Construction

Major Challenges Facing the Construction Industry

 

Modern Slavery 

Most responsible construction firms have in place strict employment checks for new starters.  It is important however not to be complacent, documents can be forged, processes corrupted and even legitimate workers can be subjugated.  The ubiquity of agency staff and self-employment provides opportunity for perpetrators of modern slavery.  

Wages are easily redirected or accounts seized from vulnerable people.  It is also important to hold your suppliers to the same high standards you have implemented, as less reputable firms may turn a blind eye to labour abuses in order to be more competitive. 

It is vitally important that you have in place appropriate policies, practices, training and reporting to prevent labour abuse and modern slavery entering your workforce or supply chain. 

 

Health and Safety Breaches 

Health and Safety is clearly a vitally important subject to the construction industry due to the high-risk nature of some of the work which takes place.  Accordingly, organisations commit a great deal of effort to ensure that policies and procedures are in good shape and that they are updated regularly. Activities typically include risk assessments, effective training and provision of appropriate personal protective equipment. Unfortunately, incidents do still occur.  

A small number of incidents may be unavoidable, however some will result from breaches of Health and Safety arrangements.  Breaches are primarily the result of complacency, it is therefore important to ensure that on-boarding training is in place and refreshed throughout the period of employment.   

It is also important that you have appropriate reporting mechanisms in place.  The reporting of an incident presents an opportunity to prevent the incident reoccurring, whether that be refreshing policies and procedures, refreshing training or disciplinary action.   

Fraud, Bribery, Theft and Corruption 

The prevalence of short-term contracts amongst unskilled and semi-skilled workers makes oversight difficult and minimises the consequences of being caught. Typically, individuals suspected of acquisitive crime will simply be let-go without substantive investigation or formal disciplinary action. This allows the individual to simply move on with no record of the concern.

The vastly complex supply chains required by the construction industry also represent a fertile space for procurement fraud. Offers of kickbacks are common and attractive, resulting in inefficient and sometimes ineffective procurement and can cause substantial reputational damage. Bid rigging causes similar issues and ultimately inflated pricing. Disputes are also common arising from supplier low-balling practices.

Inventory theft is also a common way for workers to supplement their income. Stock is removed covertly, perhaps through over specification or written off as damaged, and sold on by the worker for personal gain.

Due to the complex movements of large amounts of money through small transactions, financial fraud also represents significant risk to construction firms through skimming and lapping schemes.

Bullying, Harassment, Racism and Discrimination

‘Banter’ is an important part of workplace culture and can build moral and camaraderie. When it goes too far however it can have the opposite effect and can be very damaging to workplace culture and productivity.

It is important to know the difference between teasing a new starter and bullying an individual which can cause real harm or detriment. Typically, behaviour becomes unacceptable when it takes place over an extended period, when it causes distress to the recipient(s). Unacceptable behaviour should be clearly set out in your Code of Conduct and your training.

In addition, it is important to provide means of reporting inappropriate behaviour in the workplace.

 

Substance Abuse Issues

Individuals suffering with substance abuse sometimes allow these issues to seep into the workplace. The construction industry is certainly not alone in facing the impact of substance abuse in the workplace. The loss to companies in the United States due to alcohol and drug-related abuse by employees totals $100 billion a year, according to the National Clearinghouse for Alcohol and Drug Information (NCADI). The impact of substance abuse in the workplace include;

  • Increased Absenteeism
  • Decreased Performance
  • Poor Decision Making
  • Health and Safety Breaches
  • Worker Exploitation
  • Low Moral
  • High Attrition
  • Illegal Activity

The risks associated with substance abuse in construction are particularly high due to the dangerous nature of the work being undertaken. The Health and Safety risk associated with a worker being under the influence are significant. A survey conducted by The Considerate Constructors Scheme in 2016 found that almost 2/3 respondents agreed that substance abuse was an issue in the Construction industry and over 1/3 of respondents had witnessed substance abuse amongst construction worker colleagues.

Safecall receives twice as many reports relating to substance abuse from construction organisations when compared to all sectors. Many organisations have implemented random drug testing to discourage and identify substance abuse and whilst often controversial, these programmes can be an effective tool. Confidential reporting is also an effective means of preventing and detecting substance abuse issues. Once identified it is important that the response is considered and consistent across the workforce offering support where appropriate.

 

Protect your Business

 

Combatting Misconduct within the Construction Industry

The construction industry is diverse with a wide range of smaller specialist firms and larger organisations representing the various scale of projects undertaken.  The industry as a whole shares some common characteristics which present a number of challenges for compliance, human resources and legal teams. 

Unskilled / Semi-skilled labour – high turnover of workers with loose employment relationships, such as day labourers, does not generate loyalty to the business and limits the consequences of misconduct. 

Complex supply chains – supply chains in construction are deep, distributed and complex, it is difficult therefore for organisations to monitor the activity of third tier sub-contractors or suppliers. 

Large sums of money  construction projects of all scales involve enormous sums of money which changes hands frequently resulting in increased opportunities for financial misconduct. 

These characteristics create issues relating to oversight and monitoring, conflicts of interest and accountability.  As a result some individuals are able to commit crime or behave unethically for extended periods of time creating a drag on performance. This can mean incurring direct costs, such as asset loss, and indirect costs, such as reputational damage within industry participants. 

Conclusion 

The Construction industry is at risk from a wide range of potential worker misconduct due to its structure.  These challenges, while not unique to construction, can damage productivity, reputation and workplace culture if not managed appropriately.   

The successful management of these risks depends on the following factors; 

Policy and Process – Organisations should have in place a comprehensive and clear set of policies covering expected standards of behaviourthe investigative process, anticipated outcomes and how and why someone should make a report.  Whether present in standalone policies or amalgamated into a Code of Conduct your policies should cover;  

  • Attendance and Timekeeping 
  • Confidential Reporting / Whistleblowing 
  • General Conduct 
  • Gifts and Hospitality 
  • Equal Opportunities 
  • Investigations 
  • Health and Safety 
  • Modern Slavery  
  • Substance Abuse 
  • Testing 

These policies must also be clearly communicated and enforced in order to be effective.   

Training 

Your workforce should be in no doubt of the behaviour expected of them and the policies and processes that are in place to protect them and their colleagues from harm and to promote productive work environment.  This is particularly relevant with a transient workforce as the workplace culture can be weaker.  Communicating your policies can be harder with a less stable workforce, so you may need to get creative 

Conduct training should be part of your induction process and should be refreshed periodically, particularly following any substantial changes to your policies or processes. 

Leadership 

Organisational leaders, at all levels, play an important role in setting and maintaining standards.  The tone from the top must be appropriate and the organisations leadership should lead by example and not just pay lip service to your policies.  The behaviour of leaders trickles down through an organisation and can have a positive, or negative impact.  Create a culture where everyone has ownership and responsibility for doing the right thing. 

Confidential Reporting 

It is important to enable your workforce to raise concerns. This is the most common and effective means of detecting misconduct which can then be resolved.  Without these tools in place misconduct will go undiscovered and unresolved, damaging morale and acting as a drag on performance.  The EU has recently established a minimum set of protections for workers who raise workplace concerns which is currently being implemented in all 27 member states.

Organisations which face up to these challenges and manage their risks appropriately will be rewarded with positive cultures and superior performance in the long term.   

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