By Jon Davies, CEO, Australian Constructors Association
There are few industries left that have yet to be significantly disrupted and construction is one of them. If we don’t disrupt and address current industry issues, we will run out of workers at a time where we need them the most.
The construction industry, Australia’s third largest industry which contributes eight per cent of GDP and employs one in ten of the working population, has barely changed in 30 years. It has been so slow to change that, according to global consultant McKinsey, only hunting and fishing have a worse track record when it comes to adoption of digital technologies and, not surprisingly, its productivity growth trails behind other significant industries by 25 per cent.
If ever there was ever a time to disrupt the construction industry, it is now. I am not just talking about technological disruption, but disrupting how the industry fundamentally operates, its way of doing things, its relationships – its entire makeup.
We are at a crossroads; we must disrupt or we will slowly die. The construction industry now accounts for a quarter of all insolvencies and that number continues to rise. Our workers are six times more likely to die from suicide than a workplace incident and women make up only 12 per cent of the workforce. People are voting with their feet and leaving the industry just as it faces a shortage of over 100,000 people.
The next generation of workers do not want to work in an industry where disputes are commonplace, excel spreadsheets are considered the height of technology, and little focus is placed on the impact we are having on the environment. If we do not address these issues, we will simply run out of workers.
Increasing productivity, culture and career progression
The time for action is now and the Australian Constructors Association (ACA) is not alone in this thinking. The industry is witnessing a number of positive initiatives such as the Construction Industry Culture Taskforce (a partnership between ACA and the governments of New South Wales and Victoria).
The Taskforce has developed a ground-breaking Culture Standard that addresses the key challenges of worker wellbeing, time for life, diversity and inclusion. Implementation of the Culture Standard, through government procurement, will see the introduction of more flexible work practices, plans initiated to increase female participation rates and reduce gender pay gaps, and programs to support good mental health.
In addition to work aimed at improving the culture of the industry, ACA is also proposing solutions that will see the industry become more productive and better skilled. Through our Partnership for Change initiative with Consult Australia, we have developed solutions to increase productivity through better reliance on tender information, streamlined design reviews and increased adoption of digital technology.
In our discussions with the government on these solutions, we have emphasised the important role that they can play as a model client driving change across the industry. We are also working with Engineers Australia to address the challenges and gaps around career progression and development of construction engineers.
In developing a new Construction Engineer Learning and Development Guide, we are looking to improve consistency in the training and development of engineers across the construction sector and to pave a pathway for construction engineers to be globally recognised in their area of expertise.
Many more collaborations are underway but perhaps the most significant is the National Construction Industry Forum, announced at the Jobs and Skills Summit. This forum is different in that it is a tripartite initiative that will comprise representatives from government, unions and business. Whilst details are still to be agreed, the forum will likely focus on ways to improve industry culture, capability/capacity and productivity.
The unprecedented collaboration and the various initiatives underway are encouraging. They demonstrate the appetite for change but, as I said at the Summit, change will only happen if industry, government and unions leave behind the baggage of history, something that’s easier said than done!
The federal government can be the disruptor
Australia’s construction industry is not unique, but it could be. The current universal agreement on the need for change provides an opportunity to transform our industry to one that represents global best practice and is looked to as a role model by other industries, but we need to act now before this window of opportunity slams shut.
We cannot afford to continue down the path of slow incremental change. We need to fundamentally disrupt how we operate and the Federal Government, if it chooses to, can be the disruptor. Government in general is the nation’s largest infrastructure client. The Federal Government alone has committed a massive $66 billion investment in infrastructure over the next four years, much of which is granted to the states, and yet it imposes few conditions on how that money is spent by the states.
If it chose to, it could encourage the states to procure in a way that maximises productivity, reduces the impact of construction on the environment and unleashes innovation. It could incentivise the states to procure in a way that promotes training and upskilling of the workforce. It could even mandate adoption of initiatives that promote greater participation of women in the industry. The opportunities are endless.
To equip the Federal Government for the role of disrupter, the Australian Constructors Association has developed the Future Australian Infrastructure Rating (FAIR). Essentially, FAIR is a mechanism to rate government funded projects on how well they performed against key reform areas such as improved productivity and increased female participation.
Federally funded projects undertaken by state government delivery agencies would be given a rating that would be published, leading them to strive for increasingly better outcomes for their stakeholders. The FAIR initiative, or components of it, could be included in the next iteration of the National Partnership Agreement as a requirement for all federally funded projects. The time for action is now and we all have a role to play. Get informed, challenge the status quo and together we can make this happen.
