Project Management Risks in Construction with a Lack of Skilled Resources

Lit Review

– Identify the risks involved for a project manager throughout the construction phases due to lack of skilled resources

Throughout the construction process there are many different risks involved. Throughout the planning process these must be identified before the actual implementation of a project. If not, these can lead to problems throughout the implementation phase and closeout.

The first stage in risk management is to think about the risks that your project might suffer (Lock, 2004) but in order to do this a project manager must identify the planning process. When there is a lack of planning, poor preconstruction preparation, poor communication and teamwork skills along with weak contract administration are some of the main reasons problems occur within a construction project. (Project Management Institute, 2016)

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When planning a project within the construction industry the literature refers to a common practise used as Front End Loading. Front end loading can also be referred to the pre-planning phase within a project. The process takes place early in the project lifecycle. It is at this point that risks can be identified which in turn  According to the Construction Industry Development Board (CIDB) (2016) the adoption of a robust front-end loading is crucial to the successful delivery of any project. (Construction Industry Development Board).

When considering the overall effect on a project during the conceptual and planning stages, front end loading helps project owners predict future risks.  With this they can allocate risk while controlling the project’s value chain. A forward-thinking organisation aims for a balance between risk allocation and value retention. (Render)

Many projects share common risk factors within construction. A project manager must take these into account when identifying the resources needed throughout the project lifecycle.

These include:

Uniqueness: Each construction project is unique. A project may be built on different terrains leading to new and innovative logistics to bring material to site.  This could mean resourcing specific skills in order to get material to a certain location.

Complexity: The fact that each project is unique means it brings its own set of complexities. A firm could be building a one-off house, an architecturally designed skyscraper of restoring a 500-year-old castle. Each project requires certain resources to meet the critical success factors set out.

Assumptions and constraints: According to (Hillson, 2009), project scoping involves making a range of guesses about the future, which usually include both assumptions (things we think will or will not happen) and constraints (things we are told to do or not do). Assumptions and constraints may turn out to be wrong, and it is also likely that some will remain hidden or undisclosed. This mostly happens within renovation works, excavations or restoration projects due to one assuming what can not be seen through undemolished walls, unexcavated soil or behind veneers on the exterior of a building.

People: All projects involve people. With this comes a certain element of risk. For a project manager it could mean individuals not performing within their roles hence effecting the project schedule or budget while it could also mean not finding the skilled resources needed to complete a project.

Stakeholders: Stakeholders can be broken into two different categories, direct (primary) and indirect (secondary) stakeholders. The primary group are directly involved within the project and these include project managers, engineers, trades or financial service providers, investors and many more. While the secondary stakeholders group covers all those indirectly associated with the project. These include internal managers of the organization and support staff not directly involved in the project including the HR department, accounts department, secretariat, senior management levels not directly responsible for the project. A sub-section of indirect stakeholders is those representing the regulatory authorities such as national and local government, public utilities, licensing and inspecting organizations, technical institutions, professional bodies, and personal interest groups such as stockholders, labour unions and pressure groups. (Lester, 2007)

The main risks identified when dealing with both direct and indirect stakeholders is the presence of both positive and negative stakeholders. The positive stakeholders thrive towards project success by ensuring the schedule, budget and quality are all met. These would be more directed at direct stakeholders. Negative stakeholders would usually cause issues throughout a project. These could include the public objecting to certain aspects of a project or government bodies outlining certain conditions for a project.

Change: Projects are subject to change throughout its lifecycle. This could be due to unforeseen costs, union strikes, lack of skilled resources or economic downturns. Moving from the known present into the future makes cause for concern and all project managers and their team can do is try and predict these changes before they happen.

With all these risks comes a direct correlation between resource management and the actual risks involves with a project. For example, if there is a current lack of skilled labor such as trades it will have a knock-on effect on the iron triangle within project management. (see fig 1)

Fig 1. The Iron Triangle

Changes that may be needed due to lack of skilled resources:

Scope: It is difficult and expensive to change a projects scope once it has been agreed on by stakeholders. It is crucial to determine and clarify the deliverables of the scope before the project phase moves on, because it integrates with other knowledge area processes (PMI, 2013)this also means that whenever there is a change in the project scope planning there will be changes in other key areas. An example of this could be a design change due to costs of labor due to lack of supply.

Cost: A change in scope will have a direct impact on the cost of a project. However, if a scope does not change costs can still fluctuate within a project. Often costings within a project rely on data from previous types of work. In projects, standard costs are typically used in cost estimates, budgets and for subsequent cost collection (from timesheets and material stores issue requisitions). This eliminates the need to consider day-to- day fluctuations in materials prices or salary differences between individual staff of the same trade or professional discipline. (Turner, 2007) The problem with this is it does not allow for economic factors. Material prices often change due to tariffs on goods while a lack of skilled personnel may cause costs to rise as people realise the added value they bring, resulting in an overspend.

Time: If there is a problem finding skilled resources then the project timeline can be affected. Rather then resource loading a schedule before a project begins a project manager should try and schedule their resources well in advance with appropriate lead times.

Quality:

-          Risk in planning – Think about risk within construction

-          Actual implementation (planning process)

-          Discover the major implications on the delivery of construction projects due to the demand of key personnel worldwide

Delivery and success (10 critical success factors) pintos 7 1980

What are the key success factors – Iron triangle – Five of the 10 Pmbok

-          Why this current shortage of skilled resources has occurred and what recommendations can be made to improve its current status

Why is there a skilled shortage?

• Vocational training – training
• Transition year – trades for transition year
• Education- introduce a trade program within
• Hr
• Implement pm in schools?
• Junior achievement Ireland – what is like link in better with education system/guidance councillors

References

• Construction Industry Development Board, C. I. (n.d.). CHALLENGES OF FRONT-END LOADING IN CONSTRUCTION PROJECT DELIVERY. Faculty of Engineering and the Built Environment, University of Johannesburg.
• Hillson, D. (2009). Managing Risk in Projects – David Hillson.
• Lester, A. (2007). Project Management Planning and Control (Fifth Edition).
• Lock, D. (2004). Project Management in Construction.
• Project Management Institute. (2016). Construction extension to the PMBOK guide.
• Render, D. C. (n.d.). The Benefits of Good FEL (Front-End Loading).