Contemporary Issues Impacting Entrepreneurship in Construction

This report delves into contemporary issues within the construction industry, evaluating challenges such as construction labour blacklisting, declining productivity, and project performance issues. The report analyzes the industry's significant contribution to the global economy and its susceptibility to various negative aspects, including safety and security concerns. It examines the impact of blacklisting, the ageing workforce, and labor shortages, while also addressing the need for improvements in productivity, technology adoption, and sustainable practices. The report explores the problem of blacklisting, the impact of the economic downturn, and the influence of cultural factors and governmental regulations on the industry. The report also addresses the importance of safety measures and the adoption of prefabricated construction to mitigate risks and improve efficiency. The report highlights the issue of blacklisting, discussing the formation of the Consulting Association and its role in maintaining the blacklist, which resulted in workers being rejected by employers and deprived of livelihood opportunities. The report also explores the trade union collusion and police collusion that affected the labour force.

Contemporary issue In
Entrepreneurship- Part
B

Table of Contents
Introduction .....................................................................................................................................1
Main Body ......................................................................................................................................1
Issue of blacklisting.....................................................................................................................4
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
The construction industry is considered as one of the largest sectors in the world which
contributes to the world economy and is valued around Euro 8Tn. Hence this makes around 13%
of the total world output. As there is a positivism in the industry this also includes some negative
aspects as well (Alberti and et. al., 2017). This has been seen that the construction industry is
facing the problem of construction labour blacklisting, poor productivity, profitability and
project performance. This has been seen that there are some of the contemporary issues that are
present in the construction industry which impacts the working of the labour present in the
industry. This report is based on the critical evaluation of the relevant contemporary issues that
are faced by the industry. Also the safety and security issues that are included in the industry are
discussed here.
Main Body
This has been analysed that the construction industry is considered as one of the most
reputed and financially strong industry in the world. The marker of the construction industry is
growing in parallel space and is the most significant sector according to the study that was made
by one of the reputed firm PwC, this contributes to around 11 percent of world's GDP. It is also
predicted that the global construction growth is considered as 13.2 percent. Also there are many
industries that seems to find themselves at the crossroads. This has been seen that the UK
construction industry is considered as weaker as compared to various previous years, the industry
is facing around three months low in the last quarter of the year 2018. This was seen that the
Purchasing managers index dropped to 52.8 in the final month of the year from 53.4. This has
been seen that the world business sector has a multiple challenges and the opportunities which
are relating to the productivity improvement (Alsharif and Tong, 2019). This has been seen that
the UK construction industry is facing the problem of improving the productivity for many years
and the due to which there is an increase in the value and the savings on time. It has been seen
that the construction productivity can be defined as the total value of construction divided by the
total number of hours. This has been estimated that the productivity in UK has been dropped by
20% since the last global financial crisis.
There are various issues that includes in the construction industry of the country which
includes the major problem of blacklisting the construction workers for the company. Some other
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issues that are related to the construction industry includes ageing factor of the workforce, lack
of diversity action, underperforming projects, labour and skills shortage,sustainability and safety
issues for the construction labour. As the construction industry has a rosy future ahead of it they
have to make some of the improvements so as to tackle competition which is becoming fiercer.
Companies should take decisions which would help them in reinvesting the money wherever
possible so as to put their company above other regarding safety, employment, technology and
the efficiency to survive.
This has been viewed through various articles and research at office for national statistics
that there is 14% increase in the number of workers which are aged above 40 years, while the
fallout from Brexit has caused government to drop the post Brexit immigration targets due to
which construction sites are grinding to halt (Best, 2017). This has been seen that in the recent
reforms that were reported in report of house of lords stated that construction sector needs a
radical overhaul and would also struggle to meet the UK needs for housing and infrastructure.
The problem of poor productivity in the construction industry is main cause of problems
for the entrepreneurs who are working in the construction industry. It is considered as an
exacerbating problems as lack of productivity is reflected in the bottom line of the industry.
While on the other hand it is seen from the different evidence which suggest that productivity on
whole has remained stagnant in the construction industry. This lack of improvements in the
construction industry is considered as fragmented within the industry. It has been seen that
despite the improvements in the digital adoption in the industry it has been largely antiquated
where the process of management are streamlined and documented. Also the additional factor
that results in low productivity in labour includes the cautiousness of firms which are investing
only and only in the valued adding equipment and technologies since the economic downturn.
As there is a shortage in the skilled labour market which is made up of four generation
which includes traditionalists, baby boomers, generation X and the millennials. It is regarded that
all of the work would be done differently and would possess different work ethics, attitudes and
different behaviours. As per the survey that was conducted by KPMG that shows around 40% of
the construction workers are Generation X, 37% are from the millennials (Bilal, and et. al.,
2016.). This was surveyed that most of the workers does not understand the fundamentals of
project delivery on time which was considered as one of the most important part in construction
industry to develop. As this lack of faith in the workforce will soon make up around half of the
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global workforce. Also the changes are happening now and the contractors must take the
appropriate steps so as to safeguard future. It is most important that technology should be used
by the construction company so as to perform their day to day operations.
There are various cultural factors that are related to labour force which is working in
construction industry. This has been seen that various inefficiencies prevails due to which the
productivity of the construction labours change. The challenge of delivering the product on time
and on the the prescribed budget this has been seen as a source of inefficiency in the industry for
a while (Bosi, Esposito and Kiviniemi, 2019). This has been seen that information is not well
managed and stored or is exchanged between the stakeholders due to which the duplication of
task are considered as all common among the industry.
Illustration 1: Construction industry Slowdown In UK
According to Tim Moore, the economic associate directors at IHS Market, said that,
“Subdued domestic economic conditions and an intense headwind from a political uncertainty
resulted in the weakest trends in the commercial work that was done in the previous seven
months.” As per the governmental regulations which has been committed to cut the green house
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gas emissions by the construction industry to 50% by the year 2050, this has to be achieved
through making a building which meets the construction work more efficiently according to the
guidelines that are provided by the government of the country. As the building blocks that are
already been built by the construction department does not meet the guidelines which are
provided by the government is a major cause of problem among the construction entrepreneurs
and government of country.
For the construction companies which are working in this line of business, it is important
for them to knock on the benefits which are used in cost saving. The companies in the industry
faced the difference between a loss and profit on a project. As it is required by the company to
have a prefabrication which would help in reducing the cost and the time of the product
subsequently. Also the company can use the installation process as they have to fit the completed
components rather than assembling each part on the site. Due to this they would be able to
reduce the need of labour in the construction industry and the work would be processed as early
as possible (Drozd, 2016). This has been seen that it is important to note that off site construction
doesn't come without challenges. As it is seen that if the component is installed or assembled off
site then it would lead to increase in the cost of the contract and would finally go above the
budget that has been allocated by the user.
In UK there are certain safety issues that are developing fire in the country, as
construction is one of the most dangerous work in which humans are involved. In the report that
has been published by eSUB it is seen that 71% reported that they has been involved in an
accident within the last year.
The companies are under a stricter safety rules than ever and subjected to financial and
even criminal penalties if this has been fund to put the workers at a undue risk. As such, the
contractors has to mitigate the risk so as to develop more stringent procedure so as to ensure
teams to follow them. The companies in the construction industry should check and consider the
essential precautions so as to protect the workers.
Issue of blacklisting
There is a main problem in front of the construction workers which includes being
blacklisted from the work (Edwards, 2018). This problem occurred in the year 2009 where the
investigator from the information commissioner office used to raid the premises of the
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Consulting association. While performing the duties they found various files including the
personal details of around 3200 construction workers. They confirmed that these were the files
that formed an illegal blacklist. The term blacklist initiated its way from the year 1970 where the
organisation called economic league held a list of around 30,000 trouble makers. Since from its
operations the league closed down as it was not of use for the government. However the files
related to the construction industry were kept and other service agent named TCA was formed in
the year 1993 so as to maintain the blacklisting service. Here the companies were used to pay
around Euro 3000 and it was clearly funded and supported by the key companies in the
construction sector. It was done as a view that supporting companies would ring the agency and
would advise a name. The agency would search for the name on the card and if the name is on
the card then the companies agent would ring back and specify what wrong has been done by the
person. Hence if they blocked the recruitment of the named individual then it would be recorded
in their records.
This was the major cause of problem for the labour who was willing to work in the
construction industry. They were being rejected by the employers and if they were found on the
list of the TCA agency (Finkel, 2015). This was seen that many of the workers were on the list
having being accused by the previous employer of being troublemakers or militants. It was seen
that workers who were on the list allege that they were deprived and were not able to fulfil their
livelihood as a result of their inclusions. While also it was seen that the supporters claimed to
have a human rights been breached. This was seen that the users of the report would be able to
stop the workers from being recruited and it also made a fact that it would become difficult for
the construction industry to find new worker who will be willing to work for achieving the
desired goals.
Also their exist a trade union collusion which resulted in a particular relationship between
the HR manager in a particular area and the regional officer of the union. Also the employment
tribunal revealed that in a meeting with various other employers access to work for the members
of another union was declined. This resulted in the a regime in labour force which resulted in
collusion among the members and the construction employers. This also resulted in the police
collusion (Kerdngern and Thanitbenjasith, 2017). After which in a case it was decided that police
had colluded in a blacklist and it was seen that all the special branches were involved in
providing the information on the list. While in the report it was showed that police including the
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special branch and security service supplied the information for blacklisting the workers. Since it
is seen that in the legal settlements Unite continued to seek the compensation for those who use
to denied the work due to the country wise blacklisting. This raised the concern that employment
agencies used to operate their own risk of blacklisting which was considered as the most difficult
task for the people of country who wishes to work for the same. Also in addition to the courts
proceedings this was decided that all the eight firms which were included in blacklist decision
apologised for the actions and agreed to pay compensation to the affected labours. However the
affected workers said that their legal action for the compensation is considered to be continued.
Various settlement were made by where it was founded that around 1 of its members
received a full and final settlement of their compensation which included a total settlement of
Euro 5.6Mn among them.
Hence it is seen that by applying the motivational theories which helps in motivating the
employees through various forms so that they are able to do the work with high performance and
on timely basis. There are various ways of motivating the employees as according to the
motivation theories. The motivation among the employees comes from the needs being fulfilled
by the organisation or the industry.
As per needs theories of motivation this has been found that 'the eagerness to apply large
amounts of exertion toward authoritative objectives, adapted by the exertion's capacity to fulfil
some individual need'. A need in this setting is an interior state that influences certain results to
be appealing. An unsatisfied need makes pressure on the Workers as that drives inside the
person. These drives at that point produce a hunt to discover specific objectives which would
help to fulfil the need and lead to the decrease of the tension. There different methods through
which the needs of the workers can be fulfilled. Some of which includes
 Equity theory: The equity theory which was proposed by John Stacey Adams stated that
the wages and the condition don't determine the motivation alone. This also helps in
giving the factors that if one person is motivated and other is not then it would lead to
bring demotivation among the users (Oesterreich and Teuteberg, 2016). It is seen that the
in the construction industry if the workers are not motivated towards the task that they
perform and are not recognised for their work that they do then it would lead to bring
decline in the construction labour performance. The believe in this form of motivation
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factor is that workers maintain a fair relation so that they are able to bring belief in equity
theory.
 Motivators hygiene factors: This is the theory that is considered as most empirical and
compelling theories related to motivation. In the construction industry this has been the
most important factor as this has been analysed that it is the most dangerous job in the
world due to which most of the people are not indulging in the industry and leaving the
industry. Due to which the crises of performing the given task on time is growing. With
this theory workers can be given a safety precautions which would help them in
achieving the goal on time.
 Expectancy theory of motivation: This is the theory that defines the mental processes
regarding the choice (Oladinrin and Ho, 2016). This looks at the self interest of the
workers which would help in recognising rewards for the people of the industry. This
theory helps the organisation to relate rewards directly to the performance of the workers
in the industry. Hence with the help of this theory it would be easy to motivate the
workers to perform their job more productively.
 Job Characteristics theory: This is based on the idea that the task itself is key to workers
motivation. Job improvement and job movement are the two ways to add variety and
challenge to a job and encourage workplace motivation. It prescribes that, there are five
core occupation characteristics which impact three critical mental states (experienced
meaningfulness, experienced responsibility for outcomes, and knowledge of the actual
results), in turn causing influence in the work outcomes (job satisfaction, absenteeism,
workplace motivation). This helps the construction industry to motivate the workers to
come to job so that they workers are identified according to the task and the skills that
they posses.
Hence, by applying these theories of motivation this would lead help the construction
industry to make any kind of decision so as to increase the productivity and eliminate the
contemporary issues that are prescribed (Parsons, Maclaran and Chatzidakis, 2017). As it is seen
that when the construction industry makes any kind of decision then they must keep every aspect
in mind so that they are able to achieve motivational level among the workers. Also the way of
managing the things in organisation must change as per the situations and this becomes very
difficult for the construction industry to perform their project on time.
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Conclusion
From the above report it has been analysed that there are various issues that are
hampering the construction industry. These problems hampers the industry as the companies are
not able to perform their task on time. Also the workers in the construction industry are not able
to get the security for their job as the companies are using the blacklisting procedure which are
impacting the industry as a whole. This has effected the labour force in large extent. Also if the
managers in the company uses the motivation approach then it would become helpful for them to
increase the performance of the workers so as to achieve the objective of profit maximisation.
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References
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Online
UK construction firms suffer slowdown amid Brexit worries, 2019. Available
through<https://www.theguardian.com/business/2019/jan/03/uk-construction-sector-
ends-2018-on-weak-note-amid-brexit-worries>
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