Civil Engineering Reference
In-Depth Information
European Union, there are more than 3 million contractors - employing 15 million
people. Construction accounts for nearly 10 per cent of the total employment in
Europe. Much of this labour works in small enterprises. Small firms dominate the
industry for two main reasons:
•
they can supply services which do not suit the nature of large firms, such as
repair and maintenance
•
they can supply labour on a subcontract basis to large firms.
Labour-only Subcontractors
It is common practice throughout Europe for the majority of work carried out on
a construction site to be done by subcontractors. In addition, subcontractors often
organise the materials and maintain the equipment. To the main contractor, labour-
only subcontracting is the cheap and efficient option, as the self-employed worker
is not entitled to holiday pay, redundancy money, sick leave, pension rights or any
other benefits that accrue to permanent members of staff.
As a result of this tradition, a high level of fragmentation is often associated
with the European construction industry. After being in post for six months a UK
construction minister once remarked in an interview that in terms of meeting all
the trade associations he was only half way down the alphabet. The interviewer
sarcastically added that 'by the time he gets to Z he'll probably have moved on
to his next job' (Broughton 2001). In fact it is estimated that there are more than
500 separate trade associations representing different groups of UK construction
workers (Wolstenholme 2009: 22). This characteristic fragmentation leads to many
of the industry's recognised strengths and weaknesses.
WEAKNESSES
There is a recognised lack of collaboration within construction teams. This, in turn,
often leads to a lack of trust between the various parties and explains the adversarial
nature that typifies the relationships. Another weakness of fragmentation is the
lack of commitment to education, training, research and safety on site. It is often
suggested that subcontractors do not seem to learn from one project to the next - a
common myth is that each building is regarded as a 'prototype'. The general level
of tension between contractors and subcontractors was interestingly captured
at the start of the recession in 2008, as the first thing that the larger contractors
chose to do to protect their business was streamline their supply chains and cut back
on the number of specialist subcontractors they used. For example, Wates cut its
suppliers list from 4,000 to 500 and Costains was equally drastic with a cut from
18,000 to 2,500. To justify their actions the directors of these large organisations
used derogatory phrases such as 'we will drop “white van man” in favour of bigger
companies', 'we will weed out the small “fly-by-night” organisations as we seek
to work with fewer quality subcontractors' and 'our aim is to be responsible for
between 10 and 25 per cent of a subcontractor's work - [we want] to assure that
our position (as the main contractor) is important to them, but not too important!'
(McMeeken 2008). Furthermore, to compound the nature of this problematic
