GENEVA (ILO News) - Decades of flexible labour market policies have had such a profound impact on income, conditions of work and employment security in the construction sector that the industry is having great difficulty attracting new recruits, according to a report * prepared for an International Labour Office (ILO) meeting (10-15 December 2001) of industry experts.
The report cites "evidence from various parts of the world to indicate that construction workers do not view their employment in a very favourable light: construction is regarded almost everywhere as a low status job".
These perceptions risk deepening an industry-wide image problem that is aggravating recruitment, undermining skills and training and increasing dependance on part-time workers, including ethnic minorities, women and migrants, to fill construction jobs.
The construction workforce in some West European countries is "aging and retirements are not being offset by new recruits," the report says. The situation is similar in the United States where "the wage advantage that construction workers have traditionally enjoyed over other industries (and which was needed to keep them in the industry) has steadily eroded over the last 20 years, leading to a leakage of skilled workers from the industry and difficulty replacing them".
In some developing countries, construction is among the fastest growing areas of the labour market and continues to provide a traditional point of entry for less educated workers, but it is often an occupation of necessity rather than choice. In some markets, the prevalence of archaic labour practices, outdoor work and temporary and casual labour leads many people to shun construction work, leaving it to recent migrants from the countryside or to foreign workers and their children.
While the poor image of construction jobs is often thought to stem from the traditionally "dirty, difficult and dangerous" nature of the work, the ILO analysis says that "the real reason why construction work is so poorly regarded has much more to do with the terms on which labour is recruited than the nature of the work itself".
In particular, the "outsourcing" of labour (in which the construction workforce is recruited through subcontractors and other intermediaries) has made work in construction increasingly temporary and insecure, while often having a profound effect on occupational safety and health, wages, training and the level of skills, which has fallen in some countries.
The report notes that, in many developing countries, "the practice of recruiting labour through subcontractors and intermediaries is long established, accounting for as much as 80-90 per cent of the workforce". In some industrialized countries, where direct employment of construction workers by contractors was the norm as recently as the 1970s, employment practices "are now rapidly approaching those of the developing countries".
The growth in the practice of outsourcing labour has allowed large companies to effectively divorce themselves from the physical work of construction and concentrate on service functions: "The large enterprises which are responsible for a significant share of construction output are increasingly removed from the construction site and construction workers. The subcontractors and labour contractors who are now the main employers of the construction workforce are small, sometimes very small firms."
In Europe these trends are most apparent in Spain and the UK. In Spain 61 per cent of the country's 1.5 million construction workers held temporary contracts in 1999 (compared with 32 per cent in the economy as a whole) and the industry is currently having difficulties recruiting new workers, especially better qualified young people, with employers increasingly obliged to look to "continued inflows of migrant workers from North Africa, Latin America and Eastern Europe".
In Britain, the report identifies problems of recruitment among young, male workers (the traditional recruitment ground) which are forcing a drive to recruit from alternative sections of the community - women and ethnic minorities. Most UK firms rely on nominally self-employed labour, with the percentage of self-employed workers in construction doubling from 30 to 60 per cent of the workforce between the mid 1970s and 1995. Surveys of building sites have found as many as five tiers of subcontracting in the labour chain.
Even in Germany, where the construction labour market is still governed by a dense network of domestic regulations, the system is under intense pressure as a result of the outsourcing of work to foreign contractors who are not subject to the collective agreements, as well as to the fragility of the regulatory system in eastern Germany. The number of German companies employing more than 500 people has shrunk from about 130 four decades ago to only 50 today. In Germany, France and Finland, only about 25 per cent of construction workers are employed in firms with more than 100 employees.
The trend is also apparent in the US where the share of the construction labour force employed by general contractors fell from 35 per cent in 1967 to only 24 per cent in 1997. By the late 1990, around two thirds of the workforce was employed by special trade contractors.
More than three-quarters of the approximately $3,000 billion output of the world construction industry is concentrated in the high-income countries of Western Europe, North America, Japan and Australia, although these countries are home to only about one-quarter of the world's 111 million construction workers.
According to the report: "The high income countries (including the US, Japan and the larger West European economies) produce 77 per cent of global construction output with 26 per cent of total employment. The rest of the world produces only 23 per cent of output but has 74 per cent of employment."
The ILO report concludes that the trends identified are unlikely to be dramatically reversed and "the big issue facing the sector is how to raise the image of the industry and make work in construction more attractive to young people".
Delegates to the tripartite meeting to be held at ILO headquarters in Geneva from December 10 to 15 are expected to discuss ways of ensuring that temporary workers and workers employed by subcontractors enjoy the same level of labour rights, social protection and access to training as permanent and directly employed workers.
* " The construction industry in the twenty-first century: Its image, employment prospects and skill requirements", International Labour Office, Geneva, ISBN 92-2-112622-6. Price: 15 Swiss francs.