The Islamic University-Gaza

Higher Education Deanship

Faculty of Engineering

Civil Engineering department

Construction Management

The Development of Human Resources in the

Construction Industry in Gaza Strip

Prepared by

Hani Suliman Alzraiee

Supervisor

Prof. Dr. Adnan Enshasi

A Thesis Submitted In Partial Fulfillment of the Requirements for Degree of Master of Science in Construction Management

The Islamic University of Gaza-Palestine

2007

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Dedication

This work is dedicated to my parents, wife and

family for their endless support

Hani Suliman Alzraiee

III

Acknowledgment

I would like to express my deepest appreciation to my

supervisor professor Adnan Enshassi for his valuable

advises and encouragement and professional support and

guidance.

Deepest appreciations for the staff of construction

management at the Islamic university-Gaza, especially Dr

Kamalin Shaat, Dr. Rifat Rustom, Dr Mohamad Ziara, Dr

Majed Alfara, and Dr. Sami Abo Roos for their academic

and scientific supervision.

Deepest thanks for Al-Babteen Scholarship Foundation

and Palestinian Red Crescent Society for Gaza Strip for

financing my study, and special appreciation to Mr. Fathi

Shahin.

Deepest thanks to Dr. Nafth Brakat for his statistical

advises

Gratitude to Construction Managers, Site engineers and

Construction Workers for their participation in filling the

questionnaires.

IV

Abstract The development of human resources in construction industry has become a

necessity over the last few decades; the un-development of human resources is

a major factor inhibiting effective planning and implementation of

construction projects in Gaza Strip. The employment of craftsmen in

construction is characterized by unsuitability; the construction worker is hired

on a project with the objectives of working him out of job by completing the

project.

The construction industry faces many challenges. Many of these challenges

arise from the need to keep a skilled and competitive craft workforce,

challenges such as changing demographic characteristics, changes in the

economics and technology, difficulties in maintaining a skilled work force,

rapid changes in the economy, social changes and organization technological

environment changes.

The main objective of this study is to study the causes of construction workers

dissatisfaction in the construction sectors, identification of the factors that

affect the development of the human resources in the Gaza Strip construction

industry and development of a model for the human resources development in

construction sector.

The results point to that the main causes of construction workers

dissatisfaction are: lack of possibilities for better future in the construction

sector, lack of future skills improvement and training by the employer, lack of

job security, lack of necessary incentives, working hours per day exceeding 8

hours and delay in salary payment

The results indicated show that the main factors for human resources

development in the construction industry are: skills development of manpower

to increase performance, availability of appropriate training programs that can

V

be implemented and measured, improve communication skills between project

parties, political and security stability in the region for investment in

construction and availability of training institutions to develop manpower

skills. The finding of the study concluded the important of construction

workforce characteristics, statistics and future trends. It also aims to the

perceptions of the construction workers and employers. The findings of the

study are of immense importance to policy makers in their mission to maintain

skilled and adequate construction workforce able to face the future demand of

this industry.

The study recommends gathering statistical information on the construction

workforce available in the construction sector, conducting training and

education programs for the project mangers, site engineers and workforce to

improve their skills. In addition to this a conceptual model for the

development of the human resources in the construction industry in Gaza Strip

was designed.

VI

VII

Table of Contents

Dedication. II

Acknowledgment.. III

Abstract. IV

Abstract in Arabic.. VI

Table of contents... VI

List of abbreviations.. XIV

List of tables.. XV

List of figures XVIII

Chapter (1): Background of the Palestinian construction sector

1.1 Palestinian workforce in construction sector 1

1.2 Construction industry in Palestine.... 3

1.2.1 Employment of construction analysis 4

1.2.2 Contribution of construction industry to the Palestinian economy GDP

5

1.2.3 Percentage contribution to GDP by construction sector............ 6

1.2.4 Main economic indicators for construction activity.. 7

1.2.5 Contraction companies in Palestine 8

1.2.6 Palestinian contraction union (PCU).. 9

1.2.7 Classification of Contractors 9

1.3 Problem statement .. 11

1.4 Objectives 13

Chapter (2): Human resources issues in construction industry 14

2.1 Introduction.. 14

2.2 Concept of human resource management HRM.. 15

2.3 Human recourses management and success factor of constructability 16

2.4 External issues affecting human resources management in construction........ 18

2.4.1 Workforce demography.. 18

2.4.2 Technological changes 20

VIII

2.5 Labor recruitment in construction 20

2.5.1 Factors in labor recruitment 21

2.5.2 Informality in recruitment... 21

2.5.3 Selection process 23

2.6 Labor demand 23

2.7 Construction Labor Demand by Skills. 23

2.7.1 Technological alternatives.. 23

2.7.2 Relationships between forecasted supply and demand... 25

2.7.3 Historical relationship of expenditure to labor demand. 25

2.7.4 Decide on desired construction technology 25

2.7.5 Seasonality parameters.. 25

2.8 Forecasting construction labor supply.. 26

2.8.1 Population data for a region 27

2.8.2 Participation rate and required data 27

2.8.3 Estimate size of the labor force.. 27

2.8.4 Estimated enrolment in training programs. 27

2.8.5 Estimating number of persons possessing a specific set of skills... 27

2.8.6 Seasonality parameters.. 28

2.9 Human resources information system. 28

2.10 Assignment and allocation of multiskilling workforce 29

2.10.1 Multiskilled workforce... 29

2.10.2 Multiskilling in construction.. 30

2.11 Alternative multiskilling strategies.. 30

2.11.1 Dualskill labor strategies...... 31

2.11.2 Four skills labor strategy .. 31

2.11.3 Four skills-helpers labor strategy 31

2.11.4 Theoretical maximum labor strategy.. 31

2.12 Factors behind low-productivity in construction sites.. 32

2.12.1 De-motivation of workers . 32

2.12.2 Workers short employment duration 32

2.13 Manpower development and planning.. 33

IX

2.13.1 Assessment of existing manpower (Stage 1).. 34

2.13.2 Assessment of external factors (Stage 2) 34

2.13.3 Establishment of training and staff development policy (Stage 3) .......

34

2.13.4 Forecasting labor demand and (Stage 4)............. 34

2.13.5 Forecasting labor supply (Stage 5) ............. 35

2.14 Human resources training and education... 35

2.14.1 Education and training................. 35

2.14.2 The five steps training and development process............... 38

Chapter (3): Research methodology 41

3.1 Research strategy 41

3.2 Research Design 41

3.3 Research variable 45

3.3.1 Construction workers. 45

3.3.2 Construction organization mangers, projects mangers, and site engineers 45

3.4 Research population 47

3.5 Sample size.. 48

3.6 Sample method. 49

3.7 Data collection.. 50

3.7.1 Questionnaire design.. 50

3.7.2 Site visits 53

3.8 Pilot study 54

3.8.1 Questionnaire validity 55

3.8.1.1 Validity of the questionnaire by arbitrators.. 55

3.8.1.2 Validity of the questionnaire by statistical method.. 55

3.9 Reliability of the questionnaire ... 61

3.9.1 Split-Half Coefficient method 62

3.9.2 Cronbach's Alpha... 63

3.10 Statistical manipulations.. 63

3.11 Statistical methods... 64

X

Chapter (4): Results 65

4.1 Assessment of existing construction workers (Population characteristics) 65

4.1.1 Marital status. 65

4.1.2 Occupational structure 66

4.1.3 Ages of construction workers in years 67

4.1.4 Experience of construction workers... 67

4.1.5 Educational level 68

4.1.6 Employment mode.. 69

4.1.7 Length of service with present employer 69

4.1.8 Attitude of construction workers toward their employer 70

4.1.9 Methods used by skilled workers in acquiring construction skills. 71

4.1.10 Employer nature of workers in last five years 71

4.1.11 Nature of the construction projects 72

4.2 Causes of construction workers dissatisfaction.. 73

4.2.1 Lack of possibilities for better future in the construction sector 75

4.2.2 Lack future skills improvement and training from the employer... 76

4.2.3 Lack of job security and feeling of being fired... 77

4.2.4 Lack of necessary incentives 77

4.2.5 Working hours per day exceeding 8 hour.. 78

4.2.6 Delay in payment salaries 78

4.2.7 Higher load of work which exceeds capacity. 79

4.2.8 Lack of construction material available at site... 79

4.2.9 Discontinuity of work in the construction site ... 80

4.2.10 Low payment from the employer .. 80

4.2.11 Lack of safety condition at the construction site 81

4.2.12 Lack of work facilities available 81

4.2.13 Weather condition in the construction site. 82

4.2.14 Lack of appropriate insurance .. 82

4.2.15 One-Sample Kolmogorov-Smirnov Test. .. 82

XI

4.2.16 The relationship between population characteristics and causes of construction workers dissatisfaction.. 83

4.3 Personal information 87

4.3.1 Job description 87

4.3.2 Years of experience . 87

4.3.3 Total value in dollars of projects implement . 88

4.3.4 Organization type 89

4.3.5 Types of the implemented projects. 89

4.3.6 The average annual value for projects implemented by the construction organization ... 90

4.3.7 Organization experience in construction works. 91

4.4 Human resources development and planning factors... 92

4.4.1 Means of the groups.. 92

4.4.2 External factors group (Group 1) ... 93

4.4.2.1 Mean and ranking of physical factors (sub-group1) 93

4.4.2.2 Mean and ranking of technology factors (sub-group2) 95

4.4.2.3 Mean and ranking of financial, social and political factors (sub-group 3) .. 97

4.4.2.4 Over-all ranks of external factors group (Group 1).. 102

4.4.3 Training and staff development (Group 2) 104

4.4.3.1 Training and staff development policy factors (sub-group1) .. 104

4.4.3.2 Specific training needs (sub-group2) ...... 110

4.4.4 Labor demand and supply forecast (Group 3) ...... 113

4.4.4.1 Labor supply factors (sub-group 1) ....... 114

4.4.4.2 Labor demand forecast (sub-group 2) .... 116

4.4.4.3 Over-all ranks of labor supply and demand forecast factors (Group 3) .......... 118

4.4.5 Mean and ranking of all factors of human resources development in construction industry.................. 119

4.4.6 One-Sample Kolmogorov-Smirnov Test................ 123

4.4.7 The relationship between population characteristics and main human resource development factors groups ........ 123

XII

4.4.7.1 The relationship between occupation and main human resource development factors groups ..... 123

4.4.7.2 The relationship between experience and main human resource development factors groups ..... 125

4.4.7.3 The relationship between projects implemented value and main human resource development factors groups... 127

4.4.7.4 The relationship between organization average annual value of projects and main human resource development factors groups. 130

4.4.7.5 The relationship between organization experience and main human resource development factors groups.. 132

4.4.8 Partial correlation coefficient......... 134

Chapter (5) Conclusion and recommendation 137

5.1 Conclusion............................... 137

5.2 Construction workers dissatisfaction causes 138

5.3 External factors... 139

5.4 Training and staff development policy. 140

5.4.1 Training needs 142

5.5 Labor supply and demand forecast.. 142

5.6 Recommendations 144

5.6.1 Responsible authority on construction works. 144

5.6.3 Contractors 145

5.7` Model development.. 146

5.7.1 Existing workforce evaluation (phase 1) ... 149

5.7.2 Identification of construction workforce dissatisfaction causes (phase2) . 149

5.7.3 Identification of external factors (phase 3). 150

5.7.4 5.7.4 Training and development (phase 4). 150

5.7.5 Future trends in construction sector (phase 5) 151

5.8 Proposed further research studies............... 152

References...................................... 153

List of annexes................ 156

Annex 1................................ 157

XIII

Annex 2................................ 163

Annex 3................................ 169

Annex4................................ 174

XIV

List of Abbreviations

PLO Palestinian Liberation Organization

PA Palestinian Authority

UN United Nation

UNSCO The Office of the United Nations Special coordinator

WBGS West bank and Gaza Strip

GDP Gross Domestic Product

PCBS Palestinian Central Bureau of Statistics

MPWH Ministry of Public Works and Housing

PCU Palestinian Contractors Union

HRM Human Resources Management

HRDF Human Resource Development Factors

CV Curriculum Vitae

HRIS Human Resources Information System

HR Human Resources

IT Information Technology

SPSS Statistical Package for Social Science

XV

List of Tables

Chapter (1)

Table 1.1 The employment distribution by sector.. 5

Table 1.2 GDP by economic activity in the Palestinian territory at constant prices 6

Table 1.3 The percentage contribution to GDP by economic activity in Palestinian territory at constant prices 7

Table 1.4 The main economic indicator for construction contractors activity- formal sector, 1999-2003. 8

Table 1.5 Condition and requirements of contractors' classification. 10

Chapter (2)

Table 2.1 General description of constructibility success factor issues. 17

Table 2.2 General description of constructibility implementation barriers issues. 17

Table 2.3 Depicts the major functions available in modern HRIS. 28

Table 2.4 Five steps for training and development Process... 38

Table 2.5 Performance improvement targets and implications for changes in skills and training. 39

Chapter (3)

Table 3.1 Characteristics of the research sample... 48

Table 3.2 The sample size taken for this research.. 49

Table 3.3 Pearson Correlation coefficients between causes of construction workers dissatisfaction and their total average mean .............................................................................. 56

Table 3.4 Pearson Correlation coefficients between items of external factor group and their related average mean .. 58

Table 3.5 Pearson Correlation coefficients between items of the training group and their total average mean ................... 59

Table 3.6 Pearson Correlation coefficients between items of labor supply and their total average mean....................................... 61

Table 3.7 Split-Half Coefficient method 62

Table 3.8 Cronbach's Alpha For Reliability... 63

XVI

Chapter (4)

Table 4.1 Marital status 66

Table 4.2 The occupational structure... 66

Table 4.3 Age distribution in years.. 67

Table 4.4 Experience in construction works 68

Table 4.5 Educational level of construction workers........................... 68

Table 4.6 Employment modes of construction workers....................... 69

Table 4.7 Length of service with present employer. 70

Table 4.8 Attitude of construction workers toward their current employer... 70

Table 4.9 Methods used by skilled workers in acquiring construction skills................................................................................. 71

Table 4.10 Employer nature of workers in last three years 72

Table 4.11 Nature of the construction projects in the last three years... 72

Table 4.12 Table 4.12 Mean and ranking of the causes of construction workers dissatisfaction. 74

Table 4.13 One-Sample Kolmogorov-Smirnov test for causes of construction workers dissatisfaction in construction sector. 83

Table 4.14 One-Way ANOVA for respondent characteristics (marital state, age, experience, and length of service) and dissatisfaction cusses of construction workers 84

Table 4.15 Job title........................................... 87

Table 4.16 Experience years of the respondents 88

Table 4.17 Total value in dollars of projects implemented 88

Table 4.18 Organization description of the employer 89

Table 4.19 Types of implemented projects by the organization in the last five years.. 90

Table 4.20 Average annual value of projects implemented years 91

Table 4.21 Organization experience in construction works.. 91

Table 4.22 Mean and ranking of main groups 92

Table 4.23 Mean and ranking of physical factors (sub-group1) 93

Table 4.24 Mean and ranking of technology factors (sub-group2) 96

Table 4.25 Mean and ranking of financial, social and political factors (sub-group 3). . 98

XVII

Table 4.26 Mean and ranking of external factors (Group 1).. 103

Table 4.27 Mean and ranking of training and staff development policy Factors (sub-group 1) . 105

Table 4.28 Mean and ranking of specific training needs factors (sub-group 2) .. 110

Table 4.29 Mean and ranking of labor supply factors (sub-group 1). 114

Table 4.30 Mean and ranking of labor demand forecast factors (sub-group 2) . 117

Table 4.31 Over-all ranks of labor supply and demand forecast factors (Group3) . 119

Table 4.32 Mean and ranking of all factors of human resources development in construction industry.. 120

Table 4.33 One-Sample Kolmogorov-Smirnov Test. 123

Table 4.34 One-way ANOVA (Occupation and main human resources development groups) .. 124

Table 4.35 One-way ANOVA (Experience and main human resources development groups) .. 126

Table 4.36 One-way ANOVA (Project implemented value and main human resources development groups) 128

Table 4.37 One-way ANOVA (Organization average annual value of Project implemented and main human resources development groups) ... 130

Table 4.38 One-way ANOVA (Organization working experience and main human resources development groups)... 132

Table 4.39 Pearson correlation.. 134

Chapter (5)

Table 5.1 The most important ten dissatisfaction causes. 139

Table 5.2 The most important ten external factors.. 140

Table 5.3 The most important five training and staff development factors. 141

Table 5.4 The most important five training needs 142

Table 5.5 The most important five labor supply and demand factors.. 143

XVIII

List of Figures

Figure 2.1 A framework for forecasting construction labor demand, in construction industry..................................... 24

Figure 2.2 A conceptual framework for forecasting construction labor supply..... 26

Figure 3.1 Steps involved in the conducting of an investigation. 43

Figure 3.2 Summary of the flow chart of the methodology 44

Figure 3.3 Diagram showing four independent variables and one dependent variable. 46

Figure 5.1 Model for the development of the human resources in construction industry.. 147

Chapter 1

Background of the Palestinian construction sector

This chapter contains information on the construction industry in Gaza Strip

West Bank, but with focus on Gaza Strip in addition to data on the

construction sector, and workforce, related to the subject of the thesis. Also, it

contains the importance of this research, problem statement, and the

objectives.

1.1 Palestinian workforce in construction sector:

The Palestinian economy unlike other economies lacks national strategic

control and self monitoring system, because it has never been under full

Palestinian control. The economical growth in Palestine lies with Palestinian

private sector. Small scale, single owners and family enterprises are dominant.

Large enterprises are still very limited in number. The private sector

industrialists have been accustomed to profiting under difficult circumstances

(PIEFZA, 2004). The construction industry is vital for the Palestinian

economy and necessary infrastructure development. Construction sector relies

on imports of raw materials. But due to closure, such materials could not be

imported, causing delays in construction projects, jobless and high daily

sectorial losses (PCHR, 1995).

The construction sector is one of the key economic sectors and is the main

force motivating the Palestinian national economy. Upon the establishment of

the Palestinian National Authority and the assuming of its powers over the

Palestinian territories in 1994, the construction sector has witnessed

noticeable expansionional activities. This has resulted in the recovery of the

construction contracting profession and subsidiary industries, encouraged the

investment of the Palestinian expatriates capital in the local construction

sector, and contributed to the creation of jobs for thousands of Palestinians.

Therefore, the construction sector has occupied the foremost position among

the rest of sectors, mainly in the attraction of investments and creation of new

jobs (PCU, 2006). Construction is one of the most important sectors in the

assimilation of labor force throughout Palestinian cities and towns. Prior to

the Israeli re-occupation of the Palestinian territories on September 28, 2000,

construction sector used to employ an average of 22.3% of Palestinian labor

force volume. However, the sector now employs 10.8% of the labor force

volume only, thus constituting a decrease in the labor force volume as a direct

consequence of the Israeli forces occupation (PCBS, 2005).

In 1992, the Palestinian labor force amounted to 350, 000. By 1999 it had

risen to more than 630, 000. This increase had the effect of reversing, in per

capita terms, any economic growth that took place before the present Intifada

(Winkler, 2002). By 1993, 120, 000 Palestinians were commuting to Israel for

work. Their earnings made up a major part of the income in the West Bank

and Gaza in that year, however, Israel imposed the closure, in effect firing all

of this labor force. Closure has been in effect, with varying severity, ever since

(WAC, 2004).

When first imposed in March 1993, the closure had a negative effect on Israel

which experienced a sudden shortage of labor force in construction and

agriculture. In the spirit of globalization, Israel solved the problem by

replacing the Palestinians with migrant workers, who proved to be cheaper.

This occurred within a few years. Israeli contractors gained cheap labor, while

the political establishment continued its policy of containing the Palestinians

within cantons. These measures have been part of the ongoing attempt to

suppress the Palestinian peoples desire for self-determination (WAC, 2004).

In September 1993 the first of the Oslo Accords was signed. They proved to

be unbalanced. While Israel enjoyed years of strong economic growth (1993-

2000), the Territories grew only in poverty. The Paris Protocol, signed by

Israel and the PLO on April 29, 1994, did not allow an independent economic

entity (PER, 1994).

The Oslo Accords created the Palestinian Authority (PA). During its existence

(effectively ended by Israel in May 2002), the Palestinian economy remained

dependent on Israel. As long as Palestine is not free to establish economic

relations, trading independently of Israel, the obligations of Israel as the

occupying power will remain (WAC, 2004). During the Oslo years, in the

areas under the control of the PA, there was a considerable expansion of the

public sector. This did not, however, create an independent basis for industry,

such as could supply work for the increasing number of job seekers. The

dependence on Israel continued (WAC, 2004)

The Palestinian business sector likewise continued to depend on Israel for

energy, communications, raw materials, and its ability to export. This reality

has not changed in the last three and a half years of Intifada. The outbreak of

the second Intifada led to a further deterioration in the territories. Israel used

harsher means of economic oppression in its attempt to break the spirit of the

people. A report by the UN Special Commission for Palestine (UNSCO)

pointed out the dangers: The Palestinian economy is mired in a deep crisis,

with unemployment levels rising significantly over the first half of 2002.

Particularly hard hit are the West Bank cities and towns, which the Israeli

military has placed under lengthy curfews. On days with curfew, the estimated

unemployment rate reached 63. 3 %. Income losses now total US$ 3.3 billion

since October 2000. Poverty levels continue to increase at alarming rates,

reaching 70 % in the Gaza Strip (UN, 2002)

1.2 Construction industry in Palestine:

The construction industry in Gaza Strip has played a key role in the countrys

socio-economic development, creating the physical facilities and infrastructure

which have made possible the nations remarkable progress. Following effort

to improve upon it, the industry is relatively advanced. However, it continues

to use labor-intensive techniques (MAS, 2002).

The construction sector is considered one of the important sectors of industries

for the economy of Gaza Strip and plays a major role in the infrastructure

facilities development. It mainly relies on the local workforce and the raw

materials which imported from outside the country through Israel exit points.

This caused a severe shortage of raw materials and increase in the cost of these

materials for users. The construction industry suffered great losses in term of

quality, cost, and delay in handling projects due the policy of Israeli closure of

the exit points (PCHR, 1995).

1.2.1 Employment of construction analysis: The construction and housing is a driving force in the Palestinian economy.

The value of its contribution rose from $410 million in 1994 to $483 million in

1999 in the WBGS. Between 1994-1999, $6000 millions were invested in the

construction industry, comprising housing units, public and commercial

buildings, and infrastructure facilities. Investment in buildings rose from $906

millions in 1994 to $1018 millions in 1999 in the WBGS. The employment in

the construction sector dropped from 47,400 workers in the third quarter of

2000 to 25,120 in the second quarter of 2002 in the West Bank. And in Gaza

Strip the number of workers was down from 15,700 to 4000 during the same

period. In term of percentage there was a 47% drop in the West Bank

construction employment and a 75% drop in the Gaza Strip (MAS, 2002).

Table 1.1 shows the employment distribution by sector. This Table illustrates

that in 1999 there was 22.1 % of work force in Gaza Strip and West Bank

were working in the construction industry, which represent the highest

percentage in the period between 1995 to 2006. In that year (1999) there was

stability in the political situation and higher investment in the construction

industry. After Israeli measures against the Palestinians people which took

place in the year 2000, the percentage of construction employment declined to

13.1 % in 2003 (PCBS, 2004)

Table 1.1 The employment distribution by sector (PCBS, 2004) Employment by sector (%)

Year Agriculture Construction Manufacturing Services Others*

1995 12.7 19.2 18.0 25.6 24.5 1996 14.2 16.8 16.8 29.2 23.0 1997 13.1 18.4 16.4 28.2 23.9 1998 12.1 22.0 15.9 27.1 22.9 1999 12.6 22.1 15.5 28.1 21.7 2000 13.7 19.7 14.3 29.9 22.4 2001 12.0 14.6 14.0 34.5 24.9 2002 14.8 10.9 12.9 36.9 24.5 2003 15.7 13.1 12.5 32.9 25.8 Q1** 14.7 11.6 12.8 34.9 26.0

Q2 17.7 12.1 12.1 32.6 25.5 Q3 14.8 14.4 12.6 32.3 25.9 Q4 15.4 14.1 12.6 32.0 25.9

* Include: Commerce, restaurant and hotels, transportation, storage and communication

sectors

** Quarter of the year

1.2.2 Contribution of construction industry to the Palestinian economy

GDP:

It's estimated in the year 2000 the construction industry contributed around

300.3 million dollars of total GDP of the Palestinian economy. And this figure

started to decline to reach 188.8 million dollars in the year 2004. This

occurred due to the political unrest in the region and the harsh Israeli measures

against the Palestinian territories which started on October, 2000. Table1.2

presents the GDP by economic activity in the Palestinian territory at constant

prices for the year 2000 to 2004 (PCBS, 2005).

Table 1.2 GDP by economic activity in the Palestinian territory at constant prices (PCBS, 2005).Value in Million US $

Year

Economic Activity

2000 2001 2002 2003 2004

Agriculture and fishing 394.4 352.2 387.1 422.1 403

Mining, Manufacturing, electricity and water

723.9 645.6 636.1 489.7 586

Construction 300.3 222.1 111.7 145.2 188.8 Wholesale and retail trade

512.8 409.2 460.6 378.6 401.1

Transportation 375.7 387.8 454.7 378.5 315.9 Financial intermediation 191.3 143.1 146.5 139.6 139.5 Services 1078.2 1019 1005.3 975.5 1071.5 Public administration and defense

557.7 594.6 523.9 647.6 653.9

Public owned enterprises

168 175 142.9 83.7 **

Households with employed persons

9.3 8 8.6 8.7 7.6

* Base year 1997

** The value added of Public Owned Enterprises 2004 was distributed on the different

economic activities by activity contribution.

1.2.3 Percentage contribution to GDP by construction sector

It's estimated that the construction industry, contributes around 10 % to 12%

of total GDP of the Palestinian economy for the period between 1995 to 1999.

But for the last four years the construction contribution to the Palestinian

economy is declined to reached around (5 % to 7 %) of total GDP of the

Palestinian economy. This occurred due to the political instability and Israeli

measures taken against the Palestinians. Table1.3 presents the GDP by

economic activity in the Palestinian territory at constant prices for the year

2000 to 2004 (PCBS, 2005).

Table 1.3 The percentage contribution to GDP by economic activity in Palestinian territory at constant prices (PCBS, 2005).

Year

Economic Activity

2000 2001 2002 2003 2004

Agriculture and fishing 8.5 8.1 9.3 10.1 9.8 Mining, Manufacturing, electricity and water

15.7 14.9 15.3 11.8 14.2

Construction 6.5 5.1 2.7 3.5 4.6 Wholesale and retail trade

11.1 9.5 11 9.1 9.7

Transportation 8.1 9 10.9 9.1 7.6 Financial intermediation 4.1 3.3 3.5 3.4 3.4 Services 23.4 23.6 24.1 23.4 25.9 Public administration and defense

12.1 13.7 12.6 15.5 15.8

Public owned enterprises

3.7 4 3.4 2 **

Households with employed persons

0.2 0.2 0.2 0.2 0.2

Adjustment Terms *** 6.6 8.6 7 11.9 8.8 Total 100 100 100 100 100

* Base year 1997

** The value added of Public Owned Enterprises 2004 was distributed on the different

economic activities by activity contribution.

*** Adjustment items include financial intermediation services indirectly measured (as a

negative value) plus custom duties plus VAT on imports net.

1.2.4 Main economic indicators for construction activity

Table 1.4 illustrates the main economic indicators for the construction

contractor's activities (formal sector, 1999-2003). The Table shows the

number of construction contractors for years 2000 were 430 registered active

construction contractors and the number started to decline to reach 348 in

2003 which means that around 20% of construction contractors were off work.

The number of persons engaged with these construction contractors was 5,864

for 2000 and this figure declined in 2003 to reach 3693 persons which means

about 37% of construction workers lost their jobs in 2003. The compensation

of the employees working with construction contractors were 32.2 million

dollars in 2000 and the figure declined to 14.7 millions in 2003 by other word

there was 54.3 % loss of income for construction employees who work for the

construction contractors. The main reason behind this deterioration in the

construction sector is the political disturbance and the closures of the

Palestinian territories by Israel (PCBS, 2005).

Table 1.4 The main economic indicator for construction contractors activity- formal sector, 1999-2003 (PCBS, 2005). Value in 1000 US$

Year

Indicator

2003 2002 2001 2000 1999

No. of enterprises 348 348 356 430 337

No. of person engaged 3,693 3,505 3,362 5,864 4,153

Compensation of employees

14,694.6 11,780 13857.7 32,230 27,005

Output 159,462 95,931.1 83,515.9 178,834.9 199,326.5

Intermediate consumption

104,169 63,678.2 43,549.4 110,314.6 99,540.5

Value added 55,293.8 32,252.8 39,966.7 68,520.3 99,786.8

G.F.C.F 1,313.2 429.6 509.3 1,324.7 9,736.8

1.2.5 Contracting companies in Palestine:

There are 587 contracting companies in Palestine according to the Ministry of

Public works and Housing (MPWH) , where 64% (374) contraction companies

in West bank, and 36 % (213) in Gaza Strip (Alquds, 2005). The Palestinian

contraction Union classified members by skill, competency and administrative

and financial proficiency. The classification of the contraction companies is

performed by the MPWH. Qualification is monitored on continuous basis and

requires a complete updates of construction company capital, equipment

values, maximum value of projects, minimum value of projects, experience

value of executed projects, and office. The considered update duration is two

years. And companies must submit vigorous prequalification process (PCU,

2006).

1.2.6 Palestinian contraction union (PCU)

The Palestinian Contractors Union, a registry industry association established

in 1994, is an economic, social and professional association which enjoys

independent legal, financial and administrative status. PCU advocates and

defends the highest standards of professionalism for construction industry. In

meeting the needs for construction value and integrity, the PCU performs a

number of valuable services for its members such as classification, training

program, firm's level assistance, information services, dispute resolution, and

public program (PCU, 2006).

1.2.7 Classification of Contractors

Classification of contractors is the most significant of the services provided by

the PCU. Such process shall protect the contractors against illegitimate

competition and maintain their rights. In addition, classification of contractors

shall organize the construction contracting profession and set right the

selection of contractors with the qualifications required for construction

projects (PCU, 2006).

1.2.8 Classification Categories

According to Ministry of Public Works and Housing there are over 587

contracting companies in Palestine, 374 contracting companies in West bank

and 213 in Gaza Strip .The total number of first, second and third contractor

categories is 135 contracting companies, 27 companies of first class (A) , 42

companies of first class (B), 36 of second class and 30 of third class (Alquds,

2005). Table 1.5 illustrates the condition and requirements of contractors'

classification (PCU, 1994).

Table 1.5 Condition and requirements of contractors' classification (PCU, 1994). Requirement and conditions of contractors classifications

Fie

ld o

f w

ork

clas

sifi

cati

ons

Cap

ital

of

com

pany

($

) E

quip

men

t va

lue

($)

Max

. val

ue o

f pr

ojec

ts (

$)

Min

. val

ue o

f pr

ojec

ts (

$)

Exp

erie

nce

valu

e of

ex

ecut

ed p

roje

cts

($)

Are

a of

off

ice

(m2)

First class (A)

650,000 650,000 8 million 25 million 8 million 175

First class (B)

400,000 400,000 4 million 8 million 3 140

Second 250,000 250,000 2 million 4 million 1 120

Third 100,000 100,000 500,000 1 million 300,000 75

Fourth 50,000 50,000 200,000 500,000 100,000 50

Infr

astr

uctu

re

Fifth 25,000 25,000 100,000 200,000 0 30

First class (A)

400,000 400,000 6 million 15 million 6 150

First class (B)

250,000 250,000 3 million 6 million 3 125

Second 100,000 100,000 1 million 2 million 1 100

Third 75,000 75,000 500,000 1 million 500,000 75

Fourth 30,000 30,000 250,000 500,000 150,000 50

Bui

ldin

g

Fifth 10,000 10,000 100,000 200,000 0 0

First 250,000 250,000 4 million 8 million 2 140

Second 150,000 150,000 2 million 4 million 1 120

Third 75,000 75,000 1 million 2 million 500,000 75

Fourth 50,000 50,000 500,000 1 million 150,000 50

Wat

er/ S

ewag

e

Fifth 15,000 15,000 100,000 200,000 50,000 30

1.3 Problem statement:

In recent years, considerable attention has been directed towards issues

connected with the recruitment and employment of labor within construction

industry. Concern has been directed variously towards both the structure of

employment that characterized the industry, and the implications of

employment patterns for the performance of industry. The human resources

factor involved in the construction industry is significant and of high

importance as it plays a major rule in the success or failure of the construction

projects and it affects the three implementation phases factor (Time, quality,

cost).

The manpower in the construction industry in Palestine is not given attention

neither from the construction companies nor from the concerned governmental

authorities. Studying the availability of skilled workers, training, quality,

mode of payment and future strategies to develop the construction workforce

is essential and justified for success of the projects. The number of workers

taking career in the construction industry is on the rise and this industry

involves around 16 % of total work force in different Palestinian industrial

sectors (PCBS, 2004).

Human resources development in construction which is investigated in this

research focuses on the development of the human factor which involves in

the construction, this involves assessing and improving individual

performance, managing career, and providing organization management

development.

Given the stated concern with manpower issues in construction, it is perhaps

surprising to find that little systematic attention has been directed towards

identifying and documenting the range of recruitment and selecting strategies

that are adopted within the industry. Such focus as there is tends to be upon

the structure of employment within the industry as a whole, with less

consideration directed towards the mechanism of selection the recruitment at

site level. In other words, relatively little is known about how individual

contractors formulate their demands for labor, and how this is then put into

effect in terms of the procedures adopted for recruitment. Moreover, with a

limited number of exceptions, the focus of investigation has tended to be more

aggregate (firm/ industry) level analysis. It would therefore seem likely that a

fuller understanding of the labor process in construction may be gleaned from

a more detailed investigation of the patterns of selection and recruitment

adopted at an operational level.

This study is an attempt to study the current situation of human resource in

construction industry in Gaza Strip. The workforce in construction industry is

the vital part in the construction sector and it costs nearly 30% to 50% of total

cost of the construction projects. There is less awareness among the

construction organizations and construction engineers about the role of the

workforce in construction industry. In this research, an attempt is carried out

to put bases for the development of the human resources in construction

sector.

The hypotheses considered in this research are to find out the relationship

between the characteristics of the research sample and the factors that affect

the human resources in construction industry and to see the relationship

among the groups of human resources development factors.

1.4 Objectives:

The main objectives of the study are the following:

1. Assessment of the existing manpower with regards to:

Identification of age distribution, job experience, salaries,

performance, education level, and determining the

dissatisfaction factors for construction workers.

2. Assessment of external factors which affect the construction

workers.

3. Establishment of training and stuff development policy for

construction employees.

4. Forecasting the future labor demand and supply policies.

5. Testing the first major null hypothesis which states that there is

no significant difference in the mean value of the causes of the

construction workers dissatisfaction due to marital state, age,

experience, and length of service at level 0.05.

6. Testing the second major null hypothesis which states that, there

is no significant difference in the mean value of the groups of the

human resources development factors in construction industry

due to the occupation, experience, projects value, organization

average annual value, organization experience.

7. Testing the third major null hypothesis which states that there is

a relationship between external factors group, training and staff

development policy group, and labor supply and demand group.

8. Develop a conceptual model for the development of the human

resources in the construction industry in Gaza Strip.

9. Providing practical suggestion and recommendations for the

development of the human resources factor in the construction

industry.

Chapter 2

Human resources issues in construction industry

This chapter deals with definitions, recruitment, skills, technology,

construction productivity, training, and manpower development of human

resources in construction industry. Also this chapter discusses deferent issues

which concern the development of human resources in construction.

2.1 Introduction

An issue of fundamental importance is that the development of human

resources became evident over the last few decades; the un-development of

human resources is a major factor inhibiting effective planning and

implementation of construction projects in developing countries. The problem

is due to the major deficiencies at the managerial level, a situation aggravated

by a dearth of managerial competence in society at large (Imbert 1990). The

employment of craftsmen in construction is characterized by unsuitability; the

construction worker is hired on a project with the objectives of working him

out of job by completing the project (Uwakweh, et al.1991).

The construction industry faces many challenges. Many of these challenges

arise from the need to keep a skilled and competitive craft workforce,

challenges such as changing demographic characteristics, changes in the

economics and technology, difficulties in maintaining a skilled work force,

rapid changes in the economy, social changes and organization technological

environment changes (Jayawarane and Gunawardena, 1998).

The reasons for the under development of human resources in developing

countries are many and various, some are historical, or geographical. But what

appears important reason however is the lack of perception on the part of

planners and an executor of economics polices, they seldom recognize the role

of skilled technical manpower in development (Imbert 1990).

The construction industry in most countries is characterized by an area of

labor pools, this allows for movement of workers among contractors and

between the different construction branches. Contractors are in need for

workers to hire from the area of labor pools and return workers to the pool

when they are no longer needed (Uwakweh, et al. 1990).

The construction challenges can be addressed by a deep understanding of the

structure and characteristics of the skilled work force, the economical impact

on the construction industry, understanding the social and the surrounding

environment of the construction industry, and the strategies used for

construction organizations and human resources (Jayawarane and

Gunawardena, 1998).

2.2 Concept of human resource management HRM

Over the last three decades, there has been widespread discussion about the

concept of human resource management. The term, in everyday use, has been

a replacement for personal management, but its meaning and significance has

been the subject of wider academic debate. The distinctive features of HRM

have been identified as its holistic approach to personal policies and its

integrative, strategic approach to personal issues within the context of business

planning and development (Druker et al. 1995)

Human resources management can be defined as" the practices and polices

you need to carry out the people or personal aspects of your management job.

This includes recruiting, screening, training, rewarding and appraising, these

concepts are too important for managers, the following are some mistakes that

take place in a company or organization that may not use the human resources

management tools (Dessler, 2000).

a. Hiring the wrong person.

b. High turnover.

c. Workers not performing what expected from them.

d. Higher idle time.

e. Unfair payment.

f. Training requirement.

2.3 Human recourses management and success factor of constructibility

The availability of labor is a major consideration in investment decision

(Agapiou et al. 1995 a), the data available on the subject of labor force is great

but many of these data are incomprehensible to companies and large projects

are located in areas where insufficient labor to satisfy the demands generated.

(Agapiou et al 1995 b). Construction industry around the world is

characterized by unstable level of activities and fragmented nature of

operation and susceptibility to economic nature (Thomas et al. 2001). Many

construction workers are hired on project bases and made redundant on project

completion (Jayawarane and Gunawardena, 1998).

The availability of skilled labor is a major consideration in investment

decision, and the level of the demand for the skilled workers is affected by the

cyclical nature of the construction work load (Agapiou et al. 1995 a).

Construction is in a period of rapid cultural change accompanied by the

introduction of new technologies and new ways of organizing construction

activities. The construction industry will continue to face increased

competition in search for eligible recruits to train accordingly. (Agapiou et al

1995 b). Therefore reliable labor force data and proper investment plans are

pre-requisites to such accurate labor models (Jayawarane and Gunawardena,

1998).

The engineering-construction is a service industry. People are keys to its

success; selection of the appropriate team is a critical management task. Once

a team is selected, the most effective role of management is to nature the

growth of the team by showing visible support to the achievers. One form of

support that appeared important is the management willingness to accept the

risk taken by project team. The teams technical capabilities, compatibility of

individuals, sense of ownership of the constructibility are factors of success of

project. The following Tables 2.1 and 2.2 show the description of

constructibility factors (Eldin, 1998).

Table 2.1 General description of constructibility success factor issues (Eldin, 1998). No. Employee related

issues Management related

issues Process related issues

1. Compatibility of team members.

Fostering ownership sense.

Establishing of strong communication routines

2. Technical skills of individuals.

Visible support to achievers.

Use of latest technology

3. Interpersonal skills of individuals.

Willingness to accept results of taking risk

Evolvement of end users

4. High personal commitment to success.

Interest in long term relationships.

Process continuity.

5. High trust between all parties staff.

Develop high trusting environment.

Operations safety.

6. Visible/direct support to top management.

7. Direct involvement of top management.

Table 2.2 General description of constructibility implementation barriers issues (Eldin, 1998). No. Employee related

issues Management related

issues Process related issues

1. Lack of skilled employee

Lack of top management support.

Lack of continuity ( interruption)

2. Lack of implementation and training budget

Lack of training

3. Lack of willingness to accept risk of empowering employee

Lack of process understanding

4. Regulatory requirements

2.4 External issues affecting human resources management in

construction

The construction industry exists in a turbulent and complex environment

which makes planning for future extremely difficult. Nevertheless, it is

precisely such future planning upon which the effective management of

human resources depends. Demographic, technological and social values

changes have important effects on HRM and each of these constitutes a part of

the organization's external environment (economic, political and technological

environment influences (Langford et al. 1994).

2.4.1 Workforce demography

A) Demographics include the age profile of construction workers, education,

training, remuneration, gender and migratory work pattern (Jayawarane and

Gunawardena, 1998). Strategic managers in business and industrial

communities have begun, in the last 15 years, to become more aware of the

need to appreciate the influence of demographic changes on their activities

(Langford et al. 1994).

The causes of the skills shortage in the construction industry are

attributed to number of factors

1. The demographic decline in the young people available to enter the labor

market, which has increased competition for few entrants to labor pool,

(Drucker et al. 1996).

2. The changing nature of construction markets and the demand for skills,

which has attributed to a reduction in construction operatives with many

traditional skills (Drucker et al. 1996).

3. The introduction of new technologies, requiring new skills, and in some

instance a higher level of new entrant training and continual

development of existing labor pool (Agapiou, 1995 a and CITB, 1991).

4. The cyclical nature of construction market, which historically has

resulted in extreme fluctuation in construction output, employment and

training levels (Drucker et al. 1996).

5. The growth of self-employment, the use of specialist labor, and the

decline in construction training and training resources (Agapiou, 1995 b).

The traditional response to shortage of any type of skilled labor is to increase

remuneration. However and up-turn in demand will not be satisfied only by

this strategy, this because labor losses are contributed by retirement,

movement to other industries, reduction in new entrant intake level, and the

fact that many operatives drawn from the ranks of unemployment may not

possess the necessary skills (Mackenzie, et al. 2000). The primary effects of

these factors is that the construction employers poach labor from each other,

leading to inflation rises in the cost of construction, this in turn reduces

demand, which temporarily contributes to reducing the labor shortage

(Agapiou, 1995).

B) Young people in construction

The future and current supply of construction skilled labor mainly depends on

the recruitment of young people, and some upgrading of semi-skilled

operatives to skilled jobs. The increasing number of young people available to

enter employment has for the construction industry, particularly in the

searching for eligible recruits to train for future skills required. As a result of

the increased number of young people staying off at school, construction

employers are finding no difficulties to recruit apprentices. (Agapiou, 1995 a).

C) Adult workers

Alternatives to young recruits are adult recruits; they are more enthusiastic to

work than young workers, especially when they are fully trained (Dessler,

2000).

Agaipou, (1995) Stated that the craft workers who moved out of construction

industry to take more stable and good payment and better job condition

represent a potential pool of labor.

2.4.2 Technological changes

Technology is the key to element in the construction industry, to a certain

extent the level and sophistication of the technology employed by an

organization will depend upon two factors that have to be successful; these

factors are managerial philosophy and employee expectations and needs

(Langford, 1994). Increasing technological sophistication of both construction

products and processes mean that the need for technical, knowledge-based

skills is growing, introducing new technologies create problems at interfaces

between new and existing systems. This occurs when people lack the skills to

work alongside those using technologies (Gann, 1998).

The technological change in the construction, industry is restricted to changes

or improvement in material specifications, and product ranges. Agaipou,

(1995) Stressed on that, new technology that appears gives arise to the need

for a combination of skills from traditional separate construction trades, this

includes the development of a prefabricated system.

2.5 Labor recruitment in construction

In recent years, considerable attention has been directed towards issues

connected to the recruitment and employment of labor within the construction

industry. Concern has been directed variously toward both the structure of

employment that characterized the industry, and the implications of

employment patterns for performance of the industry. To a large extent the

identification of the selection and recruitment of site labor as an issue

warranting more detailed attention, has derived from concern about the

implications of both the excessive casual nature of employment in

construction, and the maintenance of apparently less formalize process of

labor recruitment than encountered in other industries (Ford et al. 1983).

2.5.1 Factors in labor recruitment

The following factors are taken as bases to investigate the labor recruitment

(Bresnen, et al. 1986):

1. Site manager has a high influence over selection criteria.

2. Head office is not involved in recruitment.

3. Head office approval for recruits is required.

4. Site manager usually does not take up references.

5. Site manager is willing / able to offer higher earnings.

6. Site manager prefers to know workers.

7. Site manager prefers to recruit people that can be vouched for.

8. Site manager would not recruit unknown workers.

9. Site manager prefers experienced workers.

10. Site managers would be wary of recruiting workers without formal

qualifications.

11. Site managers have found it difficult to recruit labor.

2.5.2 Informality in recruitment

In particular, the spatial dispersion of construction sites, and the relatively

temporary and transient nature of much construction work mark out

construction as potentially quite distinct from other industries in terms of

procedures and criteria adopted for labor recruitment (Bresnen, et al. 1986). In

construction industry, the usual way of selecting staff for employment is by

interviewing them, following the submission of application form, or CV

(Langford, 1994). While the scope of recruitment undertaken by main

contractors on the sites emphasize upon less bureaucratic channels and

relatively informal processes (Bresnen, et al.1986).

The formal ways of selecting and recruiting is used in developed countries. In

construction, the most used method of employment depends on casualization,

and it is the only employment system used in the industry that being used

world wide this because most construction companies employ a core of

professional and technicians as well as tradespersons and laborers. There is

also often a core of direct employees playing a supporting role, including

administrative and clerical staff, in addition there are self employed

tradespersons and laborers and subcontracted trade-persons (Oferi and Debrah

1998).

Given the stated concern with manpower issues in construction, it is perhaps

surprising to find that little systematic attention has been directed towards

identifying and documenting the range of recruitment and selecting strategies

that are adopted within the industry. Such focus tends to be upon the structure

of employment within the industry as a whole, with less consideration directed

towards the mechanism of selection the recruitment at site level. In other

words, relatively little is known about how individual contractors formulate

their demands for labor, and how this is then put into effect in terms of the

procedures adopted for recruitment. Moreover, with a limited number of

exceptions, the focus of investigation has tended to be more aggregate (firm/

industry) level analysis. While this emphasis provides important materials for

debates up on the degree of casualism within the industry as a whole, the

question as to what firms do in respect of a particular set of requirements faced

at the operational level (site or project) remains unanswered (Bresnen, et

al.1986).

2.5.3 Selection process

The selection process itself appeared to be one over which site management

exercises a considerable influence degree of autonomy and discretion

(Dessler, 2000). Most site managers, 72% reported a high level of influence

over selection criteria. However, there did appear to be a good deal of

variation in the extent of head office involvement (Bresnen, et al. 1986).

2.6 Labor demand

Whenever you are recruiting, it is important to know what is required, formal

job description can be so vague or out of date that they are useless. It could be

beneficial both to construction organizations to generate their own by asking

present and, if possible previous job incumbents to write their own

descriptions (Langford, 1994). In understanding the process of selection and

recruitment adopted by main contractors, one must take full account of the

broad factors that inform the whole approach to recruitment. The relatively

informal procedures adopted and the high level of local site control reflects the

importance of relatively short-term operational requirements as the prime

factor in the formulation of labor demand. Furthermore, these have to be set in

context of a (pre-site) planning process which is geared to the assessment of

labor requirements primarily for tendering process (Bresnen 1986).

2.7 Construction Labor Demand by Skills

Figure 2.1 presents a framework for forecasting construction labor demand by

skills, in construction industry. The frame proposed by (Uwakweh and

Maloney, 1991) and the elements of the frame is discussed as follow:

2.7.1 Technological alternatives

Technology refers to the systematic application and utilization of either

scientific or organized knowledge to accomplish a task. Thus, technological

alternatives exist in and industry if there is more than one way to perform a

certain activity. In developing countries, technological alternatives may be

influenced by governmental regulations, for example government may require

contractors to bid for projects using labor-intensive methods even though

capital-intensive techniques may increase productivity and lower the cost

production (Uwakweh and Maloney, 1991). There is a close relationship

between availability of skilled labor and choice of technology, decision to

adopt new technologies have sometimes been made because of lack of

traditional craft skills (Gann and Senker 1998).

Figure 2.1 A framework for forecasting construction labor demand, in

construction industry. (Uwakweh and Maloney, 1991).

Regional construction

labor demand

Seasonally adjust labor demand

Seasonally adjust regional labor demand

Seasonality parameters

Relationship between forecasted supply and demand

Historical relationships of expenditures of labor demand

Decide on desired construction technology

Technical decisions

Technological alternatives

Determine regional

construction labor demand

2.7.2 Relationships between forecasted supply and demand

The relationships that exist between forecasting supply and demand for labor

will lead to varying technological decisions. For example, in surplus situation

labor-intensive techniques may be appropriate, and vice versa, data on

construction labor forecasts may be available from the Ministry of Labor or

may be obtained by a survey of major construction firms (Uwakweh and

Maloney, 1991).

2.7.3 Historical relationship of expenditure to labor demand

Construction product expenditure by labor demand may be obtained by the use

of coefficients that express the man-hour requirements by skill for any desired

standard. Determining the expenditures on construction to products and skills

required over time will provide the planners with man-hour estimate of labor

demand by skill for a certain dollar value of construction product. The data

required for estimation of expenditure to labor demand by skill may be

obtained from contractors or architects that data may obtained by analysis of

major projects (Uwakweh and Maloney, 1991).

2.7.4 Decide on desired construction technology

The decision on the desired construction technology is influenced by the

economic objectives for the planning horizon, the technology available and

relationship between forecasted supply and demand for construction labor, one

of the economic objectives of the planning horizon may be to increase labor

productivity. Because of this the contractors, may use new pieces of

equipment in their operations.

2.7.5 Seasonality parameters

The construction industry is a seasonal industry. The seasonality may be a

result of weather or patterns of contract awarded. For example, employment

activity follows changes in weather during rainy seasons; there may not be

type of highway construction where in dry season, most highway project

underway.

2.8 Forecasting construction labor supply

Figure 2.2 present framework for forecasting construction labor (Uwakweh

and Maloney, 1991).

Figure 2.2 A conceptual framework for forecasting construction labor supply (Uwakweh and Maloney, 1991).

Estimating enrolment in

training program

Training statistics

Data on participation rate

Population data of region

Estimate size of labor force

Labor force statistics

Estimate no. of persons

possessing specific skills

Seasonality parameters

Labor force skills distribution

Estimate construction labor supply

Seasonally adjust regional construction

labor supply

1

1

2.8.1 Population data for a region

Changes in the nature of a population have far-reaching effects on an

economy. A nation population influences the size of the labor supply because

future manpower is dependent on the number of persons of working age. A

study of the population is therefore a necessary starting point for forecasting

the future manpower supply. Population growth results from the infraction of

the number of births, the amount of immigration and emigration, and the

number of deaths. An analysis of these factors can generally provide a basis

for forecasting the size of future population.

2.8.2 Participation rate and required data

The participation rate is that population of the population age 18 years or more

who are active in the labor force. The participation rate in the labor force is

influenced by individual's decisions to seek work or to withdraw from the

labor force. The data required for calculating the participation rate are the

number of persons in the labor force.

2.8.3 Estimate size of the labor force

The regional labor force is defined as those persons from the region over age

of 18 years who are employed or are looking for work.

2.8.4 Estimated enrolment in training programs

A good proportion of the regional population may not possess adequate skills.

Because of this lack of skills, training programs may be necessary for the

development of an adequate regional labor force supply.

2.8.5 Estimating number of persons possessing a specific set of skills

The number of persons possessing specific skills is estimated from an analysis

of the regional labor force and training statistics. From this estimated of the

number of persons possessing special skills available during the planning

period can be determined. The estimate will reflect the diversity of skills

possessed in the regional labor force for the planning horizon.

2.8.6 Seasonality parameters

The supply of workers in the construction industry varies with the seasons.

2.9 Human resources information system

The casual nature of employment in the construction industry makes planning

human assets difficult. Human resources information systems (HRIS) offer a

means of coping with these problems through improvements to the reliability,

accuracy and accessibility of the HR information. A HRIS is a computerized

system used for acquiring, storing, manipulating, analyzing, retrieving and

distributing pertinent information regarding the human resources of the

organization (Thomas, et al 2001). An example of HRIS function module see

Table 2.3.

Table 2.3 Depiction of the major functions available in modern HRIS (Thomas, et al 2001) No. HRIS function Modules No. HRIS function Modules

1. Application tracking 12. Job description analysis

2. Basic employee information 13. Labor relations planning

3. Benefits administration 14. Pension and retirement

4. Career development planning 15. Performance management

5. Compensation planning 16. Position control

6. Employment history 17. Short and long term disability

7. Health and insurance 18. Skills inventories

8. Health and safety 19. Time and attendance

9. HR planning and forecasting 20. Training and education

10. Job evaluation 21. Turnover analysis

(performance)

11. Job posting

2.10Assignment and allocation of multiskilling workforce

2.10.1 Multiskilled workforce

Multiskilling is a work force strategy that used to reduce indirect labor costs,

improve productivity and reduce turnover. Its defined as worker who posses

a reasonable range of skills that allow them to engage in more than one work

discipline (Gomar, et al., 2002, Burleson, 1998). Because craft boundaries are

blurred using multiskilling, a multiskilling workforce can be organized in such

away, that workers are employed for longer duration at the site while the

project hiring requirement are reduced (Burleson, 1998).

The poor image of construction industry makes it difficult to attract new

workers and the lack of opportunities for training and career growth leads to

high turnover rates (BRT, 1997). This trend will not be soon changed. To be

competitive in construction industry, it is necessary to consider strategies to

balance the competitiveness in construction industry (Gomar et al. 2002).

Field studies have also indicated that multiskilling may benefit workers in

term of benefits such as longer employment duration, better qualifications

resulting in increased employment opportunities and increase job satisfaction

(Burleson, 1998). A worker may be selected to participate in any activity in

which workers may be related to different work activities, rather than being

replaced by an additional workers success of multiskilling greatly relies on the

formans ability to assign workers to appropriate tasks and compose crew

efficiency (Gomar et al. 2002).

But the strategy of multiskilling may affect the level of standards and quality

in construction work activities, we may not expect the workers to show similar

standard in different work activities and the level of performance may change,

and the quality too. Multiskilling may not be comfortable to workers, and

gives them the feeling of un-comfortability in performing the daily activities,

thats happen due to change in the daily workers assignment, higher workload,

and the workers may not possess the same standard of performance in the

different work activities ( Burleson et al. 1998). To counter such setback in

this strategy, good incentives (Direct incentives and indirect incentives) should

be offered to workers (Dessler, 2000).

2.10.2 Multiskilling in construction

Construction industry is a very labor intensive industry and the labor cost in

projects accounts for (30-50 %) of total project costs. The low productivity in

the labor performance is behind the higher cost of labors in construction

industry (Adrian, 1997). Multiskilling in construction is a labor technique that

addresses many causes of low productivity. With multiskilling in construction

workers may expect to have longer employment durations, continuity of job

assignments, and reduction of idle time. Potential product of multiskilling is

increased efficiency, increased safety, lower personal costs and lower total

labor costs (Gomar et al. 2002). Some people believe that multiskilling also

improves productivity due to benefits stated above. For example, an average

increase of 20 % due to multiskilling was estimated by six companies that

were surveyed in one study. It is reasonable to be skeptical of these estimates,

however for instance, the companies in this study have not accurately

measured increased in productivity, partly because the varied nature of each

project makes an exact value difficult to obtain. Also the shift to multiskilled

workforce strategy has not been typically a perfectly documented one

(Burleson et al. 1998).

2.11 Alternative multiskilling strategies

Four multiskilling labor strategies were defined by (Burleson et al. 1998).

These strategies were developed in cooperation with researchers and industry

patterns to reflect a spectrum of multiskilling possibilities. And they are as

follow:

2.11.1 Dualskill labor strategies

The dualskill was developed as and extension of the traditional wave theory of

project scheduling " as a schedule is developed, the goal is to get the crews to

come to the job, work continuously with maximum productivity until their

work is completed and then move on the next job". Form this description; it is

clear that current labor strategies attempt to minimize disruptions while

working within existing craft structures. The demand-driven dualskill strategy

extends the wave theory to identify craft combinations with complimentary

work loads so that workers arrive on the project remain longer by working on

multiple tasks before demobilizing (Burleson et al. 1998).

2.11.2 Four skills labor strategy

The four skills strategy states that, craft workers could be grouped into four

general craft classifications that reflect the major phases of project and

perhaps, also reflect varying skill complexity and craft similarities as well.

The four skills craft groupings include civil/structural workers, general support

workers, mechanical workers, and electrical workers. All craft workers are

assigned to one of those four grouping (Burleson et al. 1998).

2.11.3 Four skills-helpers labor strategy

The four skills-helpers is a modification to the craft classification defined in

the four labor strategy. Each original craft group was composed of workers

from three skill levels: helper, journeyman, and foreman (Burleson et al.

1998).

2.11.4 Theoretical maximum labor strategy

The final strategy in this contest is theoretical maximum labor strategy. This

strategy assumes that there is only one craft classification for construction

industry "construction workers". In this theory, all construction workers are

fully multiskilled and could be used flexibly across any task in the project.

Varying levels of skill acquisition are still recognized within this multiskilled

craft grouping. Functionally, this labor strategy identifies a maximum to the

benefits of multiskill craft utilization that are quantified (Burleson et al. 1998).

2.12 Factors behind low-productivity in construction sites

2.12.1 De-motivation of workers

De-motivation of workers is considered one of the primary reasons behind

labor inefficiencies, de-motivation include, discontinuity of job assignment

and feeling of purposelessness due to idle time on the job site. Both of these

de-motivators negatively impact the attitude of the workers and act to lower

overall productivity (Gomar et al. 2002).

2.12.2 Workers short employment duration

Many of construction workers face problems resulting from short employment

duration, frequent layoffs and periods of unemployment between jobs because

of the flow of work and manpower fluctuation experiences in construction

industry productivity (Gomar et al. 2002).

(Zakeri et al., 1996) Stated the following causes behind the low

productivity of construction workers

1. Lack of material.

2. Weather and site condition.

3. Equipment breakdown.

4. Drawing/specification/ change orders.

5. Lack of proper tools and equipment.

6. Inspection delay.

7. Absenteeism.

8. Safety and accident.

9. Improper plan of work.

10. Repeating of work.

11. Changing crew size turnover.

12. Interference at work.

13. Poor communications.

(Kaming et al., 1997) Studied the factor influencing the craft's

productivity in Indonesia, and they are as follow:

1. Characteristics of the construction project.

2. Type of the employer.

3. Length of stay with employer.

4. Length of stay with similar type of projects.

5. Age of the craftsmen.

6. Experience of the craftsmen.

7. Experience by type of buildings.

8. Type of training / education background.

9. Method of construction.

10. Site management.

11. Working environment.

12. Level of payment.

13. Unproductive time of a typical work per week (Internal delay, lack of

skills, waiting and relaxation, or supervision).

14. Material unavailability. (On-site transportation, excessive paper work

for request, improper material storage, or/and inadequate planning).

15. Rework due to, poor instruction, design changes, poor workmanship,

or/and complex specification.

As stated earlier, multiskilling is a labor strategy that solves many of the

causes of low productivity of workers. With this strategy workers will have

longer duration period on work, continuity of work assignment, decrease the

idle time, also improve workers payment and incentives, good safety

conditions, and decrease the total labor cost (Burleson et al. 1998).

2.13 Manpower development and planning:

The aims of manpower planning are to maintain satisfactory human resources

levels both in quantity and quality, to maximize the performance and well-

being of existing human resources and to anticipate potential human resources

surpluses/deficits and identify associated problems (Thomas, et al. 2001). The

key stages are summarized. These comprise of:

2.13.1 Assessment of existing manpower (Stage 1)

a. Age distribution.

b. Job experience.

c. Length of service.

d. Salary/wage pattern.

e. Performance.

f. Education level.

g. Training.

2.13.2 Assessment of external factors (Stage 2)

a. Physical factors climate, location, transport.

b. Technological factors- new technology and workers

knowledge.

c. Social and political changes- local level of

employment, population shift, and economic trends.

2.13.3 Establishment of training and staff development policy

(Stage 3)

a. Redundant skill and experience.

b. Performance.

c. Rate of accident.

d. Labor turnover rate.

2.13.4 Forecasting labor demand and (Stage 4)

a. Type of employment needed.

b. Number of employees needed.

c. Number of staff leaving.

2.13.5 Forecasting labor supply (Stage 5)

a. Internal supply- like future vacancy, and actual jobs.

b. External supply.

Demographic change.

Economy.

Demand for specific skill

Government polices.

2.14 Human resources training and education

The nature of the human resources problem and its pervasive effects indicate

the need for extraordinary action to upgrade managerial and technical skills,

broaden their range and increase their totality. Training and education are,

consequently needed at all levels and across a wide spectrum of technical

disciplines. Considerable research is also required. The training term in

construction industry can be defined as Training refers to the methods used to

give new or present employees the skills they need to perform their jobs

(Dessler, 2000). Investment in training, equipment and research and

development by UK construction firms has fallen in since the late 1970s. In

spite of this, labor productivity rates appear to have grown by more than 5 %

between 1981 and 1995. This was a faster rate of growth than the average for

the economy as a whole. Although the data are problematic in term of

reliability and comparability, labor productivity levels in the UK compare well

internationally and recently have been higher than France, Germany and Japan

(Gann and Senker, 1998).

2.14.1 Education and training

The craft training should be given equal importance are often inhibited by

inadequate financial resources and paucity of technical teachers, the latter is

itself one of the consequences of underdevelopment of human resources.

Because of their inability to achieve the objective of improving skills with

their own resources, many developing countries have resources to external aid,

thus personnel may be trained in developed countries, specialists from those

countries may conduct training locally and/or joint venture may set up (Impert,

1990). Above all efficient on-site production and organization are tasks for

qualified workers. They work to a great extent autonomously and responsibly,

so the cost for instruction, supervision and quality control can be restricted.

Moreover, qualified construction workers are not just trained in one particular

area; they also have a certain basic knowledge of other construction trade

without incurring high transfer costs every time (Syben, 1998).

Although self-employment and subcontracting provide a flexible structure in

terms of response to short-term market fluctuations, they are not conductive to

longer-term investment for culture growth by firms. Fluctuation in output,

smaller size and specialization of projects makes it difficult for individual firm

to plan labor requirement. Moreover, frequently short-term competitive

pressures lead to poaching of skilled labor and act as a future disincentive to

training, for these reasons, few construction firms develop human resources

plans and most take insufficient interest in integrating training into their

corporate strategies (Gann and Senker, 1998).

Vocational training and employee development are issues that are of key

concern to personal practitioners at present, as traditional forms of training are

in decline, but there is little evidence of new training initiatives having

achieved a widespread impact for the core work force. In part these issues

have been given renewed attention as skill shortages have accompanied the

growth in unemployment and self-employment (Agapiou, 1995 b).

Training is one of the areas in which line management responsibility has

increased significantly over the last few years. But with the extent of self-

employment and the decentralization of decisions on training expenditure,

there is a question mark over the ability of companies to make a significant

impact on skill shortage (Druker, 1996). Indeed, what is required more than

ever before is a highly trained cadre of people who are alive to the needs and

realities. Training and education have a dimension beyond that of direct

improvement of the level and spread of skills. These skills must themselves be

so imparted as to create an intrinsic capacity for generation, and utilization of

technology (Impert, 1990).

Construction employers and their workforce need to be aware of regional

differences in the availability of trainee labor when considering alternatives

recruitment strategies. The availability of certain labor groups in any region

depends on different regional factors, including staying-on rates,

unemployment rates, and the concentration of ethnic minorities as a

percentage of all employment. These factors taken together with forecast of

output levels provide and indication of what would be appropriate training

strategies. (Agapiou, 1995 a)

So, we question whether the outputs of current training programs are sufficient

to meet current and future needs. Is the skill structure sufficiently adaptable to

support innovation? To what extent should training be broadly based? To what

extent should it be specific to particular trades? Do structure sand institutional

rigidities hinder training de