Aurecon Singapore: Addressing Skilled Labor Shortage in Engineering

This report examines the critical issue of skilled workforce shortages within the construction and engineering industry, using Aurecon Singapore as a case study. It delves into the management challenges faced by Aurecon, particularly concerning human resource information systems, employee participation, and motivation, with a focus on attracting and retaining skilled labor. The report explores various strategies, including McKinsey's 7S, Blue Ocean Strategy, Porter’s Generic Strategy, and TOWS matrix, evaluating their merits and demerits for application within the organization. It reviews relevant literature on attracting skilled labor, and provides theoretical and empirical evidence to support proposed recommendations aimed at improving organizational effectiveness and market position. The analysis considers both internal and external factors impacting Aurecon's operations in Singapore, offering a comprehensive overview of the problem and potential solutions to address the skilled labor shortage.

Running head: AURECON SINGAPORE
Aurecon Singapore
Name of the student:
Name of the university:
Author note

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Executive Summary
This report has looked into the major issue of skilled workforce in the construction and
engineering industry by taking Aerocon Singapore as case study. Different strategies with their
merits and demerits were discussed to find out if they are suitable to use in the organization.
Different secondary sources were reviewed to find out about this issue in other industries and the
ways management has dealt with the challenge.

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Table of Contents
Introduction......................................................................................................................................3
The management challenge.............................................................................................................3
Skilled labor shortage..................................................................................................................4
Research question (the construction industry is not attracting the skilled labor that it needs)....4
Literature review of attracting skilled labor to the company.......................................................5
Analytical frameworks.....................................................................................................................6
Mckinsey’s 7S strategy................................................................................................................6
Blue ocean strategy......................................................................................................................7
Proposed recommendations/ proposals............................................................................................9
Theoretical evidence....................................................................................................................9
Porter’s generic strategy..........................................................................................................9
TOWS matrix.........................................................................................................................10
Empirical evidence....................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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Introduction
Aurecon is a private company based on engineering, project management, design,
management, planning, and consulting. It was founded in the year 2009 with the headquarters
located in Australia and South Africa. They have a total of 80 offices spread in 27 countries with
more than 7500 people. Aerocon was formed by merging the three engineering companies of
Africon, Connell Wagner and Ninham Shand (Aurecongroup.com, 2018). All these companies
were ranked among the top firms as they operated in both the public and private sectors. The
popular projects of Aerocon Singapore are the sail at the marina bay and Fusionpolis at the one-
north Business Park. The sail is a waterfront lifestyle apartment whereas Fusionopolis consists of
different research organizations, high- tech companies, retail outlets and government agencies.
This report will consider the case of Aurecon in Singapore and the management
challenges faced in that organization. the aim of this report was to solve the management
challenge by selecting the suitable approaches. This report will consider the discovery of most
up-to-date management thinking to help in identifying the highly advanced solutions. Not only
the suitable approaches but also the strategies, which are not applicable, will be discussed.
The management challenge
The report has discussed about the management challenge that is prevailing in the
Singapore market of Aurecon. The analysis of the internal and external factors of the company
found out that although Singapore is an appropriate area for conducting business but there are
certain management challenges. The company is experiencing challenges in the field of human
resource management specifically in the knowledge management. This is known as human

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resource information system (Zhou, Goh and Li 2015). The other two areas of problem are lack
of employee participation in sharing knowledge and employee motivation. Among these, the
most prominent challenge is the shortage of skilled labor which will be described below.
Skilled labor shortage
As per Cannon and Hillebrandt (2016), shortage in skilled workforce is a raging issue in
the engineering sector of Singapore and Aurecon was hit. The country has to rely heavily on the
migration of human resources who will be suitable to work in the engineering sector of Aerocon.
Engineers are a critical resource for effective management that includes the role of advanced
technology and digitization. The demand for engineering talent and the designers or planners in
the organization are able to use multi- disciplinary skills that are increasing in the private sector.
Therefore, knowledge sharing has become important for carrying out different functions in the
organization. However, management challenge is arising due to lack of employee participation
and motivation (Walker 2015). They are not interested in sharing knowledge to add value to the
organization. That is the reason why the managers are finding it difficult to attract new talents
and as a result of that the market position of Aerocon was hampered. To shed light on this issue a
list of research questions is provided.
Research question (the construction industry is not attracting the skilled labor that it
needs)
The following research questions are set based on the challenges faced in attracting the
required skilled labor in the construction and engineering sector with particular emphasis on the
Aerocon Singapore.

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1. How organizational effectiveness can increase by attracting new talents within Aerocon
Singapore?
2. What are the issues faced by construction and engineering industry in drawing new
talents?
3. How will Aerocon gain a suitable market position by increasing capital knowledge?
Literature review of attracting skilled labor to the company
In the book ‘strategic information management: challenges and strategies in
managing information systems’ by Robert D. Galliers and Dorothy E. Leidner, it is mentioned
that the key aspects of strategic information management is associated with information system
planning and strategy. The popular 7- S framework of McKinsey in this book has stressed on the
market positioning. The authors have stated that the tendency for management to adapt to
negativity is an outcome of previous bitter experience. Knowledge management has been
considered as the contemporary function of the mangers and this concept has emerged due to
knowledge being the major resource for an organization. This literature is suitable in the case of
Aerocon Singapore because knowledge management is a critical issue in that organization and 7-
S framework was regarded as one of the suitable approaches in this case (Galliers and Leidner
2014).
The article ‘Cultural Industries: Product–Market Characteristics, Management
Challenges and Industry Dynamics’ by Mirva Peltoniemi has focused on the increasing
importance of finance in the cultural interest. This paper has aimed at the rethinking the
industries by limiting within the boundaries, characteristic features and the dynamics that follow.
A future study framework was portrayed in this article for selection criteria and performance.
The researcher of this study has created extreme uncertainty that might be faced by the

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managers. This is an appropriate literature review in this case as the particular topic deals with
the challenges faced by the managers in their organization. It was found that the management
challenges are not common only in engineering sector but also in cultural sector (Peltoniemi
2015).
In the article ‘Multi-level agile project management challenges: A self-organizing
team perspective’ by Rashina Hoda and Latha K. Murugesan, the focus has been put on the self-
organizing team that present a high level of autonomy. Project management activities are shared
among the teams such as planning and estimation that influence daily project tasks. This study
has recognized eight project management challenges, which was experienced by the team and the
management. Instances include change in requirements, attaining cross- functionality, asserting
autonomy in the organization. This is suitable in this case, as the Aerocon Singapore is a
company based on project management and designing therefore similar issues can be associated
with it (Hoda and Murugesan 2016).
It can be summarized from this literature review that the management challenges are not
limited to engineering sector only and step have been taken by other industries for resolution.
The strategies of VRIO, SWOT and PESTLE was used by other industries to analyze the issues.
This report will consider other strategies and look out for their suitability.
Analytical frameworks
Mckinsey’s 7S strategy
The 7S strategy of Mckinsey is used as an organizational analysis tool to evaluate and
supervise the changes in the internal environment of the organization (Hughes, Champion and
Murdoch 2015). The 7-S in the framework signifies structure, system, strategy, style, staff, skills,

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and shared values. This model can be used by Aerocon Singapore to improve their organizational
performance and find out the modifications that might change the future of the company. By
implementing this model in the organization, it will be helpful to make amendments in the
specific processes during merger or acquisition to consider the best strategy for implementation.
On the other hand, there are limitations of this framework such as the external
environment lacked in this particular framework. This model did not describe the concept of
performance or effectiveness. These are the two limitations of this model, which might restrict its
implementation in the Aerocon Singapore organization.
Fig: Mckinsey’s 7-S model
Source: (Sousa, Almeida and Dias 2014)

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Blue ocean strategy
According to Lavender (2014), this strategy refers to the creation of a new market space
by the company in order to make the competitors inappropriate as it helps in defining new
consumer value by reducing the costs. This new market space was significant as the blue ocean
in this model. It has used numerous methodologies, tools and frameworks to originate the
strategies of Blue Ocean. This model can be helpful in linking the overall system of the
organizational activities with the strategic choice of differentiation and reduced cost. By using
this framework, Aerocon Singapore will be able to focus on a bigger picture, which is beyond the
existing demand. It will help the organization to set standard in the market by achieving high
profit margin. It will be able to create brand equity for long term.
On the other hand, there are few disadvantages of this framework such as if this
framework is not implemented properly then there is a chance that market complacency can be
promoted. There is a probability that the blue ocean might turn into Red Ocean, which competes
in the existing market space. Moreover, as it is an intermediate strategy is why there is no
assurance that the Aerocon Singapore will get the benefits (Mok, Shen and Yang 2015).

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Fig: Blue ocean strategy framework
Source: (Demirkesen and Arditi 2015)
Proposed recommendations/ proposals
Theoretical evidence
Porter’s generic strategy
According to de Carvalho, Patah and de Souza Bido (2015), Porter’s generic strategy
signifies that the relative position of a firm within the industry evaluates if its profitability is
more or less than the industry average. The basic of this profitability for long term is sustainable
competitive advantage. The two basic categories of competitive advantage include low cost and

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differentiation. These two basic kinds of competitive advantage if mixed with the scope of
activities can attain three general strategies. The firms are eager to achieve the strategies that are
cost leadership, differentiation and focus to attain average performance in the industry. Out of
these three, focus has two varieties, cost focus and differentiation focus. By implementing this
strategy, Aerocon Singapore will be able to achieve competitive advantage in the market.
On the other hand, Kaiser, El Arbi and Ahlemann (2015) have contradicted that there are
few criticisms about this framework. As it is a hybrid strategy, therefore the business were
conducted without being struck in the middle. Moreover, one of the three strategies, cost
leadership is unable to sell the products itself. Again, price was used only sometimes to
differentiate therefore it might be a challenge for the Aerocon Singapore. The ultimate factor of
differentiation will help in increasing the sales volume instead of charging a premium cost. In
addition to these, there are other criticisms such as superseding of generic strategy framework by
competence based strategy framework. There are a number of limitations but still the model can
be effective for the evaluation and analysis of competitive advantage sources.
Fig: Porter’s generic strategies

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Source: (Othman et al. 2015)
TOWS matrix
TOWS matrix helped in thinking about the strategies of the whole organization, a specific
department or the team. Kumaar et al. (2016) has stated that this matrix will also be helpful in
thinking about the marketing campaign, a process or individual skills and experience. Although
it sounds similar to SWOT but there is a difference between the two. SWOT evaluates the
internal environment of the organization whereas TOWS analyzes the external environment. This
matrix will be helpful in determining the strategic alternatives to gauge the threats, opportunities,
weaknesses and strengths of the external environment of the organization. In addition to that, the
TOWS matrix is also effective in finding the goal of the organization on a long- term basis. If
Aerocon Singapore implements this matrix in their organization then they will be able to reduce
the weaknesses and increase the opportunities.
On the other hand, Pousette and Törner (2016) has argued that there are few limitations
of using TOWS matrix, which can be considered before implementing it in the organization. The
matrix only considers the external environment of the organization and not the internal
environment. Therefore, it is a drawback on the part of this model and Aerocon Singapore need
to consider this before implementation. Moreover, the process will be conducted on a regular
basis in order to make it effective, which is not possible always. This tool of analysis needs the
support of other tool such as SWOT analysis or others to be efficient in the operation of the
organization.

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Fig: TOWS matrix
Source: (Kamsu- Foguem and Abanda 2015)
Empirical evidence
The issue of labor shortage is becoming a challenge for the growth of industries in
Singapore and the recreating of economy to deal with the stress. Due to lack in domestic labor,
there is need for hiring skilled foreign labors. The firms are also adopting other methods such as
making investments to build advanced technology and make efficient business processes. The
issue of lack in skilled workers has spread all over for instance, Randy Strauss, the owner of
Strauss Construction in Amherst, Ohio mentioned that the major issue in the industry is the cost
and availability of labor. Again, in a research carried out by Ken Simonson, the chief economist
for the Associated General Contractors of America it was found out that the construction
industry is actually very strong and healthy. His firm has continued to expand to be in line with
the demand of service. However, growth in the construction industry would have become
healthier if there were more skilled workforce (Smol et al. 2015).

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In another case, multiple Utah general contractors have agreed to the statement by the
previous speaker by adding the information that the place has labor shortage. The great recession
was one of the cause behind the shortage in workforce and the young people are not finding the
work as glamorous as others are. The Big- D construction company in Utah is trying to resolve
this issue by attracting new talents towards this field. He has mentioned that a willing and
motivated individual ha the scope to make good money in this sector. That is the reason why,
they are one among the few companies that pay the total health care costs of the employees in
addition to the funding of their health savings accounts (Kassem, Dawood nd Chavada 2015).
Construction companies will need to think differently to deal with the issue of labor
shortage. For instance, Blueprint Robotics is a company that excels in building apartments and
commercial properties in Baltimore, United States by using assembly line approach. This
company has used robotic to finds an alternative to labor shortage. They used this innovative
concept to fill the gap created due to lack in workforce.
Conclusion
It was concluded from this report that the issue of lack of talent pool in the construction
industry is significant all over the world. Specific examples have been used to shed light on this
issue and the steps taken by the managers to resolve it. The statement of different managers of
construction industry helped in bringing out the causes that might have led to the shortage in
skilled workforce. The research questions were set by aligning with the objectives of the
Aerocon Singapore. The merits and demerits of the probable strategies found out the
effectiveness in the specific organization. Review of previous literature found out more about
this issue in other industries and the steps taken to mitigate it.

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References
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https://www.aurecongroup.com/projects/by-location/singapore [Accessed 13 Mar. 2018].
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on project success: Cross-country and cross-industry comparisons. International Journal of
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Demirkesen, S. and Arditi, D., 2015. Construction safety personnel's perceptions of safety
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Hughes, W., Champion, R. and Murdoch, J., 2015. Construction contracts: law and
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Kaiser, M.G., El Arbi, F. and Ahlemann, F., 2015. Successful project portfolio management
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Kamsu-Foguem, B. and Abanda, F.H., 2015. Experience modeling with graphs encoded
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