Chartered Management Institute: In My Opinion

Garvis Snook, CEO of Rok and a CMI Companion, blames backward working practices for underperformance in the UK construction industry.

A dog, a wife and a mulberry tree, the more thee beat them, the better they be. So says the ancient rhyme, and in my industry, at least, there seems to be a belief that metaphorically 'beating' subcontractors is also the way to get the best out of their workforce. The result is an industry that is responsible for nearly 10% of GDP yet has a reputation for unreliability in terms of cost, time and quality. At the heart of this lies a failure by managers to build employee engagement.

Fifty years ago or so, builders and contractors in the UK had vast labour forces that they'd developed over many years. The core skills of these labour forces were highly valued. It was normal to sub-contract only highly specialist trades. Labour laws were flexible; if there was a period of poor weather, insufficient work or if any employees were ill, the employer could send them home at a moment's notice and re-hire them when circumstances had changed. This allowed the employer to keep costs under control.

With growing unionisation of the workforce, pressure built for better terms and conditions. Employers were forced to concede. By the mid-70s, the workforce had gained many of the privileges enjoyed today. Or at least, those who remained directly employed did, because the industry's leaders came up with the most damaging wheeze: they encouraged the labour force to become self-employed, citing freedom and reduced taxation as inducements. So employers regained flexibility of resource, with the added bonus of greater certainty on cost, because they needed to pay only for work actually done.

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