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FactorsInfluenceLabourProductivityandtheImpactsonConstructionIndustry

ARTICLE·MARCH2013

1AUTHOR:

SitiHafizanHassan

UniversitiTeknologiMara(PulauPinang)

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Caspian Journal of Applied Sciences Research, 2(AICCE'12 & GIZ' 12), pp. 349-354, 2013

Available online at http://www.cjasr.com

ISSN: 2251-9114, ©2012 CJASR

349

AWAM International Conference on Civil Engineering & Geohazard Information Zonation

Factors Influence Labour Productivity and the Impacts on Construction

Industry

Nurulzatushima Abdul Karim

1, SitiHafizan Hassan

2, JuzailahNur Yunus

3, MohamadZain Hashim

4

1Lecturer, UniversitiTeknologi MARA Pulau Pinang: nurulzatushima@ppinang.uitm.edu.my

2Lecturer, UniversitiTeknologi MARA Pulau Pinang: ct_hassan@yahoo.com

3Lecturer, UniversitiTeknologi MARA Pulau Pinang: juzailah.nur@ ppinang.uitm.edu.my

4Lecturer, UniversitiTeknologi MARA Pulau Pinang: mzain.hashim@ ppinang.uitm.edu.my

The construction industry plays an important role in any developing country. This sector will promote the

infrastructure required in socioeconomic development which also a major contributor to the overall economic

growth. One of the main factors that had influence in the construction industry growth is productivity which

mainly associated with the labor performance. Labor in construction industry could be defined as all workforces

involve in the process that had to carry out to accomplish and to achieve goal. The labor productivity

insufficiency will affect the performance of the overall project. This study was carried out to identify the factor

that influences the labour productivity in construction industry and to identify the impacts of labour

productivity in construction. The study is focused on experienced company which is involved in construction and

listed in Pusat Khidmat Kontraktor (PKK). The method adopted was by distributing 100 set of questionnaire to

respondents from contractor Class A until Class C which is listed in PKK and there were only 37 responses

received. The analysis done showed that project management skill was the most important factor that affects the

labour productivity. The positive impact influenced by labour was technology exploration meanwhile project

delay is the negative impacts influenced by productivity of labour in construction industry. By identifying the

factors influencing labour productivity and the impacts in construction, this can help the construction players to

improve the productivity and project performance.

Keyword: labour productivity, factors influence labour productivity, impacts of labour productivity

1. INTRODUCTION

Productivity has been generally defined as the ratio

of outputs to inputs. Construction projects are

mostly labour based with basic hand tools and

equipment, as labour costs comprise 30 % to 50 %

of overall projects cost. Therefore, while numerous

construction labour productivity research studies

have been undertaken, only a few have addressed

the productivity issue in developing countries

factors affecting productivity in the construction.

Productivity in economics refers to measures of

output from production processes, per unit of

input. Productivity may be conceived of as a

measure of the technical or engineering efficiency

of production (Saari, 2006).

There are many factors that influence the

productivity in construction industry. Labour

productivity is one of the most important factors

that affect the physical progress of any

construction project. Construction labourers are

responsible to operate a variety of equipment. To

perform their jobs effectively, construction

labourers must be familiar with the duties of other

craft workers and with the materials, tools, and

machinery they use.

In Malaysia, one of the greatest challenging

faced by the construction industry is to attract and

to attain skilled labour. Low productivity among

the labour will give impacts to the construction

industry such as cost overruns and schedule delays.

Besides that the foreigner labour which is

estimated to constitute 70% of the construction

workforce were reported to be involved in such

social problem, lack of skill and communication

problem. In order to expand the economic growth

and to compete globally, the construction industry

has to continuously improving the standards of

construction especially regarding quality of labour

performance because productivity is part of a key

performance indicator to determine the success of

the project.

Methods for improving construction

productivity among the workers are not possible

without identifying factors that influence

productivity among them. Therefore there are

Abdul Karim et al.

Factors Influence Labour Productivity and the Impacts on Construction Industry

350

important to study about the labour productivity

because this is important factor that contributes to

the productivity which is affected the reputation of

the Malaysian construction industry.

1.1. Factors Influencing the Labour

Productivity in Construction Industry

There are some factors that affect the productivity

of labour in construction industry: (1) Project

Uniqueness; (2) Technology exploration; (3)

Project Management skill; (4) Labour

Organization; (5) Real wage trends; (6) Skill and

development.

Projects in construction are never designed or

built exactly in the same manner as previous

projects due to environmental factors such as the

landscape, weather and physical location and also

aesthetic factors. Project uniqueness requires

modifications in the construction processes where

workers are required to go through a learning curve

at the beginning stages of each project activity

(Tucker et al., 1999).

According to Tucker et al., 1999, lack of

technical and managerial skills is often identified

as one of the major problems of contractors in

developing countries resulting in poor

competitiveness with their well developed and

industrialized counterparts. Technology has a

tremendous effect on overall productivity. Tools

and machinery have increased both in power and

complexity.

Management complicates progress in

productivity within the construction industry. Past

studies found that poor management was

responsible for over half of the time wasted on a

job site. Good management is required for

profitability and success (Tucker et al., 1999). Toor

and Ofori, 2007 have identified that labour morale

is also affected by extensive numbers of changes.

Cross-training and multiskilling can reduce unit

labour costs (Burleson, 1997). Contracts that create

flexible work rules on the job site promise

productivity benefits as well. Barriers between

trades have historically been a source of problems

in construction. Reduction in the percent of the

workforce comprised of organized labour and

improved project agreements with remaining

construction labour organizations have reduced

this problem (Tucker et al., 1999).

Low wages for construction jobs, for instance

very few local labours want to work in

construction industry. Based on studies conducted

by Construction Industry Development Board

(CIDB), the average wage rate in 2007 was RM

70.00 per day for skilled workers and RM 51.00

per day for semi-skilled. An increasing percentage

of open and merit shop work partially drove this

downward trend. Additionally, total compensation

rates may compare with other industries even less

favourably than wage rates suggest, since

construction industry work is have retired, and

younger entrants to the labour pool increasingly

choose career paths other than construction,

creating a skilled labour shortage which is

plaguing the industry.

Based on the research done by Ofori (1991),

training for construction industry in developing

countries is generally contributed to the

performance and effectiveness of both employer

and employees. Training is essential to developing

countries because effective manpower planning

and development plays a crucial role in support of

a flexible and dynamic labour force coping with

the fast technology transfer and industrial growth.

1.2. Impacts of Labour Productivity in

Construction Work

The construction process results in relatively high

costs and labour becomes a more important input

in the production phase. Moreover, the labour cost

is somewhere between 20% and 50% of the total

project cost and reduction of these costs can be

best carried out by the productivity improvement.

At the same time, the success of a construction

company in today’s competitive market largely

depends on accurate estimation of productivity,

and a reasonably correct assessment of the labour

cost is fundamental to the accuracy of any estimate

might be obtained. In addition, the effect of the

factors on productivity may vary from task to task.

Although some factors could have similar

influences on the productivity of a number of

tasks, their rate of impact on productivity may be

different (Kazaz and Ulubeyli, 2003).

There are some ways to overcome the bad

impacts of labour productivity in construction

industry:

(1)increasing skills and experience of

workforce; (2) good management in construction

work; (3) improve motivation among the labour;

(4) reduce the lack of material availability; (5)

decrease the number of foreign labour.

2. MATERIALS AND METHODS

To capture the perception of construction players, a

questionnaire survey was conducted. The

questionnaire is divided into two parts, the first

Caspian Journal of Applied Sciences Research, 2(AICCE'12 & GIZ' 12), pp. 349-354, 2013

351

part requires respondents to provide their personal

particulars including the status of the company,

class of contractor, respondent position, respondent

involvement in construction industry, company

involvement in the construction industry and also

types of contracting activities that the company

involved while the second part focuses on the term

of labour, countries of foreign labour in

companies, factors related to labour productivity in

construction industry, impacts of labour

productivity, management issues that related to

labour productivity and improve the productivity

among the labour.

The questionnaires were sent to the

construction companies who have experience in

construction industry within the list provided by

PKK. Hundred set of questionnaire had distributed

during this research.

Microsoft Excel for Microsoft Professional

Windows XP and SPSS were used to analyses data

collected. The technique of descriptive statistics

was used to describe and make sense of the data.

The data of the analysis focuses on the

interpretation of the output to make predictions

which lead to findings and discussion. The results

of analysis were presented in table and graphical

chart.

There are some assumptions in this study which

refer to difficulties involving the respondents such

as: (1) the ability and readiness knowledge of

respondents to answer the questionnaire. (2) The

questionnaires were sent to the wrong address and

not arrived in time. (3) Respondents are not

interested and cannot give fully cooperate.

3. RESULTS AND DISCUSSION

3.1. Respondents and company background

In the first part of the fieldwork, a total of 100

survey questionnaire was distributed, 37 valid

replies were received from bumiputera and non –

bumiputera contractors, which represents a

response rate of 37% of all questionnaires sent.

Intended for 91.89% of the respondents were

Bumiputera Company followed by only 8.11%

non-bumiputera Company. The large number set of

questionnaire were distributed to the bumiputera

company rather than non- bumi. Table 3.1 shows

the percentage of three classes of contractor

registered with PKK that act as respondent. The

results show the ability or readiness of respondents

is differing from one class to another class. This

also refers to their willingness to answer the

questionnaire which contractor Class A has given

the highest feedback.

Table 3.2 shows the percentage of respondents’

position in the company while Table 3.3 shows the

percentage of year of respondents’ involvement in

construction industry. The fact that they were

senior personnel rendered further validity to the

survey results and most of the respondents had

more than 4 years of relevant experience.

Table 3.1: Analysis on Class of Contractor

Class of contractor Respondent Percentages (%)

Class A 16 43.24

Class B 12 32.43

Class C 9 24.32

Table 3.2: Analysis of Respondent’s Position in The Company

Position Number of Respondents

N

Percentage

%

Chief Executive Officer 4 10.81

Project Manager 11 29.73

Assistance Project Manager 7 18.92

Project Engineer 4 10.81

Site Engineer 6 16.22

Supervisor 2 5.41

Safety Officer 0 0.00

Others 3 8.11

Abdul Karim et al.

Factors Influence Labour Productivity and the Impacts on Construction Industry

352

Table 3.3: Analysis on Respondents’ Year of Involvement in Construction Industry

Year of Involvement Number of Respondents

N

Percentage

%

Less than 3 year 6 16.22

4 to 10 years 16 43.24

11 to 15 years 10 27.03

More than 10 years 5 13.51

3.2. The opinions on the factor that affect

labour productivity in construction

The next results were determined using mean value

data based on the following rating scale:

(1=Strongly Disagree 2=Disagree 3=Natural

4=Agree 5=Strongly Agree)

Mean is a technique to compute the strength of

index familiarity, frequencies and agreements of

specific question. The collected data were analysed

using mean index which is used specifically for the

ordinal scale measurement. The mean index can be

computed by using the SPSS.

All the key factors related to the labour

productivity construction were calculated and

arranged based on the indicate mean response and

whichever values that indicating near to the 1 will

be considered as the highest entry modes decision

of mean response. The mean response for mean

Value was allocated as the following with the

rating scale as below:

1.00 ≤ Mean < 1.50 (Strongly disagree)

1.50 ≤ Mean < 2.50 (Disagree)

2.50 ≤ Mean < 3.50 (Neutral)

3.50 ≤ Mean < 4.50 (Agree)

4.50 ≤ Mean < 5.00 (Strongly agree)

Table 3.4 shows level of agreement for the

factors affecting the productivity of labour in

construction. Analysis shows that all respondents

were agree with the factors listed.

Project management skill was the most

important factor that affects labour productivity in

the construction industry where they deal with

time, money, equipment, technology, people and

materials in managing a construction project.

Proper management will make the labour work

more systematically and more motivation among

them.

Meanwhile, tools and machinery are also

important in influencing labour productivity in a

construction project. Advancement in technology

can significantly modify skill requirements.

Exploration and application of technology will

increase the skill and experienced to the labour

about the machinery, tools and equipment.

Expertise in technology will improve the

productivity among the labour and also will give

good performance of the project.

The other factors agreed by respondents which

would affect labour productivity are skill and

training, project uniqueness and labour

organization. More skill and experience among the

labour will increase the productivity. In addition,

skill will also help the labour to be more confident

when doing their job and at the same time they can

share to each other to increase the productivity. For

a construction project, uniqueness refers to the

environmental factors such as weather and physical

location. This factor is important because a good

condition on workplace can avoid the risk of

accident on site. If the safety and health is high, the

productivity of labour also will increase. Besides

that, contracts that create flexible work rules on the

job site promise productivity benefits.

Data showed that the lowest factor that

influenced the labour productivity is real wage

trends. Basically, the wages of labour depend on

their skill and experience in construction work.

The contractors normally try to minimize the wage

of labour in order to maximize their profit. But, the

reality if the labour get good wages, they are

willing to work hard and at the same time will

increase the productivity.

3.2. Impacts of labour productivity in

construction

From the analysis shown in the Table 3.5, all

respondents were strongly agree that with the

application of new technology in construction

would give positive impacts to labour productivity

where the labours will be trained to the new

technology and this will increase skills among

them. In the other hand, the respondents agree that

low labour productivity will give negative impacts

to the project which is delay in project

development. Low in labour productivity indicates

that there are no proper project management,

Caspian Journal of Applied Sciences Research, 2(AICCE'12 & GIZ' 12), pp. 349-354, 2013

353

Table 3.4: Mean Response for Factors Related to the Productivity of Labour in Construction Industry Factors that influence the labour productivity Mean Value Classification Rank

Project management skill 4.51 Strongly Agree 1

Expand the technology 4.08 Agree 2

Skill and training 3.95 Agree 3

Labour organization 3.78 Agree 4

Project uniqueness 3.62 Agree 5

Real wage trends 3.51 Agree 6

Table 3.5: Mean response for factors that can related as the impact of labour productivity in construction

industry Impacts of labour productivity Mean value Classification Rank

Application new technology by labour can

increase productivity

4.11 Strongly Agree 1

Low labour productivity can causes project delay 4.05 Agree 2

material shortage and other problems in that

particular project.

4. CONCLUSION

The productivity growth in the construction

industry may have considerable effects on the

economic development and stability. Project

management skills were acceptable as the most

important factor that influenced the productivity

among the labour a part of the other factors such as

technology exploration, skill and training, labour

organization, project uniqueness and wage trends.

Project management skill is a major factors

influence the labour productivity. So that, proper

planning is really need to make sure that the

project completed successfully. The project

manager should train themselves to be more

leadership, more innovative, and creative. As a

good leader, they should being a good role model

to their employees. Try to make good relationship

between employee and employer.

The impacts on labour productivity was

identified where it is strongly agree that

technology exploration will increase the

productivity while low labour productivity will

cause delaying of project. Explorations of new

technology or transfer technology are very

essential to develop better performance of project

in line with globalization in construction industry.

Company can send their labour to other develop

country to learn more about the technology from

them. Hence, the new technology knowledge and

skills can be shared and fully practiced in our

country and consequently our construction industry

players would compete globally.

The significant drawn from this study could be

used by the project managers to take into account

of these factors at an early stage. Consequently, it

can increase the productivity of the project besides

minimising the time and cost overrun.

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