SOLD BY: 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;
- To determine the factors responsible for craftsmen turnover.
- To determine the effects of craftsmen turnover on contractors’ performance.
- 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
- 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.
- Craftsman: Also known as an artisan is a skilled manual worker who produces items that may be functionally or aesthetically adequate.
- Employees:A person who works for an organization in return for financial remuneration or other compensation.
- 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.
- Motivation:A drive that initiates the mind of an employee towards a goal oriented
- 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.
- Culture: This is the beliefs, values, behaviour and material objects that constitute a people way of life.
- Cultural Diversity: This is the presence of people of different race, ethnicity, language, nationality, religion, and sexual orientation.
- Productivity: This is the ratio of output to inputs in production; it as an average measure of the effectiveness of production.
- Performance: This is the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost and speed
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