Why Construction Industry Cannot Be Digitalized? -I- Aging and Talent Gap

2023-01-28 #Digital Generation

You may think digitalization will solve most of the problems of the construction industry. But with the habitual way of working digitalization may never happen. The industry has other crucial problems to be solved first.

The workforce of the industry is aging, both for blue collar hand-labour workers and white colour engineers, architects and other talents. New generation doesn’t want to work for construction industry. Blue collar workmen are another articles issue, for this one let’s start with young architects, engineers, and technicians.

In 2022, civil engineering departments of universities closed enrolment with 35% vacant capacity in Turkiye. Here let me remind, the construction industry has a great share in the country’s economic capacity and Turkiye is awarded with second rank in the ENR list after China. What is more tragical is, I hear many smart young professionals of the industry are looking for other options to transfer to other industries, where they can be respected and paid fairly. My data depends on Turkish construction industry, but I know this is a common problem all over the world.

As I was talking to the young generation within “Happy Construction Community” (young engineers and architects who are interested in agile management approaches to bring happiness to the industry), I asked them, why the industry made them unhappy and what they wanted to change and fix by triggering agile approaches in the industry.

The members, mostly students, recent graduates or young profecionals who are doing postgraduate studies in BIM, lean management and agile management, listed the gangrenous problems of the industry at once:

  • The sector is not open to innovations.
  • Keeping commercial concerns above everything
  • Too much damage to nature
  • Waste is too intense.
  • The passion for engineering has been replaced by craftsmanship.
  • Lack of respect for workers, people, and society
  • Lack of trust
  • Stressful, tense, and chaotic vibe.
  • Continuous pressure in a hierarchical order
  • Promotions are not based on merit, the unfaithful rise of friends-relatives.
  • Unlimited working hours
  • Very low income compared to work intensity.

You might say, oh, what does it matter, it came like this and goes like this. The danger is much greater than we think. According to the report titled “Shaping the Future of Construction” prepared by WEF in 2016-2018, construction companies in the world cannot find suitable employees for more than 50% of the open positions, moreover, this is a valid situation for both blue and white collars.

You may say “How about unemployment rates. There was great number of unemployment!”. Yes, there is unemployment, but there is a rising competence gap between the unemployment and the requirement in fact. The construction sector, which is among the sectors those get the least employee training rates and least interest in organizational development, is far behind in upgrading their existing personnel to the new digital and VUCA world.

Professionals with low competency at the management levels cannot lead and adopt digitalization so show resistance because they are afraid of losing their jobs. Moreover, the project teams come together for once and before they get used to work together they disband. Discontinuity in the organizations and not having a common management culture are two of main barriers of development of the industry.

I'm sure many of us have memories in our professional background, that the software systems, invested in, became unusable because staff continuity could not be ensured. Therefore, it is useful to evaluate digital transformation from a different perspective.

Young generation doesn’t want to work harder and earn less for the jobs where they aren’t respected. They don’t want to get lost in a system (!) where the value flow cannot be followed in dust and soil.

As a result, the construction industry is aging. The number of coming to substitute won’t be sufficient.

For this reason, in order to digitize the construction industry, the industry must prioritize transformation to a place where people can work productively and happily.

The construction companies, either hesitating digital transformation or considering it as an opportunity to reduce employment, should change their perspective at this point.

First of all, going digital is not a goal. So what is the purpose? To produce projects that make its customers and all its stakeholders happy. Digitization is one of the important tools for this, but it is not the top priority. First and foremost, we need the smart young generation in the industry, and a culture of greater transparency and cooperation. Digitalization will create an environment of transparency and simultaneous cooperation. If we remove approval hierarchies and provide an environment where employees can unleash their potential and we create an environment of trust among stakeholders, then we can get a return on our investment in digital transformation. With employee loyalty, we can accumulate data in the digital environment and generate benefits.

While we talk about digital transformation in the construction industry, digital companies focus on employee happiness, revealing employee potential and creating value for customers. Because they realized that commercial success could only come about in this way.

First of all, if we change our management approach, digital transformation will follow, costs will decrease, and quality will increase. Digital transformation will yield meaningful results when middle-aged managers succeed to increase the competencies of their employees and demonstrate a management approach that will enable them to make the right decisions without intervening them. They should consider “servant leadership, instead of micro-management.

As all shareholders of the industry from government to universities, from contractors to site crew we have lots to do, for happy employees, happy customers and value-adding works…

Let's start rebuilding world with smart young organizations


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