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At the start of August, I had the chance to lead a panel discussion at the 2022 CCNZ-HIANZ Conference in Christchurch. Five panelists from various fields within the industry discussed the current state of the civil construction industry and best practices to ensure its growth amid increased pressure. They are Gary Richardson, GM Sales, and Marketing, Hirepool; Ed Richardson, Managing Director, Youngman Richardson; Tom Kimber, General Manager, Kennards Hire; Jeremy Dixon, Chief Executive, Isaac Construction; and Mark Evans, Chief Executive, HEB Construction.
Based on the insights, case studies, and most of all the findings from the 2022 Construction Industry Survey, I was impressed to hear how incredibly resilient the industry has been over the past year despite strings of challenges. At the same time, businesses could use more support in attracting the next generation of talent, leveraging technology adoption, and a clearer project pipeline.
Optimism amid increased pressure
Drawing on the most pressing issues New Zealand contractors are facing, panellists pointed out several hardships, from severe labour shortages and the highest inflation rate in three decades to supply chain disruption and unfavourable contract terms.
Although businesses are fully aware of increased pressure, they remain optimistic about what lies ahead. It is encouraging to find that 63 percent respondents were confident that their business would be able to ride through change and challenges (up from 61 percent in 2021).
When it comes to industry challenges to future growth, labour shortages remain the most concerning issue. The tug-of-war for construction workers has grown more intense, as New Zealand isn’t the only country that is desperate for labour. In July, Irish leader of the Opposition, Mary Lou McDonald, said that she wants to encourage migrants in Australia to come home. New Zealand is losing 50 percent of offshore hires in the Philippines to Canada. Meanwhile, a recent McKinsey report suggests that the worrying trend of the Great Reshuffle is not likely to end anytime soon. Globally, up to 40% of workers say they plan to quit their job in the next 3-6 months.
Change our approach
Amid this workforce crisis, the discussion raised a question: What can we do differently to compete when it comes to recruiting workers from overseas? Panellists suggested that the top priority should be improving desirability of New Zealand as a destination to call home. Higher pay won’t necessarily solve the problem. There were calls to fast-track and simplify the migration process for high-skilled migrant workers with the right qualifications, instead of just issuing 3-year working visas. It's a hard and simple truth – people can choose to settle where it works for them, they won’t risk coming to a place with massive uncertainty on their future.
According to panellists, it’s important to tap into the existing talent pool in New Zealand and consider how we can expand the industry’s net. The industry has done its part is education and training programmes to set mentees up to enter the industry, for example the Māori apprenticeship and the GirlBoss Advantage programme offering young women a chance to participate in STEM. But we need to keep it up, thinking about how we show the opportunities the industry can offer potential workers with diverse backgrounds and insights.
Panellists’ insights revealed that mentoring the next generation with a focus on attracting young people, Māori, Pasifika and women is largely about making them interested in our job. When I asked what keeps them in the industry, I could hear loud and clear the enthusiasm in their voice. Whether it’s a sense of achievement when completing a difficult project, the satisfaction of flexing your problem-solving muscles, or the moment your child sees vehicles on the road and says “Dad, that’s one of ours”, there are many reasons to keep us getting up every morning and looking forward to our next project.
It’s about upselling the industry beyond work boots. In fact, the industry is connecting families and communities. It isn’t just building roads, rails or bridges but access for people. When we take pride in our work, naturally people will be more interested in what we’re doing and can see what we’ve done.
That said, panellists indicated that it’s only fair that businesses have greater project clarity as support from the government. They have heard from the Minister about the government’s commitment to infrastructure, and from the Infrastructure Commission about its 30-year strategy. While the work pipeline sounds positive, knowing what to expect is crucial in terms of helping them plan for resources. A committed pipeline of work provides awareness and is also integral in the productivity of the sector.
Lean on technology more for productivity
It’s also worth noting that the discussion unveiled another theme, which is the urgency of stepping up in terms of technology adoption. This can provide a solution to the constrained workforce and cost escalation in the short term.
The 2022 Construction Industry Survey found that between 25 and 65 percent of people in civil construction do not use advanced technology to improve their efficiency, like fuel management or specific productivity-improving technologies. Panellists pointed out that contractors should be more aware of already-existing technologies, and the fact that digitised information has become a necessity rather than only a convenience.
Both the 2022 Construction Industry Survey and the construction panel discussion indicate that the industry is (cautiously) optimistic. Although project demand is on the rise, the last thing the industry wants to do is taking anything for granted. With a stronger focus on solutions, the civil construction industry is in good hands and good heart.