The digital revolution over the past several decades has made the world more accessible than before. It has prompted the emergence of new markets, created new products and goods, and facilitated rapid industrialization in emerging economies.
However, the engineering and construction industry has been slower to adapt to new technologies compared to other global sectors. In fact, the overall productivity of this sector has remained flat over the last 50 years.
The World Economic Forum has attributed this phenomenon to various internal and external challenges namely – the consistent fragmentation of the industry, the inadequate collaboration between suppliers and contractors, recruitment difficulties due to talent shortage, and insufficient knowledge transfer from various projects.
The Digitalist Magazine also noted several challenges facing the construction and engineering industry today:
Poor productivity and profitability
The barriers to enter the construction industry today are so low that it has created a saturated marketplace with a lot of competition. Heavy competition in the industry is sinking profit margins and constraining the potential to innovate with better technology.
Stagnant labor productivity is also exacerbating the problem. Construction and engineering companies are confined within the industry’s shrinking profit margins and stagnant productivity. This makes it harder for them to generate enough profit to invest in critical technology.
While opportunities for the construction business is growing, so does the complexity of the projects. As companies are already experiencing a decline in profit margins, the industry is struggling to keep up with complex projects. As such, construction companies rarely have projects that are on-time and on-budget nowadays. A KPMG Global Construction Survey found that more than half of all construction companies have one or more underperforming projects in recent years.
Skilled labor shortages
The construction and engineering industry is experiencing a dramatic reduction in the workforce. A Deloitte report noted that the industry’s talent shortage could negatively impact engineering and construction companies in ways such as: not being able to respond to market needs, losing projects, and failing to innovate. Thus, the combination of increasing project complexity and decreasing skilled labor experience pose significant risks. It can potentially increase the rates of deliverable delays, construction problems, and employee safety concerns.
The construction and engineering sector is known as the top global consumer of raw materials. Unsustainable industry practices could compromise the environment for the sake of growth. Climate change and water management are just some of the major environmental issues that the industry should face.
However, smart planning and sustainable design that reduces pollution and carbon emissions require a new approach to project management. This is an endeavor that the construction industry as a whole is not yet ready to be implemented.
Facing the crossroads of the construction and engineering industry
The construction and engineering industry is at a crossroads today. Companies that are willing to face the challenges head-on by transforming their business processes are more likely to achieve significant growth.
Meanwhile, businesses that fail to take on these challenges seriously are poised to face an uphill battle over the next few years. Deloitte’s 2019 Engineering and Construction Industry Outlook showed that the pervasive challenges in the industry have the potential to hinder the sector’s growth and momentum in the next few years.
The World Economic Forum identified several ways to help rebuild the construction and engineering industry for the 21st century:
Prioritize talent management
Winning the war for talent requires a new approach to the traditional workforce management in the industry. It involves a strategic workforce plan that takes into account the company’s demand for skilled labor to systematically plan the firm’s recruitment, retention, and training programs. Talent management needs to be a top priority since the industry is undergoing rapid digital transformation, both quantity and the quality of skilled workforce needs to be addressed.
Rejuvenate corporate culture
A great corporate culture attracts top talent. As such, construction and engineering companies need to implement a corporate culture that will wholeheartedly challenge the industry’s status quo and embrace innovation.
Invest in diversity
Construction and engineering companies need to start tapping into the non-traditional talent pools such as community specialists, women, and candidates with IT or data science backgrounds. As the industry is moving towards a tech-driven transformation, companies need to invest in employees with flexible skill sets.
Leverage technology and innovation
Companies that embrace innovation and new technology will not only make themselves future-proof but will also meet the demands of the talent shortage. As automation and new collaboration tools are poised to increase productivity, it also reduces the time of employees spent on site and makes the work less physically demanding for the aging workforce.
Foster learning and development
Continuous learning and development are essential to stay ahead of the curve in this rapidly changing industry. Construction and engineering companies need to integrate learning and development into their corporate culture by partnering with educational institutions or establishing an internal training center.
Create relevant incentives
Candidates today look beyond salaries and benefits when it comes to choosing an employer. Construction and engineering companies must up the ante if they want to compete in the ongoing war for talent. Try to look beyond the traditional salaries and benefits scheme and offer work incentives that will entice candidates to grow within the organization.
Recruitment in the construction and engineering sector
EnergiPeople, a technical workforce solutions provider for the energy industry, shared several tips in choosing the right recruitment agency for the construction and engineering sector:
TIP 1: Be clear about the role you’re searching for.
The construction and engineering sector is very broad. There are recruiters that cover specific areas and others who cover all. Some recruiters mainly look for contractual roles, while others focus on more permanent jobs. Make sure that you have appropriately identified the right recruitment agency with specific specialties that will suit your needs.
TIP 2: Ensure that they are experts in the field.
A recruitment agency may cover a wide range of fields in the construction and engineering industry. However, rather than looking for a one-size-fits-all approach, find an agency that has dedicated teams that are experts in specific fields. In-depth industry knowledge is important to find the right candidate for the right vacancy.
TIP 3: Choose the right recruiter based on their global reach.
There are a lot of global recruiters nowadays. While most of them may have a global reach, make sure that they have the right connections in specific locations. Look for specialized recruiters that have active operations in your target market.
TIP 4: Find out about the companies they recruit for.
Once your company has a clear idea of the roles that you need to fill, make sure that your recruitment agency has a vast network that will help source candidates for you. Look at their placement track record and find out which companies have already used their services.
TIP 5: Get independent recommendations.
Ask people in the industry to give you an impartial recommendation of the agency you are planning to work with. Word of mouth from trusted sources is still a valuable tool that will help you make the right choice. Get enough insights to help you decide whether they will suit your requirements.
Let us help you with your recruitment needs.
Curran Daly and Associates is one of the most trusted, go-to executive recruitment and search firms not just in the Philippines, but also in Asia and the Pacific. We have a team that collectively boasts of over 100 years of recruitment experience, both internationally and nationally.
Patrick Laheen has 25+ years’ experience as a Global Executive Search professional and has worked throughout EMEA on Executive Search assignments across multiple industries and has built up particular expertise in the construction and engineering sector most notably from his 7 years based in the Middle East.
Our experienced, well-connected headhunters have helped global organizations solve their recruitment needs. Partner with us and let us how we can help you with your recruitment needs.
2019 Engineering and Construction Industry Trends. (2019). Deloitte United States. Retrieved 22 August 2019, from https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/engineering-and-construction-industry-trends.html
8 ways the construction industry can rebuild itself for the 21st century. (2019). World Economic Forum. Retrieved 22 August 2019, from https://www.weforum.org/agenda/2017/05/construction-industry-recruit-talent/
How To Choose A Construction Engineering Recruitment Agency | Energi People. (2017). Energi People. Retrieved 22 August 2019, from https://energi.uk.com/how-to-choose-a-construction-engineering-recruitment-agency/
Shaping the Future of Construction. (2019). Www3.weforum.org. Retrieved 22 August 2019, from http://www3.weforum.org/docs/WEF_Shaping_the_Future_of_Construction_full_report__.pdf
Top 4 Challenges Facing The Construction Industry. (2019). Digitalistmag.com. Retrieved 22 August 2019, from https://www.digitalistmag.com/future-of-work/2016/08/15/top-4-challenges-facing-construction-industry-04388065