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IMPACT OF FOREIGN LABOR INVOLVEMENT ON CONSTRUCTION PRODUCTIVITY IN SRI LANKA

ABSTRACT

The construction industry is a rapidly growing industry worldwide and it is a major industry in Sri Lanka as well. Currently it generates huge income to the country’s economy and contributes to the growth of Sri Lankan economy. However, this industry faces several issues as well. Among those issues, the lack of sufficient and skillful labourforce is the major problem face by Sri Lanka construction industry. This reason negatively impact for the growth of this industry and it directly influence for the Sri Lanka economy. As a solution, most of the contractors try to recruit foreign labor forces to the construction companies. The foreign labor workers salary rate also so very low when compared with the local wage rates. Apart from that the attitude and skills in higher standard that the local labelers. Therefore, recruitment foreign labors are positively impact for the productivity of the construction industry in Sri Lanka. In other hand, it highly influences for the local labor unemployment and local labor discrimination issues as well. These are the negative impact arise from the involvement of foreign labor workers to the local construction ion industry. According to that the involvement of foreign labor forces are positively and negatively impact for the productivity of the construction industry in Sri lank

Key word: Construction Industry, Foreign labor, productivity

INTRODUCTION

The construction industry is places a key role in the economic and physical development in Sri Lanka. As a developing country, Sri Lanka faced huge problems and challenges in the construction industry. Among those challenges the the requirement of necessary labor is identical. As a result, most of the construction companies hired foreign workforce and this migration of foreign workforce is impact for the construction productivity in Sri Lanka.

Industry overview

The current construction industry in Sri Lanka

According to the records of trading economics, the total contribution from construction industry for Sri Lankan gross domestic product is very high in the near past. It records the value of Rest. 200,970 million of revenue in the first quarter of 2017. This a huge improvement when compared the six years back in 2010. From the 2010 the revenue from construction industry is gradually increase due to the new investments. The contribution in 2009 is 8.7% and 2014 it became 9.3% and the second quarter of 2017 the revenue reported a growth of 9.3% when compared to the 2016. According to these records, it is clear that the construction industry is very much important for the economic booming of Sri Lanka.

Foreign Labor involvement in Construction Industry

The sustainability of the construction industry is mainly depending on the resources availability. This industry is requires huge number of resources such as labor, materials, machinery etc. Among those resources, the labor requirement is a vital factor and the labor involvement is impact for the construction productivity. The labor market, which relate to the construction industry is complex and it include several parties as well, organizational management and supervisors, labors, and trade unions. According to the nature of the construction, industry it is highly labor intense industry and it require huge number of workforce for each activities until the construction project is completed.

The large-scale construction companies currently face challenge in shortage of skilled work force. In Sri Lanka, the cost of skilled workforce is little bit higher than other developing counties in Asia. Because of this reason, these construction industries now seek skilled labor professional from foreign countries such as India, Bangladesh and china. As a result presently there are nearly 260,000 foreign workers are currently engage in huge construction projects in Sri Lanka. Hiring expatriate labors from foreign countries. makes positive productivity such as share of skill ,technology and, work more time at hazardous places, bringing new technology and construction methods and demanding low wages (Hamid et al., 2011), However, there are negative impact on productivity by expatriate workforce such as ​ communication problem ,comparatively long learning period , restricted experience, health problems

Research Problem

According to the context, the skilled labor force is very much important for the productivity of construction industry. Because the industry is totally, labor centric when compared with the other industries. However, today Sri Lankan construction industry face huge challenge of lack of skill labors for reasonable cost. Today Sri Lankan construction companies seek foreign work force for this industry due their high skill and low salary rate when compared to the local labor rate. When analysis about the current scenario both native and foreign workforces are together working in construction sites in Sri Lanka. The engagement of foreign labor and its management causes to arise huge number of social and economical problems (Wells, 1996). These social and economical problems highly affect for the productivity of the whole construction projects as well. (Aziz, 2001; Santoso, 2009).This cause to arise attitudes problem, decrease of motivation and other metal issues as well. Therefore, it is important to increase the association between local and foreign labor in the Sri Lankan construction industry in order to assess the consequence of foreign labor on construction productivity.

Aims and objectives

Impact on construction Productivity due recruit expatriate workforce in Sri Lanka is the important aim of this research

Objective of this research are as follows

• Find out the contribution of expatriate workforce in construction industry

• Expatriate workforce impact on construction productivity

• find out the impact of hiring expatriate workforce on construction project in Sri Lanka.

• Recommend well proactive management strategy for impacts caused by expatriate labor on construction productivity in Sri Lanka

Significance of the Study

The research study mainly identifies the impact of foreign labor force to the productivity of construction industry in Sri Lanka. Today construction companies highly target a trend for foreign workers to their labor. However, this is cause to huge number of social and economical problems as well. Therefore, this study provides better understanding of regarding the foreign labor force and their actual impact for the productivity of construction industry in Sri Lanka.

LITERATURE REVIEW

Introduction

The literature review emphasize about the construction industry in Sri Lanka and how foreign labor involvement impact for the productivity of the construction industry. In addition to that the review of literature describe about the social and economical impacts of foreign labor involvement and its influence for the productivity of the construction industry.

Construction industry

The construction industry can be defined as the general and allied construction activities for building and engineering works such as new building work, repairs of existing buildings, creation of prefabricated buildings etc. SIC (2007)

According to the nature of the industry, the construction industry is unique when compared with the other sectors. Because this industry is very complex. Each product has different types of works, the work place also different by project to project, and the types of workers different in nature. Not only that the product types also change according to the requirement of climate Carter, G and Smith, S.D., (2006).

Today the construction industries provide huge contribution for the economy a d development in any country. The identical feature of this industry is, it requires concentrated labor and totally depending on the labor skills (Santosa, 2009). In current situation the labor skills relate to the construction industry, interrelate with the knowledge incentive as well as modern technologies in order to achieve higher productivity Weddikara and Devapriya (2000).

The nature of the construction industry arise so many challenges to the development process of the industry.labour issues and climate fluctuation highly influence for the industry Champ et al., 2011. The major challenge that construction industry faced is recruiting and retaining skilled labor and develop them to increase the productivity of the business. Because the industry is totally depend on the labor forces Rowings et al (1996).The industry’s ability to make contribution toward country’s economy influence by the gap between the supply and demand of skilled workforce Rowings et al ( 1996).

Construction industry in Sri Lanka

The construction industry is one of the key industry sectors in the world economy. Therefore, this industry is hugely contributed for the Sri Lankan economic as well. In Sri Lankan context, the construct industry can be divided in two separate categories namely buildings for commercial requirements and residential purposes, maintainace and renovation activities of existing buildings, roads, highways and bridge construction, water etc. In Sri Lanka, both public and private sector operate construction projects. Construction is dynamic; lead the way and technically related sector in economy of Sri Lanka (Rameezdeen et al., 2008). In addition to that, the construction industry is significantly contributed to the GDP in Sri Lanka. Apart from that, construction industry is faced huge problems and challenges as well (Devapriya, and Weddikara2000).

Among those challenges fallowing are the most identical problems face by Sri Lankan construction industry Silva et al, (2008)

-       Fluctuation of price and quality of material

-       Government rules and regulations

-       Competition from foreign contractors prices and quality

-       Shortage of skill work force and high cost requirements to develop workforce skills.

According to the explanation of Gunawardhana & Jayawardhana (1998), the most of the labor who involve in the construction industry are not permanent worker and they are lack of skills and knowledge due to less training and development facilities. This case hugely affects for the productivity of the Construction industry in Sri Lanka.

Construction labor Force in Sri Lanka

The construction industry is heavily depending on the adequate amount of the skilled labor force. Because of this reason skilled labor shortage in construction industry is highly consider in past few years. According to the recent statistical report the direct employment in construction industry was 562,000 including professional, technical, craft and labor. Among those employees, nearly 97% are male employees who are in the 25-45 age groups. 52 per cent were with experience of less than five years (IMacs Research & Analytics, 2011). However, there is huge shortage in bottom line skilled labors to the construction industry of Sri Lanka Karunathilake, 2006.

Apart from that approximately 80% workforce in construction industry is casual employees and among those, huge number of workers are train via informal traning process and methods. Therefore, the quality of their works is questionable. Not only that nearly half of the work force is dissatisfied due to the low income and lack of security of the job. In addition to than tempary, workers cannot easily find regular jobs as well. When compared with the practices used in USA, UK and other developed countries Sri Lanka also need to adopt more structured approach than existing practices. The use of formal training systems and proper grading of skilled work force are very useful practices that can used to increase the quality of workers Ganesan, (2000). Recruitment, retain workforce and their productivity factors are problem in Sri Lankan construction industry (Jayawardanaand Gunwardana, 1998).further, as per research result foreign contractor competition leads to challenge on construction labor demand in Sri Lanka (Devapriya,Weddikara,2000). Due to recruit expatriate labours on construction projects. Hence, the construction sites became multicultural environment.

Foreign labor involvement of construction industry

Hiring of foreign labors is a common trend use by developed countries especially for construction, manufacturing, agricultural and plantation industry. (Hamid et al., 2011).

Because of this new trends used by the developed countries, the most of the developing countries also use the same system of foreign labor involvement for the above-mentioned sectors. According to the authors review the construction industry is a common industry for labor movement and foreign labour involvement (Fellini et al., 2007; Mselle and Kgaupe, n.d).

According to the author’s viewpoints, the foreign labor involvement for construction industry is very important due to few reasons. Local labors forces are do not like to work in construction industry due to heavy workload, physical demanding and the nature of job is unskilled. (Ive and Gruneberg, 2000 cited at Fellini et al., 2007), the other reason is local workers do not like to shift from one place to another where the construction site is operate (Champ et al., 2011). Construction industry mainly depends on the hard work of work force. However, the local labors are not hardworking, so the involvement of foreign labor is very much important to increase the productivity (Chan and Kaka, 2007). Construction industry having split production process and split process make construction industry for labor relocation, as single production easily can be done, foreign companies or very small companies usually employing foreign workers, either regular or irregular, either authorized or unauthorized (Fellini et al., 2007)

Low wages and productivity of foreign labor

Employee wages and allowances are very much important for the productivity and the motivation of them to work hard. Local employees requires high payment for hardworking such as construction labor jobs. However, when compared to the wages rates with local labor rates ii can identify that foreign labor rates are very lower than locals (Ponnusamy, 2011).This is identical in the labor rates of china, India and Bangladesh. The construction labor who come from these countries are hardly work and their productivity is in maximum level and the same time the wage rates also very low then locals ((Ponnusamy, 2011).).Thus the recruit of foreign labor force is the very productive way to cut down the cost of construction project and the same time it not harm the productivity as well (Kazaz and Ulubeyli (2007). In addition to that, the local workforces have high bargaining power against the contractor. Due to that, the contractors cannot easily reduce or change wage rates of the work force and if they take action to reduce wages it badly affect for the productivity of the construction project. So foreign labors are viewed as a main source that reduces the collective bargaining power of locals to improve their wages and working conditions (Possusamy, 2011).The argument here is the low wages of employees in constructing industry impact for different ways for the productivity.

Attitudes towards works of foreign labors

The positive attitudes toward hard working help to increase the motivation level of the labors. According to the authors, viewpoints the foreign labors have positive attitudes for hard working than the local labors. Aziz, (2011) identifies that few advantages that have in the foreign labors due to their positive attitudes. Foreign labors are wiliness to work extra hours and they wiliness to work risky and dangerous conditions as well. They face any difficult situation without any fear. They request low waged compared to the locals and lack of carefulness. Apart from the Ponnusamy, (2011) explain his opinion that foreign labors are hardworking compared to the locals. Moreover, the foreign workers have one focus when they are working. They put their effort and fully focus on the organization and been serious. Because they migrate to another country for one reason that is, fulfill their job responsibilities. These attitudes of the foreign labor motivate them to hard work on behalf of the company (Pajares, 2008).the argument here is the attitudes toward work of labour face negatively and positively impact for the productivity in construction industry.

Industry relation between local foreign workers

Technology and the share of skill between locals and foreign employees have a positive impact on productivity (Hamid et al., 2011). Further, it has been argued that the use of migrant labor did not have negative effects to the general industrial relations in the CI, thus it will not affect the productivity of the industry (Aziz, 2011).But the argument here is less relationship also can be positively influence for the productivity.

Issues arise from foreign labour involvement

According the the explanations of author the foreign labours are hard working, they are willing to work and required low wages, they do not request about any additional befits. Due to this reasons so many local contractors are highly target for foreign labours for their construction projects. Due this the local workers are avoid by the contractors, as result the degree of unemployment of local workers increases (Brown et al 2004). Employers feel more delightful having foreign workers working for them and that result in local workers not being selected for the job. This highly influences for the balance of job market and the competiveness of job market is highly increase and local workers are threatening due to this case.

Another issue is that locals are being disadvantaged and discriminated in their rewards system. Local workers are in danger by foreign workers due to low necessarily of payment, quality of work, and other fringe benefit Schneider, K. ed., (2009)

Conclusion

According description the the construction industry is very important sector for economic growth of any nation and the growth of this industry also heavily influence for the Sri Lanka economic as well. Today most of the countries face several difficulties, which relate to this industry. Among those difficulties, the lack of sufficient labour force is identical feature. So most of the counties recruit foreign labors to fulfill the gap of labor requirements and it is positively and negatively impact for the productivity of the construction industry in Sri Lanka.

METHODOLOGY

This chapter is mainly interpreted about the conceptual framework of the study, research approach, and selected strategy used by the researcher and finally data collection methods, instruments and techniques fallowed by the researcher.

Conceptual Framework Figure 3.1 – Research Conceptual Framework

Research Strategy

The research strategy can be divided in to two main categories such as qualitative research strategy and quantitative research strategy. According to the research context, the quantitative research strategy is most suitable one to identify the impact of foreign labor involvements for the construction industry in Sri Lanka. Apart from that, the quantitative strategy is easiest way conduct the research with the time constraint. Under the quantitative research strategy, the survey researches and experimental research techniques are used.

Data collection techniques

Generally, researches use two types of data collections methods in order to collect necessary data for the research namely primary data collection method and secondary data collection methods. This researcher used both primary and secondary data collection techniques to identify suitable data to find out the realistic outcome.

As primary data collection techniques, the researcher used questioner survey. The questioner covers the objective of the research study. These questioners mainly distribute among the Sri Lankan conctactors.because they are the people who work with foreign workers and they have good knowledge regarding their outcome. In addition to the questioner survey, the researcher used pilot survey and conducted few interview with industry players to get results that are more important.

The secondary data techniques used by the researcher are review of literature of articles, books, and web sites importation, which relates to the construction industry and foreign labor forces.

Sampling Techniques

The target population is the building contractors and project contractors in Sri Lanka. Because they are the owners of particular projects and they are the person who select foreign workers to their construction works. Therefore, they have good knowledge regarding their skills and productivity. Among this population, the researcher is going to select … No of contractor as the sample. The questioner is distributing among those selected sample in order to collect required details. The selected sampling technique used by the researcher is probability-sampling technique. In here every respondents have equal chance to be in a selected sample. Apart from that, the simple random sampling approach is used to select sample from the selected population. The respondent in the selected population group has equal chance to be a member of the selected sample profile.

Data analysis

The proper data analysis is very much important to get realistic outcome. The analysis of data reveals the information regarding the hidden behavior and correlation of the selected independent and dependent variables. The summarizing of collected data generates more important aspects to the research out come. The researcher used SPSS software and Microsoft excels software to analysis the collected data. The analysis data are represented by sing date tables, charts and by using other statistical techniques.

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