Construction Process - Economic
The old adage 'you have to measure to manage' is now well supported by an array of benchmarking and performance improvement groups within companies and across the industry. Implementation during the construction process determines the economic performance of the companies involved.
The recruitment, retention and skills crisis of the industry has a serious economic impact on the construction process. Difficulties in recruiting and retaining enough trained staff uses site management time, increases costs and reduces time predictability. Some companies are overcoming these problems by using innovative construction techniques, procurement processes and training programmes to guarantee the future of their company and therefore the industry. Companies are questioning whether traditional construction processes will ensure continuing cost reduction, repeat business and profits.
Sustainable procurement is about clients finding the appropriate vehicle by which to deliver the desired building. Many organisations are going down a partnering procurement route and reaping the economic benefits. Partnering is the most popular innovation within the demonstration programme. Contracting parties create a working culture that is based on trust and cooperation. Partnering aims to involve all members of the supply chain as early in the project as possible and promotes a positive culture to reduce conflict to a minimum.
Use the KPIs.
Since 1999, central government (supported by Constructing Excellence and the Construction Industry Council) has published an annual wall chart of the headline KPIs. As explained in the introduction all the demonstrations are required to measure their KPI performance. The demonstrations in this report that have returned their data, support the excellent overall results of the programme, such as:
- demonstrations are 2 percentage points more profitable than average;
- demonstration construction costs are 4% lower than average;
- accidents on demonstrations are 50% fewer than average;
- support for Respect for People KPIs.
To achieve this, the demonstrations have utilised innovative materials, new building technologies, new forms of contract and set up more communicative integrated teams. Reductions in defects and improvement of client satisfaction have an economic impact, but also improve social and environmental performance.
Maximise opportunities for local businesses. labour and training.
The construction industry currently has a major skills shortage which will only worsen without more recruitment into the industry. Communities have traditionally grown around areas of commerce and local companies service these cities, towns and settlements. 96% of construction companies employ fewer than seven people, so construction is a business on a local scale. National companies have regional sections and whilst a network of subcontractors can travel to service various areas of the country, the majority of employees prefer to work relatively locally.
It is with this in mind that employers are recruiting local people to be trained on long-term refurbishment and regeneration projects. Consequently if a housing estate has a roll-out refurbishment programme over many years, it is in the contractor's interest to recruit and train local employees. At the end of the programme they can move onto another project or perhaps stay on the programme in a maintenance capacity. On a national scale the industry gets much-needed recruits and on a local scale employment increases and money is ploughed back into the local economy.
Portsmouth County Council Gas Central Heating Partnership (demonstration number 1116) provided United House Limited with the opportunity of a long-term refurbishment contract on which to train members of the local community.
The four year programme included the installation of gas central heating systems for Portsmouth City Council in approximately 4500 homes.
Because the strategic partnership provides continuity of work, United House has set up an alliance with a local training provider, to help draw people from the local community. They gain the skills and qualifications that provide not just temporary work but a life-long career. All parties involved contributed to a win-win situation: Portsmouth County Council made an empty property available for the training, United House supported the training and the training approach was recognised as eligible for government support. To date, United House has given employment to two trainees.