Readying Sri Lanka’s construction industry workforce
Aug 23, 2016 – In the construction industry, we have experienced that even before the mega projects like the Port City, or the Megalopolis Project, and other infrastructure projects are to commence in 2016, the impact of the shortage of the appropriate skills and the workforce in general, can be already seen.
At a recent meeting, with the Chairman of the Board of Investment, our Chamber raised the issue and even he confirmed that, there were many requests from developers and contractors, to import their requirements of human resources.
In this connection, our Chamber has over the past 2/3 years, been highlighting the anticipated shortage of skilled and unskilled labour, for construction projects at different forums. However, the response from the authorities have not been positive.
The question that many would want to know, is the cause for the shortage, and why it was allowed to reach a crisis point? The answer to these questions are not difficult, as the main reason could be attributed to the negative to low – growth of the Construction Industry, since late 1990’s and up to the end of the internal conflict in 2009. The GDP from the Construction Sector constituted only 7.34% in year 2000, which total has been significantly down from 1980 to 1990, when it was on average 7.9%.
Furthermore, the number employed in the Construction Industry workforce in the year 2002 was 386,475 (excluding North and East), which continued to decrease up to 2009.
Consequently, not only has the Skilled Workforce, but, also the Technical and Professional Workforce, have left Sri Lanka, looking for better prospects not only in the Middle East, but, also elsewhere in Asia and other Countries. The Professionals have mainly left the country for greater security, further education for themselves, as well as to educate their children, and enjoy a better quality of life. The other two categories of Skilled and Unskilled persons, have left the country primarily to earn better wages.
In addition, at present, the Youth and the Young Workforce, migrate to South Korea, Japan, and a few other countries after learning the languages in seeking any type of Employment. The situation is further aggravated by the same age group between 18 -35, being employed locally as three wheel drivers, and civil security guards.
Modernising construction is a tough nut to crack. For various reasons, despite long-running improvement agendas in most of the World’s most developed markets, construction in Sri Lanka remains a wasteful, Tradition-bound industry plagued by delays, cost overruns and contractual disputes.
Meanwhile, the numbers joining the construction industry, have drastically reduced. This may be due to lack of Security and Safety with regard to working in it for fears they may be laid off during a slump in the economy or have to face physical dangers.
The other reasons may be, that there is no dignity of labour as all construction workers are classified by the type of work they do and are not respected by the public who label them masons, carpenters or similar names. This has affected particularly the young school leavers, as they look for white collar jobs, and are against working in the construction industry as welders, fabricators, electricians, masons, carpenters, plumbers among others.
Therefore, it is now necessary to identify the main problems including the following:
1. The Government needs to play an active role in the development and improvement of the Technical Support Infrastructure.
2. The low level of investment in education and training.
3. The significant change in technologies, processes and roles instigated by changing regulatory role and, more importantly, the decline in the dominance of the public sector in major projects.
4. The low level of investment in R&D.
5. The low penetration of IT in the industry.
6. Firm-based approach to export and the lack of coordinated approach to marketing the industry.
In the above context, the Government should facilitate along with the Chambers of Construction and the other Allied Associations , a Campaign to attract the Youth to the Industry by giving them a better understanding and picture of the advances made in the Construction Industry, particularly , in the 21st Century, where Modern Technology has been introduced; not only for the purpose of Construction, but, also the use of Software, used for Design and implementation of Architecture , Engineering, Project Management , Quantity Surveying etc. Such action could transform Sri Lanka’s Construction Industry to be competitive with any other developed country and to work in collaboration with Foreign Counterparts (if necessary) , by using Computer Software such as, Autodesk Revit, Primavera, and similar Software.
Other impacts of IT is evident in Physical Planning, for Cities, and the Design of Mega Projects such as the Megalopolis, Port City, Infrastructure, Traffic Planning , making models using Computer simulation, etc. The Software, is applicable for many other Disciplines, to achieve the edge in today’s competitive environment.
In other countries, particularly, when the transformation of a country takes place and is planned to achieve targets within a specified period to attract the manpower resources, various incentives are offered to the young.
In fact, in South Korea, not only were the wages higher than other professions, but professionals, technicians and the workforce were given apartments and other perks that kept them within the country.
If this happens, even a “reverse brain drain” could happen and those who have left the country for better prospects may be encouraged to return.
However, in the interim, at least for the next 3 to 5 years, developers, consultants and contractors should be allowed to import their labour and other requirements from overseas. I am aware, that Nepal, Bangladesh, Burma, India, are a few other countries that export their labour.
When embarking on the vision of the Prime Minister Ranil Wickremesinghe, for the next phase of economic transformation of Sri Lanka by 2020, it is imperative that for the Construction Industry, to meet its challenges, the pre- requisite, is to ensure its Human Capital.
In its absence, the expected FDI’s , and other Development goals of the Government and the Private Sector may not happen exclusively from using Local inputs. If not, the dependence on the foreign resources will be necessary.
The way forward, would be to affect a paradigm shift in the image, processes and purpose of the construction industry. It requires five strategic thrusts for the development of Sri Lanka’s construction industry. These are as follows:
1: Enhancing the Professionalism of the Industry.
2: Raising the Skills Level.
3: Improving Industry Practices and Techniques.
4: Adopting an Integrated Approach to Construction.
5: A Collective Championing Effort for the Construction Industry.
After identifying the demands of the human capital in the different sectors of the construction industry, it will be necessary to determine whether the sectors have reached the threshold in human capital and frame a policy environment that would be appropriate to meet the challenges. Alternatively, the deficiencies may need to be covered by the earlier mentioned import of human resources.
In the above context, the demand for the construction workforce, under its different categories, are shown in the attached Table. It indicates a major thrust in training several Skills. On the other hand, it’s duration will be beyond 2020 to meet the challenges of the envisaged development programme of the Prime Minister. Consequently, a skills gap is inevitable, in such categories of the construction workforce. This implies the need to seriously consider the import of a foreign workforce, under specified conditions.
LABOUR PROJECTION FOR THE SRI LANKAN CONSTRUCTION INDUSTRY FOR NEXT FIVE YEARS (up to 2020)
Note: Allied services may require at least half the above number
Another factor that has to be considered is the supply of Materials for the Construction Industry. At present, there is a shortfall of sand, cement, timber, bricks, cement concrete blocks, as basic construction materials. However, for the future demand, Sri Lanka will need a strategic plan for its production.
The human capital for these industries will need to ensure consistent production of these materials needed for construction. If not, such materials would need to be imported to Sri Lanka to meet the envisaged construction.
Furthermore, at present, professional consultancy firms are confined to a limited number of reputed firms providing in house consortium services. On the other hand, in a future strategy for human capital, the opportunity must prevail for a larger number of lead firms, either exclusively local or with foreign collaboration.
Similar to the above, there are about 07/08 mega contractors with necessary in – house infrastructure such as machinery, equipment, human and financial resources, and with the latest technology and systems of construction capable of handling infrastructure projects whether it be in the roads, expressways, power, water supply and drainage or the building sector.
Very often these firms have been working to full capacity.Therefore, by 2020 if we have to be self – sustaining and are to use human capital more intensely, we need at least another 20 mega firms to meet this challenge.
The existing resources for education, both for skills and professional training particularly in the new disciplines, need to be increased, and the Country should move forward from labour intensive to more skills intensive types of training, in the different disciplines of the construction industry. This concept will bring in a new class and quality of the work force.
Therefore, the Government and the private sector must utilize “Human capital as a skilled labour force” related to the economic added – value that is generated by its input, similar to other production factors such as financial capital, land and machinery. A further aspect is to promote investment through education and training, to meet the human capital requirements of the different disciplines.