ASSESSMENT OF CRAFTSMEN TURNOVER IN THE CONSTRUCTION INDUSTRY

ASSESSMENT OF CRAFTSMEN TURNOVER IN THE CONSTRUCTION INDUSTRY

(A CASE STUDY OF SELECTED CONSTRUCTION COMPANIES IN LOKOJA)

ABSTRACT

Turnover of construction craftsmen has been shown to have a negative impact on productivity and performance in the construction industry. This study gives an insight on the effects of construction craftsmen turnover in the construction industry. In the study, the main factors responsible for craftsmen turnover, the effect of craftsmen turnover on contractors’ performance and suggestions that will reduce the problem of turnover were determined. Four construction companies in the Lokoja Metropolis were selected by simple random sampling method. A total of 50 questionnaires were distributed between them and 46 of the administered questionnaire was responded to and returned.The data obtained were analysed with statistical tools such as standard deviation, mean and variance.Also pie charts, bar chart, column chart and line chart were used in presenting results. The four-point Likert scale was used to rank factors in order of their importance based on the relative Important Index (R.I.I) of the factors. The result shows that poor payment and benefits, poor treatment of workers and absence of advancement and promotion opportunities are the main cause of turnover while tribal differences and religious differences as regard cultural diversity are the main factors responsible for turnover. The study observed that craftsmen turnover has both direct cost and indirect cost effect on the performance of construction companies. Cost of hiring new employees, training of new workers and replacing old workers was shown to be the main direct cost effect on the performance of a contractor while indirect cost such as Project overtime, additional workload on remaining workers and reduction of project performance are the main effect of indirect cost. The study also shows that the problem of craftsmen turnover can be reduced by paying competitive compensation and benefit packages, fair treatment of workers and reward for dedicated workers are some of the best ways of reducing turnover while fairness, equal opportunity and respect for all and conducive workplace and cultural relation balance are ways of reducing turnover resulting from the cultural diversity of workers. The study also identified that motivation of craftsmen by increasing wages and salaries, promoting committed workers and training of craftsmen can be used to reduce the effect of craftsmen turnover.Based on the findings in this work, appropriate recommendations were being made to reduce craftsmen turnover in the Lokoja metropolis.

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND

            The construction industry is an important sector of the national economy which is responsible for the provision of goods and infrastructures for the comfort of man. According to Ayangade, J.A.,et.al. (2009), the construction industry in Nigeria contributes 16% of the Gross domestic Product and employs about 20% of the working class population.Okongwu, S.E. (2010) explained that the construction industry comprises of different trades and as such provides employment opportunities to the workforce.

            

The production of goods and facilities require the services of construction professionals, craftsmen, artisans,Labourers and suppliers from various trades (Ayangade, J.A,et.al. 2009). To promote a sustainable growth and development, it is very important to invest in skilled workers (Russel, L., 2013). In a situation where economy is declining and the demand for labour is low, turnover cannot be considered as a problem, it can rather be a benediction to individuals, companies and the organization ( Arie, C.G and Erik, H.B, 2013).

            

Turnover within and outside the organization is on rise and it is not the same in all organizations. This was supported by Shamsuzzoha, A.H. (2007) who stated that the rate at which workers leave differs from company to company.However, there are several reasons behind the movement of construction workers; they tend to leave an organization where they are unhappy or not satisfied with Job. According to William, B., et.al (2001), the wages of workers from different organization who perform similar jobs differs, workers that receives competitive pay will have greater tendency to stay compared to workers in other organization who are underpaid.According to Forgarty, et.al (2007),Poor management and indiscipline of individual offices of the organization increase employee turnover. Wei and Chen (2007) stated that it may be as a result of avoidable or unavoidable reasons. Unavoidable turnover of an employee may be as a result of death of an employee or organization policies; i.e Organization retrenchment exercise for workers, while avoidable turnover may be due to employee dissatisfaction on the Job.Tulascz (2001) pointed some of the reasons behind workers’ turnover as discontent with their direct supervisors, Job security, unfilled promises, unpaid bonuses, incompetent Leadership among others.

            

Turnover of construction workers have an adverse effect on performance and productivity, it also reduces the profit realized by a company.Shamsuzzoha, A.H. (2007) explained that employee turnover is one of the factors that affect productivity which is fast becoming a serious concern.Derek (2006) stated that employee turnover directly affects the performance of an organization. This was also supported by the regression analysis of Muhammad, N.,et.al (2013) that employee turnover has a relationship with organization performance. The efficiency and performance of craftsmen is mostly dependenton the management of an organization. In situations where the turnover of skilled workers is high, productivity decreases. Contractors incur costs due toturnover; costs incurred may be cost of replacing, training of new workers and preparation of relevant documents. Training and motivation of workers in the construction industry have been recognized as some of the ways to reduce employee Turnover. Scott, B. (2007) explained that training contributes to the productivity of an organization, increases output which brings about an increase in the employee compensation and benefit packages and subsequently increases the tendency of a worker staying.

            

Since several reasons behind the movement of employees have been identified by various researchers, it is necessary for management of organizations to find appropriate measures to reduce the rate of employee turnover. According to the Wall Street Journal (2004), hiring the right caliber of workers, paying competitive packages and the engagement of employees among others are some of the ways to reduce turnover. The SMEs according to Lisa, H. (2001) stated one of the various concerns that may prevent the implementation of productivity improvement as employee resistance to change. Turnover can be reduced if proper preventive strategies are taken by the management (Shamsuzzoha, A.H, 2007).As a result of the negative impact of turnover on performance and productivity, the Attract and maintain a skilled construction workforce research team (RT 135) was established by the Construction Industry Institute in 2014 to oversee the problem of turnover. Some of the recommendations made to contractors based on their findings are; paying a competitive wage and benefit packages, providing a conducive working environment, treating employees with respect and providing permanent employment opportunities.

  

1.2 STATEMENT OF PROBLEM

Understanding the problems associated with employee turnover and measuring their factors are very significant to the success of an organization. Many researchers have suggested reasons behind the movement of construction workers within and outside the organizationand this have been proved to be incorrect.Labour in the construction industry is an element which is not easy to manage and as such, it is the duty of the employer to ensure that everything is well coordinated and managed. The turnover cost research carried out by the Workforce Stability Institute (2000) explained that it is necessary to recruit and hire the right people to maintain a steady workforce on construction projects.  According to Shamsuzzoha, A.H. (2007), employee turnover is a terrible situation for companies which make the operation of an employer difficult to maintain. Employee turnover cause companies to incur some financial loss which will have direct and indirect cost on the organization ( Morrel, et. al, 2004). Direct cost according to the workforce Stability Institute (2000) are cost that can be determined and monitored which are mostly the prices paid to replace employees who leaves suddenly. Decreases in productivity and employee morale are indirect costs of turnover; they are also very important part of turnover. Hinkin, (2000) stated that indirect cost of turnover leads to decrease in productivity, project overtime and an increase in payment of those that are retained.

            

The construction industry comprises of workers from different cultural background and this is becoming a challenge to the Nigerian construction industry. According to Kimberly, A. (2013), differences in language can lead to misinterpretation of events, backwardness as well as interruption if not properly addressed.

            

Identifying the reasons, effects, and ways of reducing employee turnover will go a long way in enhancing productivity and performance of craftsmen in the Nigerian construction industry.

1.3 JUSTIFICATION

Turnover of craftsmen in the construction industry has received considerable attention from construction professionals and experts because of the setbacks posed on construction projects. Sigma (2005), explained that it is the most difficult challenge faced by an organization and the causes of craftsmen turnover rate is beyond the control of the employing organization. The present economic situation in the country where inflation is on the rise has also led to increase in the prices of construction materials. Consequently, it affects the performance of construction contractors. Craftsmen in the construction industries need to be motivated if the economy of the country must improve since the construction industry contributes to the GDP of the Nigerian economy.

Little attention has been paid to the cultural backgrounds of construction workers in the construction workers which is also a reason for craftsmen turnover. Cultural diversity must be put into consideration when determining the factors responsible for craftsmen turnover, it is important for organizations to determine the ways by which different workers from different cultural backgrounds can be united. Gadgets (2011)explained that some of the challenges faced by a diverse organization are the rate at which workers are leaving.However, there are many benefits from cultural diversity of workers if it is effectively managed.

1.4 RESEARCH QUESTIONS

The study will attempt to answer questions such as:

(i)  What are the factors responsible for craftsmen turnover?

(ii)What are the effects of craftsmen turnover on contractor’s performance?

(iii)  What are the suggestions that will reduce the problem of craftsmen turnover?

1.5 AIM AND OBJECTIVES

1.5.1 Aim

The aim of this study is to assess the effects of craftsmen turnover in the construction industries.

1.5.2 Objectives

The objectives of the study include;

1. To determine the factors responsible for craftsmen turnover.
2. To determine the effects of craftsmen turnover on contractors’ performance.
3. To proffer suggestions that will reduce the problem of craftsmen turnover.

 1.6 SCOPE OF STUDY

Based on the aforementioned objectives of the study, this work will be limited to the construction craftsmen in the construction industries. It will examine craftsmen such as Mason/bricklayers, Iron and steel workers, carpenters, roofers, electricians, plumbers and Painters in selected construction companies in the Lokoja Metropolis.

1.7 DEFINITION OF TERMS

1. Turnover: This is defined as the rate at which employees leave an organization and are replaced or the change or movement of employees within an organization or from one organization to the other.
2. Craftsman: Also known as an artisan is a skilled manual worker who produces items that may be functionally or aesthetically adequate.
3. Employees:A person who works for an organization in return for financial remuneration or other compensation.
4. Employers:A person or an organization that hires employees or workers. They offer wages and salary to the worker in exchange for the worker’ work or labour.
5. Motivation:A drive that initiates the mind of an employee towards a goal oriented
6. Training: The acquisition of knowledge, skills and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies.
7. Culture: This is the beliefs, values, behaviour and material objects that constitute a people way of life.
8. Cultural Diversity: This is the presence of people of different race, ethnicity, language, nationality, religion, and sexual orientation.
9. Productivity: This is the ratio of output to inputs in production; it as an average measure of the effectiveness of production.
10. Performance: This is the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost and speed

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