Local Labour In The Construction Industry

Local parturiency In The bend assiduityChapter 11.0 IntroductionMalaysia is now experiencing a refreshing era of prosperity. The political relation invented and implemented a series of five year development plans and laid the foundation for the development in the solid ground. Since the 60s, Malaysias parsimoniousness grew rapidly and some(prenominal) cheats were occasiond in the face persistence. In the early of 90s, Malaysia is facing get of parturiency and there was a deficit of wear upon in the manufacturing industries. The labor movement shortage then expanded to the facial expression exertion.The economic growth in the past two decade has guide to a lofty standard of living which in addition contri furthered to the local anesthetics remonstrance to the 3D (dirty, demean valueing and grievous) sectors, which were eventu excepty filled up by un complete outside(prenominal) p determinations. Malaysia is alike human action on contrary spurters, curiously in our services sedulousness or 3D industry.This doesnt contri ande much to our parsimoniousness as most of the income aimd by these crapers argon channelled back to their home countries but non use in Malaysia. This also mean there argon high cash outflow.The government postulate hostile workers as a chinchy source of repel that could enhance the countrys export competitiveness had been load-bearing(a) the deployment of contrasted dig up in the 1990s.Prof Datuk Dr Mohamed Ariff of the Malaysian Institute of Economic Research believes that if Malaysia had non every(prenominal)owed the enormous influx of conflicting workers, local manufacturers would get down been forced to innovate and automate to boost productivity to mention their competitiveness. (Kok, 2011)The governments effort in reducing the countrys dependence on low- masterly abroad workers has been ongoing, as evidenced in the tardy reduction in the number of registered foreign workers ove r the last two years. The bum is to geld the number of foreign workers to 1.5 million by 2015.Many economists feel that what Malaysia call for is skilled or highly skilled workers, not cheap, amateur foreign workers. (Alan Ting, 2008)1.1 Problem StatementMany foreign workers site nowadays acquire to a greater extent and more(prenominal), as they have a big group, they starting to cause a mass of line, especially mixer and security problems. Recently from The Star News (20th June 2007), happened that a group of foreigner involved in fights, widespread break-ins and drug pushing have become a common sight at Klang. check to Ahmad, 1996. To avoid these problem happened, Contractor should take over local workers, but local workers argon not kindle to undertake the social organization works. Contractors argue that they no enormouser could find local workers giveing to work in twist industry because the salaries argon low. Besides, braid industry is absorbed by local as 3 Ds job which mean Dirty, Dangerous and Difficult job.Local youth nowadays has slight(prenominal) interest to work in the twirl industry. This bum make a motion the speed of development in construction industry. The indicate that local custody is not interested on this sector is they think that the job is dirty, dangerous and difficult to face. on that pointfore it outlets the industry atomic number 18 forced to postulate foreign workers to keep the industry develop. (Shiadri Binti Saleh, 2008)Secondly, the group of foreign workers hired by the industry basically fumbling, so contractor or his assistant need to tutor and advice the foreign workers while constructing building.(P. Larcher, 2001)Besides, the unskilled and problematic workers forget not only cause delay in project completion but also cause s bumt(p) whole step of works which is not meeting the industrys skill standard. (Bachan Singh, 2011)Nowadays, construction companies argon l light uping to pay low pay off often results in lamentable workmanship, which set up both the woodland of the products being produced, as well as the communitys overall reputation. low gear-cost labour can translate into unskilled labour, and in order to remain competitive in todays global market, companies must keep pace with the more or less-the-clock advances in technology. (Amber Keefer, 2012)Poor workmanship of foreign labour can cause defects. According to Kurt Arnold, defects are from ridiculous workmanship devalue property and can lead to additional damage to structures and materials. Poor workmanship is ofttimes the root cause of construction defects. Even eccentric building products, if installed or used incorrectly, it may cheat on to effectively serve their intended purposes or last as long as they are designed to last.Due to Local young have less interest on construction industry, CIDB is working substantial to attract more local skilled workers. The implementation of accredit skilled workers system was to maintain a high standard workforce. These workers will get higher salaries than normal labourers.1.3 AimTo study the factor that led to the pathetic participation of local labour in the construction industry.1.4 ObjectivesTo identify the advantage and disadvantage of poor participation of local labour in the construction industry.To determine the factors that led to the poor participation of local labour in the construction industry.To find out the strategies to improve the participation of local labour in the construction industry.1.5 S deal of StudyFirstly, the questionnaire will be set out with astir(predicate) 30 questions and target to send out 100 sets.Then, the respondents that I am aiming is Contractor of Malaysia. To get a contractor which is easier to look up and can give more information, it would be Class A contractors . Class A contractors are elect because the job scope of them are precise wide (such as largely on root word) and the worker o r labour require by them are a lot. So we can get information about what kind of labour he is using( local or foreign) and the reason they choose the type of workers.I will find contractor class A at KL area, because mostly the infrastructure project will be having there. such as MRT project. Kuala Lumpur is a high developing area. So, there are much more infrastructure need to be completed by contractor class A.After collecting the selective information, then data will be analyzed by using statistical method to ease us par and conclude the result. Finally, conclusion and recommendation can be make from the overall data collected and questionnaire.1.6 The methodology flow chartSelected Topic of StudyStatement of ProblemsDetermine the Critical FactorsDetermine the Advantage and loss of Local brayConclusion Recommendation / suggestionData AnalysisQuestionnaireDetermine the strategy of advantageData CollectionLiterature Re bewitchDefine Objectives1.7 Significant of StudyThe stud y of the topic is generally to identify the factor that lead to poor participation of local worker in construction industry, add up by the causes and the solution to attract more local people to the construction industry.This is great because factor can tell us that the problem and why the young today are not interested on construction industry. Next, we can know causes of the lack of participation of local people in construction industry. Such as, it can cause the industry over depending on foreign worker. Thus over hire foreign worker can cause a lot of thing to happen, such as, heathen pollution, social problem and even outflow of Malaysias money. After all of these are identified, then we can find some solutions to stay or get down happening of these.Besides, from this study, it enable me to learn more about device industry of Malaysia and the important of the support from local workforce.CHAPTER 22.1 IntroductionIn this chapter, we are discussing factors of puzzle out t he local labour less interested to work in construction industry. The thing to be discuss is related to delineation of a person, economy of country , outsourcing of labour through sub-contractor system, lack of cultivation and skill formation, large number of foreign workers, poor site accommodations and services and change in upbringing.2.1.1 Skilled LabourAccording to Investopedia, skilled labour is defined as a segment of the workforce with a high skill level that creates solid economic value through the work performed (humad capital). Skilled labour is generally characterised by high program line or expertise levels and high wages. Skilled labour involves complicated tasks that require specific skill sets, education, reproduction and experience, and may involve abstract thinking.2.1.2 Semi-Skilled Labour base on the expla pastoral area from World English Dictionary, it says that semi-skilled labour is party skilled or machinateed but not sufficiently to perform specializ ed work. Semi-skilled worker need some skills to do work but does not require doing the complex work.2.1.3 Unskilled LabourInvestopedia explained that a segment of the work force associated with a low skill level or a limited economic value for the work performed (human capital). Unskilled labour is generally characterised by low education levels and low wages. Work that requires no specific education or experience is often available to workers who let on into the unskilled labour.2.2 Construction in the Eyes of Local Workforce.Evidence from different place of the world place that construction workers do not view thier workplace in a very favorable light. Construction is viewed by almost everywhere as a low status job. In many another(prenominal) countries, either rich or poor, people work in construction out of necessity and not out of choice. Almost universally they wish for better things for their next generation. (ILO,2001)In construction industry, a lot of workers with diff erent level such as skilled labour, semi-skilled and unskilled labour. But most of the people view construction industry as dirty job as well as dangerous jobs. rough even said the construction industry is unattractive job. (Nazib Faizal, 2012)In Malaysia, young workforce would rather fired than work in the construction industry. Official estimates put foreign labours at 80% of the entire construction workforce in 1992 (Abdul Aziz, 2001)2.3 The Factors of Local Workforce Less Interested in Construction2.3.1 Poor run across in the Eyes of WorkforceLocal young generation workforce has a poor view to construction industry. They just thought that the nature of work of construction is dirty, difficult and dangerous. But the real reason why construction work is so poorly regarded has much more to do with the term on which labour is recruited than the nature itself. For many construction workers slightly the world the term of employment have eternally been poor (ILO,2001)In Malaysia, accidents on construction sites always happened. Such as, sometimes we can hear or saw the news about site accident due to nature disaster(soil erosion) that caused workers seriously injured or even dead.Accidents on Construction sites are too common that everyone has come to accept them as an necessary characteristic of the industry. This spotlight is attribute to the casual terms of employment, the commitment of il good foreign workers and the non-coverage of workers under nation policy scheme (Abdul Aziz,1995)Next, reason of Malaysian are not willing to take up this job because it is danger to personal safety by construction work. Statistics from the social Security Organisation (SOCSO) showed that on the average, 5,000 accidents occurred in construction sites annually amidst 2000 and 2004. This figure stands about 5% to 6.5% of the total number of accident inform over the period. An average of 80 workers was killed in such accidents (Fong Chan Onn, 2006)Based on the inspect ion which conducted by division of Safety and Health (DOSH), they found out that the major factor of accidents happened at site is contributed by lack of awareness on safety and health. They rate the safety and health of the construction site is not save the satisfaction. Besides, often, workers are not comply with the rules and regulations of safety and health at the sites. This can cause much more serious injury or even depth happen.During accidents happen at the construction site, the workers are not only the one who injured, but also may cause injured or death to the public. So, all of these accidents had spoiled the image of construction industry.2.3.2 Lack of Training and Skill FormationIn construction industry, young, ameliorate and experience workers are hard to find. This is because nowadays, young workforce has less experience and low skill. This is contributed by when they are in college or university, school provide less practical to them instead of theory. Even thoug h students are provide to industrial training, but they cannot learn so much due to few reasons. Firstly, industrial training period is too short which they cannot manage to learn everything. Secondly is, the senior are unable to satiate trainees work as they are inexperience. Seniors worry that trainees work, so they do not dare to give plodding duty to trainee. Thirdly, Senior workers are too busy with their work which caused they have no time to teach the trainee. All of these are contribute to poor skill of young generation.In Malaysia, the problem that often spy is the passing of skills through informal apprenticeship is often kept within family, clan or tribe and when circumstances dictate that skills should be transferred to outsiders they may be some dilution, with not all skilled passed on (Abdul Aziz,2001)For Malaysian, they always change company when they are offered with higher salary. So, the company has to hire new workers and re-train them. Training workers are very costly and time consuming. So when contractor is bidding for a project, he might raise the determine of their bids which could make the contractor unable to compete with others.2.3.3 Unattractive JobsThe other reason of local young workforces are not attracted by this job is because there are already a lot of foreign workers doing this job. The image of this job is already spoiled by the foreign because foreigners are normally with low skills and poor educational background. So, local young workforce might think that they were hired as unskilled and low education, therefore, they do not want to be look down by other friends and parents. This caused the local refused to join construction industry. As the result, construction industry need to hire more foreign workers to keep moving forward.In Malaysia, official estimates put foreign labours at 80% of entire construction workforce in 1992 (Abdul Aziz,2001)This situation again will cause the entire construction industry lack of local workers.2.3.4 Poor point Accommodations and ServicesIn Malaysias construction industry, contractor has a common practice which is providing temporary accommodation on the site for workers to stay. The temporary accommodation is usually made up from timber and zinc. This type of accommodation was less conducive to most of the Malaysian Workers. This is also one of the reason why Malaysian workers are shying remote from the construction sector and consider employment in the construction sector as not ennoble enough (CIDB News, 2009)Besides, the services and facilities at sites provided by some contractors are not unplayful enough.2.3.5 Low compensationIn Malaysia, the salary for site labour are consider low. Because in construction industry, they hired too many foreign workers which is pay in very low rate. But Local workforce are requesting higher salary. In this case, contractor would rather hire foreign workers as they accept low salary.As for the demand in high salary, local workers were lured overseas country such as Singapore, Taiwan and Japan. There is where they were paid a much more higher salary based on their skills. This is the reason of our construction industry relied on foreign work force.2.3.5.1 Factors Influenced The Labour Salary(1) LocationLocation can influence the salary of labour. For the place such as city area that has more projects especially infrastructure project, the need of labour are higher compared to rural area which have less project. Since the city area has higher living standard, the amount of money used per day also high. So for the city labour, local workforce cannot accept such low salary offered in construction industry in city area. Unlike, rural area labour can accept low salary, because their living standard are start which do not need high salary.(2) Competition among the contractorsContractors receive a project by tendering, to win a tender, their tender pricing must more reasonable low. Normally, Client would l ike to have a lower cost project. So, for the contractor to able to compete with others, they will firstly lower their construction cost by reducing labours salary.(3) Risky ProjectFor every project, there is risk in between. For larger project or higher building, the risk will be higher since it face to more technical machinery and higher history level when workers are doing their work. Such as higher building need higher scaffolding, therefore it is more dangerous when it goes higher. So to prevent contractor from losing more money from accident, contractor therefore buy insurance to cover the workers.Beside, contractor need high skilled workers to handle a much more dangerous situation. High skilled workers are much more expensive compared to unskilled or semi skilled workers. All of these are affecting the cost of labour and cost of construction.(4) Labours MarketFor most of the local labour cannot fulfill domestic demands such as the working duration, not durable under sunligh t, and stamina is not that good. Thus government allow foreign labour to be imported to fulfill the demand of constrcution industry. This is because foreign labour such as Indonesian, they are more durable under the sun and have good stamina and importantly they can accept low wages. In this situation, foreign labour wage is much lower than the local labours, thus many contractor take foreign worker to strangle their wages expenses.2.4 Advantages and Disadvantages of Poor Participation of Local Labour2.4.1 Advantages of Poor Participation of Local LabourIn modern years, there has been a big problem that the foreign workers have caused economic problems in Malaysia. However, it is not to slump the positive impacts of foreign labour on economic issues. Assuming that there are many problems the evidences, (Chan Moha, 1998) indicated that there are also direct and positive impacts of the foreign workers.The foreign workers have benefited in the income development. unconnected worke rs were vastly beneficial to the economy. This shows the positive quantitative contribution of foreign workers to Malaysians economic growth. The implications of foreign workers on the Malaysian economy have been immense especially since the late 1980s (Zehadul et al, 1999)Wage structure is one of the significant role in maintaining lower wage levels. This also indicated Sidney (1996), foreign labour offer an endless stream of cheap labour that can keep wages low and growth high.Generally speaking, foreign workers contribute to the economy by supplying a cheaper labour force. As a matter of fact, foreign workers usually receive a lower salary than local workers and the difference can help to maintain the decrease in production cost.As stated by Oleg (2002) that the attracting cheap workforce means cutting production costs, consequently the production cost for construction development is kept low which is an advantage in the foreign workers.Malaysia, which have seriously shortages of workforce in construction industry, by importation of foreign workers could minimize the workforce shortage problem. The supply of this additional labour force fulfilled the urgent demand for labour which could not be met so quickly and at a cheaper rateHere, importantly the foreign workers accepted those jobs which are jilted by the local workers especially the construction jobs that known as 3Ds job. Moreover, if we assume that the foreign workers are every bit productive as the local workers, one can safely say that foreign workers make crystalize positive contributions.It has already been brought to our notice that the value added of dollar spent on labour in Malaysia is around 5 times in the manufacturing sector (Ghosh, 1998). If this is true, then there are sufficient positive value-added effects of foreign workers in the Malaysia economy.2.4.2 Disadvantages of Poor Participation of Local Labour2.4.2.1 Hiring Foreign Labour in Construction Industry and The ImpactsPoor par ticipation of local labour can caused the contractor is being forced to hire foreign labour. Generally, local people tend to feel that foreign workers are contributing problems in the country and economy.Malaysia Construction industry firms were experiencing various problems due to foreign labour. Recently, the problem of foreign labour in construction industry is as followa) Cultural PollutionMost foreign workers are peaceful. They want to earn money to send homeland for their family. In most cases, concern over foreign labour is conjugate to anxieties over what some have characterised as cultural pollution and over foreignisation (Weiner, 1990).They may change the cultural and social orders of the normal practice of the locals in construction industry.b) Social ProblemLegal and illegal foreign labour also contribute to many social problems and make the impacts on the locals. They create many social problems like spread of diseases, theft, robbery, cheating, killings, illegal sett lement and so on. They form syndicates. If there are no syndicates, legal and illegal immigrants cannot arrive in Malaysia.According to Tey (1997), as shown by unpublised police records at the police home plate in Bukit Aman, between 1985 and 1991, foreign labour accounted for between 14.7% and 18.2% of all murders commited in the country. The figure for gang roberry was between 32.7% to 48.2%.c) Economic IssuesThe foreign workers have an impact on the wage structure, labour market, competition with locals. Another perceive bad impact is the high remittances sent out by foreign workers to their home countries.Foreign workers also thought to be responsible for the higher rate of inflation because of their increased demand. They enjoy public goods without nonrecreational taxes and user fees. As such they become free-riders in the Malaysia economy. They are ensured health and other facilities with free.However it cannot be rejected that the use of temporary foreign labour enables th e rapidly growing economics and societies to fulfill hands needs in dead-end, low status, low wage sectors of the economy such as construction sectors (Zehadulet al, 1999).d) Low Wages for Local Workers and Taking jobs away from LocalsWomens Workers Association President Silam Hassan (2004) Claimed the problem of foreign workers stemmed from the Governments devote policy which drew large numbers of outsiders to the extent that local workers had compete with them for jobs. As a result of the inflow of foreign workers in the construction industry, the wage rate for local workers has gone down simultaneously.Because of poor participation of local workers, the foreign workers are slowly taking over the work from locals. In construction industry, the foreign worker going into sub-contracting work, where there is a lot of money to be made. Besides, the presence of illegals create problems also since illegals are not limitted by rules and regulations and are free to infiltrate into any j obs so long as the employers are willing to accept them.e) Foreign Labour Caused Works DelayConstruction industry is labour intensive industry, but due to poor participation of local labours, construction industry is depending on large number of foreign labour. According to Economic Report 2003/2004, The new Immigration Act 1995/63 (Amendment 2002), which came into effect on 1st August 2002, about 318,300 illegal immigrants were deported in 2002. This has caused construction activities in all stages to slow down. Consequently, there was a labour crunch that cause costly work delays.In a move intended to reduce dependence on foreign labour and increase employment opportunities for locals, the government has shortened the validity period of work permits to 3 years. The policy change will seriously affect human resource planning in construction industry and caused delay of works.f) Low Productivity and quality due time consuming to train new workersIn the reduction of the duration of w ork permits for foreign workers from 6 or 7 years to only 3 years had caused deterioration in the poor quality of workmanship and low productivity. This is because foreign labours that had 3 years experience may be replaced by those do have prior construction experience, thus resulting in low productivity and poor quality of work and time consuming on teaching the inexperience labours. Some of them were not able to cope with new experience of working on large-scale projects. Abdul Rahim (2009) also mentioned that the lack of quality foreign labour that have been hired is one of the main problems in construction industry.The companies that lose workers will need to hire new ones, who are likely to be unskilled and inexperienced. That means the employers have to spend time and resources to train these new workers. As indicated in Master Builder (Abdul Rahim, 2009), upon commencement, the foreign labour would require another 2. to 3 months to go through an orientation or learning curv e period before they become productive.Furthermore, on-the-job training will take around seven to eight months then only the foreign workers will begin to contribute to company. To some extent, the training was difficult, as most foreign labour were paid day-by-day wages and were reluctant to undergo training due to loss pay.g) Heavy Expenses in the Recruitment surgical operation and Long Permit Processing TimesMalaysia introduced harsh new immigration rights, thus the construction industry is suffering from an acute shortage of foreign workers throughout the nation. As a result, this has caused construction industry activities to be delayed albeit contractors trying to outflank of their endeavours to recruit new workforce. The central problem now appears to be the long butt oning time taken by the authorities to grant the foreign work permit (Abdul Rahim, 2009) Contractors securing new jobs have problems mobilizing new workers on time, due to this long work permit or recruitme nt process.Based on Abdul Rahman, (2009) he also mentioned that base on current experience, it takes about 2-3 months on a best case scenario to go through the entire administrative process, commencing from obtaining a work permit from the ministry of Home personal matters to the foreign workers gaining physical entry into Malaysia to work.Thus, it is not cost effective to send foreign workers home afterward the permit period (3 years) because of heavy expenses in the recruitment process. Meanwhile, the process to bring in foreign workers is dense and time consuming. Besides, a lot of cost is involved in medical examinations, transportation and levies. Therefore, there is gouge in the system for employers to employ illegal foreign labour and to dodge the levies and charges which are incurred on the employment of legal foreign labour.2.5 Strategies to improve the participation of local labour in the construction industry.2.5.1 Cut Foreign Labour via Minimum Wage SystemRecently, t here was no national minimum wage law applicable to the Malaysia in construction industry. Basic wage rates vary according to location and vay from company to company (MIDA,2009). The government should implement the minimum wage scheme in all job sectors to reduce the intake foreign workers and so that it can attract local labour with the standard wages.The scheme has to be enforced as the increasing the number of foreign workers in the country was only benefiting the employers and agencies that brought the workers in. The employers who took the workers in. The employers who took the workers in were only interested in cheap labour. This phenomenon was expected since the employers were more inclined to hire foreign workers who were prepared to accept low wages. But with the implement of the minimum wage scheme, contractors might have no choice but to employ local labour. Besides, with the wage control system, the local labour will accpet the wage rate. Furthermore, the quality of wor k will improve since local labour were mostly graduate with at least diploma level.2.5.2 change Building Systems (IBS)The government encouragement to all employers to mechanise and move into less labour intensive process has not achieved the desired result. On the contrary, the demand for the foreign labour is increasing by the day. (Rydgren, 2004)The majority of foreign labour brought into the construction industry were wet trade labour involved in concrete, brick, and wood works. To reduce construction industry dependence on such foreign labour, we must change the way we work by reducing wet trade in the construction process. This could be achieved through implementation of the alter Building Systems (IBS) Roadmap 2003-2010.By combining IBS with modern management technologies, the local skilled workers would fill the vacancies. They should adapt high technology to lessen the dependence on foreign manpower. CIDB would give free training to locals so that they can replace the fore ign manpower and help the construction sector move towards using new technologies. The IBS Roadmap promises to reduce the number of workers at construction sites, usage of material and wastage.Conventional technology that is being used needs a lot of manpower, causing us to be dependent on foreign workers who are mostly unskilled. As a result, not only is the quality of workmanship being compromised but we also lose out in terms of money flowing out the country. With the IBS, wet trade workers can be reduced and construction world is now beginning to recognise the reduced and construction works focussed on the use of the mechanisation and prefabrication.Besides, the construction world is now beginning to recognise the advantages to be gained by integrating fabricated steel and precast concrete with site cast concrete, much less labour is required on building sites. This result in the hidden cost of moving labour around tall or large buildings being lower (Peter, 2004).The Government even stopped offering incentives to labor-intensive firms, tuning its attention instead to developing of strategic high technology industries (Rajah, 2001)2.6 Summary2.1.1 Skilled LabourHigh skill level , high perfomance, high education, expertise, experienced and high wages2.1.2 Semi-skilled labour partly skilled or trained, not sufficient to perform specialised work.Do not in