable. This may be a result of the industry traditionally being characterised by low participation levels of training when compared to other industries, in addition to its failure to attract and retain enough new recruits (See Dearden et al., 2000; Morton, 2002). Indeed Clarke and Wall (1996) found that the construction process (on house building projects) in the UK depends on a lower level of skill than in Germany, which in turn leads to lower productivity levels when compared to Germany. Arguably, the labour force or the human resource in construction is the main engine driving other areas of change in the industry. If workers are not equipped with the necessary skills, it is difficult to see how they can perform competently, productively and safely on construction projects.

1.2 Statement of the Problem

The scarcity of qualified skilled-men impacts on construction projects in every stage of project life cycle from the initial scoping to completion, and the effectiveness of the construction industry in every country depends on the quality of the trained workforce (Muya, et al. 2004; Porter, 2005). Expanding and improving craft training is critical in order to improve skills, attract younger craft workers into the industry, decrease injury rates, and greater use of new technologies (Dantong, 2006). However, for any training 3 program to be useful and efficient, it must start with a needs assessment (Fadil and Ruslan, 2006). Dantong (2006) has lamented the high level of neglect accorded to training craftsmen and artisans in the Nigerian construction industry. It was observed that, the training of construction craftsmen in Nigeria which should have enhanced productivity and competitiveness has suffered a lot. Many initiatives have fallen short of their intended objectives with a resultant mismatch between the training offered and the workforce training needs (Fadil and Ruslan, 2006). This in turn leads to poor workmanship, low productivity, late completion, cost overruns and high accident rates (Dandong, 2006). Past researches (Wahab, 1991; Odusami, 2009) tended to focus on investigating training needs of project managers and site managers, in the Nigerian construction industry. This suggests that construction craft skill training is either not fully appreciated or is not considered important enough to receive the attention it deserves (Aniekwu and Ozochi, 2010) despite its importance to the industry. There is therefore necessary the need to explore craft skill training needs in the Nigerian construction industry in order to allow for training needs to be more closely harmonized with development priorities and the delivery methods.

1.3 Justification for the Study

A study like this that aims at investigating craft skill training needs is of significant importance to the Nigerian construction industry. The study will provide training managers and professionals with the knowledge of how to identify training needs within an organization in order to help direct resources to the areas of greatest need. The study will also allow the training managers to set the training objectives by answering two very basic questions: who, if any, needs training and what training is needed in the organization. The findings of the study will also increase better coordination of 4 workers‟ training. This is in line with Augusto et al. (2009) suggestion that more research is needed to identify craft skill training needs in the construction industry.

1.4 Aim and Objectives

The specific objectives of this study are:

  1. To evaluate the magnitude of skilled labour shortages.
  2. To identify the root causes of skilled labour shortages.
  3. Investigate the impact of skilled labour shortages on the competitiveness of construction companies in South-East.
  4. Determine strategies for mitigating skilled labour shortages

1.5 Research Questions

  1. What is the extent of skilled labour shortages in the South-east?
  2. What are the causes of skilled labour shortages in the south-east?
  3. What is the impact of skilled labour shortages on the competitiveness of construction companies in the south-east?

1.6. Scope and Limitations

1.6.1 Scope

The study addressed (informal) skills gap of skilled-men in the South-east, Nigerian. The skills include masonry, carpentry, plumbing, painting, and iron bending in the construction industry because these categories of skills are the most common and available in every construction activities in the country. The study focused on the perception of construction professionals and the skilled-men from small, medium and large construction companies located in the South-east Nigeria, which include Abia, Anambra, Imo, Enugu, and Ebonyi states. This is because of high rate of constructions activities and craftsmen within the cities. The professionals include architects, civil engineers, builders, and project managers who have at least five years working experience in the industry. This is because these professional are more directly involved in building production. Emphasis was given to professionals employed in medium and small firms because it is believed that as supervisors, they are more knowledgeable about craft skills training requirements. Professionals working in public service and those in private practice were not considered because it is thought that their involvements in construction works are mostly on consultancy basis.

1.6.2 Limitation

The study acknowledges the limitations that may be imposed by lack of covering the country as a whole. The study further acknowledges the limitation that may be imposed by the method of data collection that was used, i.e., questionnaire survey. Although this method has been used in various construction researches, it however has its own limitations such as availability and accessibility of respondents and the question of representativeness of samples. Similarly, surveys can only show the strength of statistical association between variables and they provide no basis to expect that the respondents correctly interpret the questions. All these may impact on the generalisation that can be made from the results. The study also acknowledges the non inclusion of craftsmen categorisation in the study because majority of the craftsmen in the construction industry acquired their training on the job Ubenyi (1999) and Anigbogu (2002).

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

It’s worth talking about construction workforce management employee productivity and project results. Other reasons apart from those listed in the previous chapters, responsible for the emergence of low-skilled workers in Nigeria includes low pay, low incentive, safety and health deficiencies, lack of a standard care and payment schedule, willing to teach experienced workers. The lack of skills poses the greatest threat to the future life of the building and will continue as the need for construction increases. Rising demand is putting pressure on the construction sector, which is struggling to meet the growing demand for its services.

Demand for construction will increase as supply from middle and senior management declines. Skills are lacking across the industry, and the construction industry is struggling to meet the growing demand for its services. The skills shortage will continue as demand for construction increases and the government sector, where engineers, naturalists and craftsmen are most in demand, will become increasingly acute. There is a worldwide shortage of professionals and managers, and the construction sector is becoming increasingly global. Contractors and their clients, who are human, material, logistical and financial resources, are used unsustainably. As projects develop, companies are expected to expand more of these resources domestically, undermining the company’s ability to ensure efficiency and timeliness.

5.2 Recommendations

In the light of above conclusions, however, the following recommendations are offered to increase the performance of skilled workers in the South East, as this will greatly contribute to reducing the poor quality of the infrastructures being built in the area.

Entrepreneurs and other construction stakeholders in Nigeria should take responsibility for the training of skilled workers through well-established skills development centers.

Therefore, awareness programs and workshops should be organized to train skilled workers on the importance of improving their performance towards the effective implementation of construction projects in Nigeria.

To cope with the complexity of construction, the training areas for construction companies with small and medium-sized crafts must address the understanding of drawings (buildings, civil, mechanical, plumbing and electrical), basic safety on site and more skills at the level to solve the problem of lack of skills.

Construction companies should encourage traditional learning and training in the workplace among effective craft training methods in Southeast (Nigeria).

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