CRITICAL SUCCESS FACTORS OF LABOUR-INTENSIVE SUBCONTRACTORS IN SA: AN EASTERN CAPE STUDY

Massyn & Crafford

IntroductionLiterature Review

• Labour-intensive (LI) subcontractors• Critical success factors (CSFs)• Employment and labour-intensive

constructionResearch Methodology Findings

• Critical success factors• Implementation of critical success factors

ConclusionsRecommendationsQuestions

Agenda

Unemployment in South Africa

Addressing Unemployment• Government initiatives• Labour-intensive construction

The construction industry’s role• Perception• Support

Objectives• Critical success factors• Non-implementation

Introduction

Labour-Intensive Construction• Labour ratio compared to other resources• Economically efficient employment of as

great a proportion of labour

Labour-intensive subcontractors• Utilise manual labour to accomplish

trade-specific construction operations• Trades of operation

Labour-intensive Subcontractors

Traditional Success Factors

CostProjects completed within the allocated budget for the project

TimeProjects completed within the specified construction period

QualityProjects completed to the

specified quality

Critical Success Factors

Scale of projects

completed

Environmental performance

Project Procurement

Market conditions

Adoption of new

technologies

Staff moraleQuality System

Number of projects

completed

Growth in revenue

Staff performance

Relationship with

stakeholders

Payment method

Insurance terms

Company history

Staff trainingReputationProfitInterest ratesCompany

management system

Timely completion of

projects

Safety performance

Programme/ Planning

Management-level

leadership

Employee growth

Cash flowCash flow Growth in revenue

Staff morale

Relationship with

stakeholders

Staff performance

Profit

Management-level

leadership

Programme/ Planning

Timely completion of

projects

Critical Success Factors

Infrastructure EconomicDevelopment Tool

Major Advantages• Economic growth• Employment opportunities

Other Benefits• Access to electricity• Expanded health facilities• Port development• Proper roads• Improved water and sanitation facilities

Employment & LI Construction

Expanded Publics Works Programme• Create employment by promoting the use of

labour-intensive construction methods in infrastructure development

Employment & LI Construction

First Phase of the EPWP (2004-2009)• Objective of first phase ONE MILLION JOBS• Conclusions from the first phase

- Beneficiaries - Enforcement of LI construction methods- Budget

Employment & LI Construction

Quantitative research method• Objectively measure each variable

Population and Sampling• Site foreman and supervisors in the EC• Random sampling

Questionnaire Design• Demographics• Critical success factors• Perception• Non-implementation• Pilot study

Research Methodology

Questionnaire Administration• Hand delivered to various sites in the EC• Assistance provided where required

Analysis of Results• Manually captured in Excel• Ranking• Descriptive statistics – mean, mode, standard

deviation and skewness

Research Methodology

Table 1.1 Success Factor RankingsRank Success Factor Mean Standard

DeviationMean

Evaluation1 Timely completion 4.69 0.47 EI2 Programme/ Planning 4.59 0.50 EI3 Safety performance 4.41 0.61 EI4 Profit 4.38 0.55 EI5 Quality system 4.34 0.60 EI

21 Market conditions 3.53 1.02 I22 Environmental performance 3.50 0.76 I23 Interest rates 3.50 0.95 I24 Payment method 3.34 0.94 SI25 Employee growth 3.28 0.89 SI

Findings (CSFs)

Note: EI=Extremely Important; I=Important; SI=Somewhat Important

Rank Success Factor Mean Standard Deviation

Mean Evaluation

1 Focused on short-term profits 4.28 0.63 Always2 Cash flow 3.91 0.69 Often3 Time constraints 3.66 0.83 Often4 Experience 3.50 1.02 Often5 Disregard long-term establishment 3.47 0.76 Often6 Training 3.44 0.95 Often7 Education 3.41 0.80 Often8 Awareness of CSFs 3.29 1.01 Sometimes9 Lack of resources 3.22 0.71 Sometimes

Table 1.2. Reasons for Non-Implementation of the CSFs

Findings (Non-implementation)

Critical success factors- Timely completion of projects- Programme/Planning- Avoid penalties

Non-implementation of CSFs- Financial (Focused on short-term profits & Cash

flow)- Overcoming this problem- Benefits

Conclusions

Labour-Intensive Subcontractors- Implement CSFs into operations- Improve managerial, financial and LI specific

aspects of operations

Government Initiatives - Create awareness of CSFs- Monitor and maintain level of labour-intensity- Principles to be followed

Construction Industry - Support labour-intensive programmes- Train and develop emerging subcontractors

Recommendations

QUESTIONSANY

Questions