Skilled Labour Shortage Causes

2.1 Introduction

Workers can recognize as skilled workers only after they obtained accreditation of CIDB (Construction Industry Development Board). In order to obtain accreditation by CIDB, the worker will have to pass the test or courses that will be organized by some authorized bodies, such as ABM (Akademi Binaan Malaysia) and so forth.

The skilled labour shortage problem has been existed in the construction industry since 1970’s. This problem had become serious especially when the construction industry growth up. This problem will then direct or indirectly give rise to many other problems. It is needed to minimize the negative impacts that cause by the skilled labour shortage problem since this problem is the root of other problems.

2.2 Factors of Skilled Labour Shortage Problem

The reasons that caused skilled labour shortage problem listed as below. Those causes are according to the facts that reported in the Master Builders Association Malaysia report and some resources come from online newspapers, online journal and thesis.

2.2 .1 Younger Generation Unwilling to Take Part in Industry

Poor participant from local youth is one of the factors of skilled labour shortage problem (Shiadri binti Salleh@Aman, 2008). According to New Straits Times, the overall of the new intake students, there are only five to eight percent of students who take up skills courses. Compare the developing countries, there is a large difference where could be found between 20 to 25 percent of students enrolling in skills courses (Othman, 2012).

According to Media report from Secretariat of Ministry of Home Affairs (2011) says that, there are about 2.2 percent of total foreign workers registered to work in the construction industry which are 6233 foreign worker (Adam, 2011). The large proportion of imported labour on construction is an evidence of the fact that the Malaysian youths are not interested in joining the industry. According to The Star, there is a ‘three D’ syndrome attached to the industry, which are dirty, dangerous and difficult (Seong, 2010). This makes the construction sector becomes the least attractive sector of the Malaysian population when compared with others.

2.2.2 Wages Problem

CURT (2001) study and pointed to relatively low wages as a major cause for the construction labour shortage. In the construction industry, the skilled labour’s work can be consider as an unstable work especially in term of income. With the indirect unemployement, which allow main contractor or sub-contractor to gain some benefit from it such as they can avoid large expenses on permanent worker and administrative personnel (Shazwani binti Ahmad Zaki, Sarajul Fikri Mohamed, Zakaria Mohd Yusof, 2011). This would lead to the skilled labour will only get pay if they have work for that particular day. Besides that, poor paymaster (MBAM, 2007) is one of the issues in the construction industry. Unfortunately, by the nature of the construction industry itself, it does not ensure that the skilled labour can have continuity of work. Of course, this situation will cause the skilled labours in the construction industry do not have a stable income.

2.2.3 Working Environment

Local people do not interested in the construction industry mainly because of the poor working environment at construction worksites in term of safety and health (Shazwani binti Ahmad Zaki, Sarajul Fikri Mohamed, Zakaria Mohd Yusof, 2011). Moreover, the construction activities often take place at outdoor risky environment that is not safe, healthy and under extremely hot weather. According to the Human Resources Minister Datuk Seri Dr S. Subramaniam, construction sector has the highest number of accidents recorded at work place.

Form to the report of accident in 2012 from Department of Occupational Safety and Health (DOSH), the occupational accidents by the sector for the category of death 2012 shows that, there are 67 victims dead under the construction category (Figure 2.2.3). This is not included for the number of victims under the category of non-permanent disability and permanent disability. Besides that, they believe there are many other accidents were not reported to the department. Most of the accidents on site were contribute by the foreign labour who did not attend formal training. Moreover, this had caused the image of the construction sector become poor and unattractive to the public.

2.2.4 Economy

Economic play an important role in the need for skilled labour. During the rapid development in Malaysian economy in the last decade increased construction project which given the opportunity for people to work (Shazwani binti Ahmad Zaki, Sarajul Fikri Mohamed, Zakaria Mohd Yusof, 2011). According to Mr. Lau Mun Cheong (Secretary General, MBAM) in Master Builders Journal (2nd Quarter 1997), he said that there are a lot of competitions among industries for available workforce and there is an increasing of demand due to the rapid pace of development. This is because during the good time a lot of development will be carrying out at the same time, therefore the need for the skilled labour is definitely be higher. In that time, shortage of skilled labour problem definitely will be happen since we have limited number of skilled labour in Malaysia.

During the economic recession, many skilled labour will switched to other jobs due to the slowdown of the development. Furthermore, during that time the construction industry definitely could not guarantee that the skilled labor can have a stable income. Many of them might migrate to foreign countries that required skilled labour in their construction industries. This situation resulted in loss of skilled labour and thus the shortages problem will happen when the economy is recovering. When the economy is recovering, we may face the difficulty in employing the skilled labor since majority of them are already changing to the other working line or migrate to the other countries. Meaning to say, they already have a better job that can ensure their income and they probably might not want to joint the construction line in Malaysia again. This is because the line cannot give them a good prospect.

2.3 Impacts of Skilled Labour Shortage to the Construction Industry

The skilled labour shortage problem has directly or indirectly brings a lot of negative impacts to the construction industry. Basically, the impacts that brings by the skilled labour shortage problem will lead to the end results of affecting the construction cost and quality. The impacts of skilled labour shortage problem to the construction industry are listed as below. Those impacts are based on the resources from the newspaper, journal, construction companies and etc.

2.3.1 Quality of the Work Affected

Andrew R.J. Dainty, Stephen G. Ison & Geoffrey H. Briscoe (2005) has identified the problem of poor quality of skills as being of a critical importance to the construction industry. Due to the shortage of skilled labour, the contractor may employ the unskilled labours in order for them to continue the works on site. This is due to the contractor needs to complete the project even though they cannot get the skilled labour because delaying the project will lead to payment of the Liquidated Damages. As we know, those unskilled laborers that being employed are not an expert, therefore the quality of the work will definitely be affected.

Gerskup (2010) stated that poor workmanship is one of the factors will contribute to the defective works. According to the Works Minister Datuk Seri S. Samy Vellu said to the SUN newspaper at 23thMay1999, the unavailability of the skilled labour was the main reason behind the shoddy workmanship at the RM195 millions naval recruit-training centre in Tanjung Pengelih. He added that the contractor would need to bear the cost of repairs the shoddy work. When the work produced by the unskilled labour is always facing defects by the consumer, main contractor need to spent extra time and cost for the maintenances of works.

2.3.2 Increase in Construction Cost

In order to attract the skilled workers by raising the wages, this will increase the construction cost (Morley Gunderson, p. 2001). It is a normal case for some resources to be in high cost when the supply is less. Since the skilled labour is also one of the manpower resources, therefore shortage of skilled labour will directly increase the wages and thus bring to the end result of increase the construction cost.

Sometimes this situation will double up the original construction cost for a particular part due to the wrong or bad quality works when it is instruct by the Architect to reconstruct that particular wrong or bad quality works.

2.3.3 Construction Delay

According to research by Wa’el Alaghbari, Mohd. Razali A. Kadir, Azizah Salim and Ernawati stated that, shortage of skilled labour is one of the factors causing delay of building construction project in Malaysia Since skilled labour is one of the important resources that required for the construction industry, therefore lack of them will definitely lead to the slow down of development and construction progress.

The study conducted by Yau (2007) wrote that, labour supply in Malaysia ranked number seven out of twenty eight causes of construction delay. This study shows that the major cause of delay due to the construction industry is employment of illegal foreign labour. Illegal workers will be detained by Malaysia immigration officials and thus lead to delays in construction due to shortage of labour.

2.4 Possible Solution to Overcome the shortage of skilled labour

Personnel in the construction industry should prepare some solutions in order to minimize the negative impacts that caused by the skilled labour shortage problem. They are many types of possible remedy methods for the skilled labour shortage problem. Each of that has different way and also different degree of effectiveness. The possible remedy methods are listed as below:

2.4.1 Updated Construction Method

According to Gruneberg (1997) wrote that with new technology incline to reduce the demand for labour because often new inventions and innovations are labour saving. The productivity will be improved by introducing the advanced technology method compared into the traditional construction method. According The Star at 4 February 2012 wrote that, MBAM suggest the government to reduce the import duty and sales tax for heavy machinery because with the use of new and bigger capacity machinery will increase the productivity and reduce the foreign workers being used.

There are many types of advance technology being used for the construction industry, such as industrial building system. Gruneberg (1997) noted that with the better use of prefabricated components will speed up the construction process and reduce the use of labour. By improving the productivity definitely the manpower resources require will be reduce. This is the reason why these updates the construction method can be say as the remedy method for the skilled labour shortage problem.

2.4.2 Extension Retirement Age

According to The Star 18 September, 2010 wrote that, Mr Chua suggested the government to extend the retirement age of Malaysians. Mr Kwan estimated that seven years from now, there are 35.1% of local construction worker will reach the age of 50. Due to this, Mr Chua would like to point out the retirement age could be raised to 62 or 65 as practiced in some developed country. Retaining the older skilled labour will help a lot in the shortage of skilled labour because they can supervise the younger generation skilled labour and manage to pass their skills to the younger generation in the construction industry.

2.4.2 Recruitment and Retention

According to Smart Market Report wrote that, with better benefits, high salaries and greater job security will attracting new employees and retain the skilled labour. According to The Competitive Position of London (2008), compared to others predominant financial centers, London scored highest in skilled worker availability. This is due to employees at here are highly motivated and willing to work long hour which is they are paid so well. In order to recruit or retention the skilled labour in the market, the employer need to their best to attract them by provide more high salary and better benefit. The study found that skilled labour mostly concern with the pay and job security (Richard L. Tucker, Carl T.Haas, Robert W.Glover, Christine Alemany, Lynn Ann Carley, Ana Maria Rodfriguez & David Shield, P.E, 1993)