Big Project ME examines the recruitment process for the construction industry, right from hiring the right engineers for a project, to recruiting thousands of labourers from South-East Asian countries. Jonathon Savill reports
A 2013 Deloitte report on construction points out that: ‘The challenges that Middle East businesses have had to understand, analyse, manage and overcome in the past few years is, quite simply, unprecedented.’
Certainly the optimism engendered by another new business dawn has got worn. But at last the recovery seems to be happening and new projects are entering the field, even certain zombie projects are awakening and slumbering back to life.
According to Khaled Alkharrat of bayt.com, business has never been healthier. They have around eleven million job seekers on their database and roughly four thousand companies who trawl their database to offer jobs. But the crucial statistic he mentions is that 12,800 new job seekers are joining the site every single day.
And of course new construction will engender new supply issues. What was overstocked and available a year ago can easily become an acute shortage without warning. This magazine has recently carried reports of trucks in Saudi queuing for five days for cement. Certainly no infrastructure of supply could address the boom and bust of recent times with any sense of equanimity.
Construction is a triumvirate of materials, equipment and manpower. Manpower is a funny thing. You always have too little or too much and it is never exactly right. It is a difficult combination if you are looking for local talent but for construction companies it could be a huge problem.
Part of the matrix is the division of labour – literally. On the one hand you are looking for a few specific skills within one of the engineering disciplines and on the other you are looking for massive numbers of labourers. There is not just a need for feet on the ground, you must provide the infrastructure to support them.
There is a cost element too. At the moment much of the rest of the world is still in depression, especially in Europe. But if there is a glut of new projects then the supply of labour could be affected. There will probably never be a shortage of unskilled labour as such, but if demand rises then lazy recruiters will simply pay more and thus affect the market cost of this commodity.
The problem starts right from finding the manpower. We in the Middle East are lucky because we have the developing world right on our doorstep. Traditionally Dubai has been built by workers from India, Pakistan, Bangladesh and the Philippines. But now recruiters are casting the net further afield in an attempt to fulfil their quotas.
Once you have found your staff you have to transport them to site. This can be a problem and contractors have sometimes been forced to charter planes to get labourers into the country.
There is also the outside regulatory influence on labour. GCC countries will soon pass a law regulating foreign labour in the Gulf countries, including returning marginal and unskilled foreign workers to their home countries, a Gulf official claims.
“There are responsible parties at the council looking for a mechanism to verify whether or not the expat worker does have the skill for which he was brought to the Gulf,” the official tells local media. “The council will also attempt to eliminate workers who claim skills they do not possess.”
Fawzi Al Majdali, secretary general of the programme for restructuring labour in Kuwait, says new regulations will minimise unused labourers with no clear contracts with their employers.
“Kuwait has recently said that it will cut down and send away 100,000 expat workers who are considered marginal, in order to replace them with local labour,” he asserts.
This is a problem. A recent academic report points out: “Less encouraging are the kinds of jobs created. In general, Middle Eastern countries have not made the dynamic shifts that occurred, for instance, in Ireland in the 1990s, where the sectors with the highest productivity gains also produced relatively more jobs, leading to rapid growth, declining long-term unemployment, and rising standards of living.
“By contrast, job growth from construction and public works is mainly cyclical and does not provide sustainable and high-quality jobs over the longer term. People working in such jobs are not likely to be more successful in joining the conventional labour market than before, risking a return to the pool of unemployed after the job ends.”
The Middle East is a strange economy. More than half the population is expatriate, but there are unemployed locals. There is a strong movement to employ more locals but there is still a throwaway culture for low level manual jobs.
The dependence on expatriate labour has skewed the countries demographics; Emirati nationals account for about 20% of the population.
This has created an imbalanced population composition in favour of males; in 1997, there were 1,755,000 males and 869,000 females in Dubai.
This immigrant cycle has happened in Britain several times; Jamaicans were brought in and then replaced by Indians, for example. Britain has a long history of importing immigrant labour but then commits to them. The Middle East doesn’t. It is a straight barter, the immigrant comes, works and then leaves. In the case of skilled people it is an understood deal. The skilled worker comes here, earns above the going rate, saves and retires. In the case of unskilled labour it is less of a choice for hundreds of thousands of poor uneducated immigrant workers.
While there are thousands of workers who are fed, accommodated and are able to return home better off than if they had stayed there, the Human Rights Watch 2013 report claims that migrant workers often face hardship during their stay.
“Research in countries such as Bahrain and the UAE has documented many migrant workers suffer serious abuses after being placed in overseas employment by these agencies and many are deliberately misled about the conditions they can expect in their new jobs,” says the report.
Then there is the further problem of conflict between different nationalities and communities. One construction site boss recently told Big Project ME that he had problems with fighting between his Nepalese workers and his Bangladeshi workers. He partially cure it by making sure that where there was a Bangladeshi in charge then his number two was always Nepalese, and vice versa.
Jim Freeman is the boss of Freeman Consultants. He thinks that the Dubai market is recovering but it will take five years to get back to where it was during the boom. He thinks it will take that long for projects like Falcon City to be completed and thus open up the market.
There is a set of statistics to determine need for a project. Software, regional experience and a tiny bit of guesswork all allow the contractor to estimate the resources and thus the time that a specific project might take.
One advantage for consultants needing labour is that they may be able to borrow labourers from other large contractors. They will reduce their labour force but because labour is cheap they will keep an excess.
Freeman thinks that it would be possible to borrow three hundred or so for up to a year. He also points out that accommodation for the sub-continent workforce has improved beyond measure: “It’s not just tin shacks any more. Now its custom built concrete buildings.”
“Right now it’s a seller’s market. Construction is buoyant right round the world and professionals are apt to travel.”
Freeman doesn’t think the Middle Eastern culture is conducive to employees feeling secure: “There is a shorter job cycle in here, it’s been that way for quite a while. If and when an engineer joins a project there is a fair chance that the management company could get sacked by the client and then the engineer could find himself made redundant.”
“There is a shortage of good commercial professionals at the moment. We need more quantity surveyors. We are looking for twenty four of them right now.”
Freeman explains the way he finds people: “We don’t just advertise. We look at companies that may be struggling and approach their staff.”
It seems then that Dubai may find itself competing at both ends of the labour supply spectrum.
According to Freeman: “Right now Hong Kong is very vibrant for construction. And in the very near future Doha is starting work on the trains and of course the football projects are kicking in.”
Even the Eurozone, embattled as it is will still be continuously building new projects for infrastructure, he points out.
But Dubai’s ambitious announcements will not be curtailed by reality, it’s just that future big visions may be tempered by a higher labour bill and even a possible shortage of skills at the very top end of the construction business.