Managing multiple forms of employment in the construction sector: implications for HRM

• Author: Stuart D. Green,Stewart Johnstone,Jawwad Z. Raja,Roine Leiringer,Andrew Dainty
• Date: 01 July 2013
• Published date: 01 July 2013
• DOI: http://doi.org/10.1111/j.1748-8583.2012.00202.x

Managing multiple forms of employment in the

construction sector: implications for HRM

Jawwad Z. Raja, Hull University Business School, University of Hull

Stuart D. Green, School of Construction Management and Engineering, University

of Reading

Roine Leiringer, Department of Real Estate and Construction, University of Hong

Kong

Andrew Dainty, Civil and Building Engineering, Loughborough University

Stewart Johnstone, Newcastle University Business School, Newcastle University

Human Resource Management Journal, Vol 23, no 3, 2013, pages 313–328

The construction industry is one of the largest and most complex industrial sectors in the UK. The

industry’s failure to adopt progressive human resource (HR) practices is routinely blamed on the

challenges of operating in a fragmented, project-based environment reliant on subcontracting. This

research examines the extent to which existing HR theory accounts for the particular employment

context of project-based organisations operating in volatile markets. Drawing upon case study research

from two different divisions within a large contracting firm, this article explores the extent to which

different contracting arrangements impinge on attempts to reposition human resource management

(HRM) as a strategic function along the business partnering model. Elevating the role of the HR

function is found to be difficult to reconcile with the concurrent demands of managing multiple forms

of employment arrangements. The research reveals a need for HRM models that account for the

specificities of complex, differentiated organisations that operate in multiple environments.

Contact: Dr Jawwad Z. Raja, Hull University Business School, University of Hull, Cottingham

Road, Hull HU6 7RX, UK. Email: j.raja@hull.ac.ukhrmj_202313..328

INTRODUCTION

Project-based organisations are becoming more common in a variety of sectors and are

attracting increasing attention from researchers (e.g. Midler, 1995; Whittington et al., 1999;

Davies and Hobday, 2005; Söderlund and Bredin, 2006). Despite interest in the challenges

faced by project-based organisations, limited attention has been given to HRM in project-based

environments, and the extent to which this challenges conventional thinking (cf. Söderlund and

Bredin, 2006). The links between an organisation’s project operations and HR practices are

presently not well understood and do not figure highly on the current management agenda

(Bredin and Söderlund, 2006). This article takes as its point of departure the contention that

models derived from centralised homogeneous firms, working in relatively stable

environments, are unsuitable for the complexity of project-based organising; and that there is

a need for a shift in emphasis from viewing firms as homogeneous unitary entities and instead

focus on the challenges of enacting HRM within dynamic environments (cf. Raja et al., 2010).

The construction sector is in many ways the epitome of a project-based industry, and

project-based organisational forms have long been the norm. It is also one of the largest and

most people-reliant sectors, and yet it is repeatedly argued that the industry lags behind other

sectors when it comes to HR policies and practices (Druker and White, 1995; Dainty et al.,

2007a). This is typically attributed to contextual factors that distinguish construction

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doi: 10.1111/j.1748-8583.2012.00202.x

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 23 NO 3, 2013 313

© 2012 John Wiley & Sons Ltd.

Please cite this article in press as: Raja, J.Z., Green, S.D., Leiringer, R., Dainty, A. and Johnstone, S. (2013) ‘Managing multiple forms of

employment in the construction sector: implications for HRM’. Human Resource Management Journal 23: 3, 313–328.

organisations from those operating within more stable environments. These include

fluctuations in demand that encourage large construction firms to focus on numerical flexibility,

and a short-term focus on price often at the expense of longer term employment considerations.

The focus on numerical flexibility translates directly to an extensive reliance on subcontracting,

often limiting the directly employed workforce to a small core of professional managers (Winch,

1998a). Other factors include the geographical and spatial distribution of organisational

operations, and the disparate and transient nature of the workforce; these characteristics can in

themselves be construed to be a product of the short-term project environment (Riley and

Clare-Brown, 2001). Such arguments are widely recognised, but little to date has been made of

the tendency for large construction firms to operate concurrently in multiple markets.

Notwithstanding established debates about the negative influence of short-term project

environments, major clients in both the public and the private sectors have in recent years

sought to establish longer term ‘framework’ agreements with selected contractors. Such

frameworks arguably provide contractors with greater certainly of work, thereby potentially

providing a more conducive context for construction firms to develop and invest in their HR

functions along the ‘business partnering model’ (Ulrich, 1997; Ulrich and Brockbank, 2005). In

this article, we examine the extent to which the new operating context defined by long-term

‘framework agreements’ influences the modernisation of the HR function within construction

firms. In doing so, we shed light on the challenges experienced by HR managers as they seek

to configure their professional identity as ‘business partners’ (cf. Ulrich, 1997; Caldwell, 2003;

Francis and Keegan, 2006; Wright, 2008; Keegan and Francis, 2010; Pritchard, 2010;

McCracken and Heaton, 2012). The article also begins to address the lack of theorising in

terms of the way HRM is shaped and patterned by the increasing prevalence of project-

oriented organisations (see Bredin and Söderlund, 2006; Söderlund and Bredin, 2006;

Huemann et al., 2007).

CONSTRUCTION AS A CONTEXTUAL ARENA FOR STRATEGIC HR PRACTICE

The construction HR landscape

The construction sector’s regressive approach to HRM is widely documented. Studies have

repeatedly contended that the dominant culture of the construction industry emphasises a

model that treats people as a cost that is to be minimised (e.g. Druker and White, 1995; Druker

et al., 1996; Green, 2002), with HRM as a low priority. The construction sector’s supposed failure

when it comes to ‘people issues’ has been a recurring theme of government reports on how to

improve the performance of the industry since the Emmerson Report of 1962, which exhorted

firms to adopt a longer term view to ensure increased stability of employment (Murray and

Langford, 2003). In 1998, the government-sponsored task force led by Sir John Egan concluded

that the UK construction industry is underachieving and that a ‘commitment to people’ is vital

for its future (DETR, 1998: 4). Yet the extent to which institutionally embedded practices may

be reversed through such industry-level ‘attitudinal change’ programme remains debatable (cf.

Ness, 2010).

Rather than lay the blame for retrogressive HR on outmoded attitudes, an alternative

perspective suggests that the sector’s investment in HRM is hampered by a continued reliance

on competitive tendering, which denies contractors certainty regarding continuity of work

(Green and May, 2003) and the extensive utilisation of non-standard forms of employment

(Forde and MacKenzie, 2007), which is arguably necessitated by extreme fluctuations in

workloads that project-based working inevitably engenders. Both of these have acted to

disincentivise investment in progressive HR practices with the sector. Indeed, it is clear that the

Managing multiple forms of employment in construction

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© 2012 John Wiley & Sons Ltd.