Frustration at building supply chain delays stalling projects is driving out critical workers, an official report finds.
The challenging project to paint the Chatham Islands' new 1364 square metre museum and council offices has reinforced a few lessons for Pete Dalman.
Plan ahead.
Get the supply chain logistics right: "We had one crack at getting all the paints in the right quantities over, leaving on a boat from Timaru, and anything after that would have been airfreight, which was costly."
And critically, look after your people.
An Ipsos report, for the Ministry of Business, Innovation and Employment, reveals a new and emerging crisis in recruiting and retaining builders and tradies – and that's reflected in the experience of Dalman and other business owners he knows.
His Christchurch-based company, Finesses Painting & Decorating, has just lost three of its 27 staff. They've gone to set up their own firms. Dalman wishes them well and will continue to use them as contractors – but he says it's a reflection of the increasing difficulty retaining staff when projects are regularly stalled by supply chain delays.
The Reserve Bank reveals more Kiwi have been making the big step into self-employment since Covid and lockdowns hit.
Now, the MBIE report warns of construction workforce problems over the next five years. Ipsos surveyed 3856 construction customers and industry players late last year, including 1038 workers.
It says 21 percent of workers were planning to leave New Zealand, 20 percent were planning to leave the construction sector in the next five years, 15 percent were planning to pause work to do extra training or study, and 14 percent were planning to pause work for personal reasons. And of course, this comes at the same time that the industry's pipeline of overseas workers is shut down almost entirely by the pandemic border restrictions.
"Although apprenticeships in the sector had increased since the Covid-19 pandemic, there may be a decrease in experienced workers developing over the next few years," the report finds.
The workforce problems have been exacerbated by the supply chain delays, the report says.
"Businesses and workers experienced an increased level of complexity in running their daily operations. All procedural aspects were reportedly harder to manage, particularly delays with council paperwork and difficulties in sourcing products, both of which had flow-on effects to most aspects of project and business management.
"As processes and project management got disrupted, it became harder to have the right people doing the right work at the right time, causing quality or process problems."
Residential construction and renovations customers were also finding it harder to find tradespeople and to get quotes, the report found. Many described delays in building consents and inspections, and increased difficulties in getting loans.
Overall for tradies and customers, the greatest deterioration was to the ability to get quotes from product and service suppliers, and to get building consents granted.
The MBIE report finds that the supply delays are worsening problems of stockpiling – the most common compliance problem reported by 41 percent of respondents.
Of businesses and workers surveyed, 27 percent also said they'd seen breaches of Covid health and safety protocols, 24 percent reported workers “cutting corners” due to work pressure, another 24 percent said they saw workers performing tasks outside their skill sets, and 22 percent reported unapproved product substitutions being made on sites.
"Given the current Gib shortages, I have heard plenty of rumours that there are a few of the larger group home builders that have warehouses of the stuff. Similarly with framing timber, batts, ply. This appears pretty common, even amongst smaller companies." – Mike Blackburn, CBS Co-op
Some builders report that Fletcher's truckies have been instructed to withhold deliveries like Gib wallboard, if they turned up and found a warehouse already had a stockpile.
Combined Building Supplies Co-op director Mike Blackburn confirmed he'd heard of building companies that had resorted to stockpiling building supplies – which in turn was worsening the delays for others.
"Given the current Gib shortages, I have heard plenty of rumours that there are a few of the larger group home builders that have warehouses of the stuff. Similarly with framing timber, batts, ply. This appears pretty common, even amongst smaller companies."
Those that hadn't stockpiled, though, were unable to complete their projects. "There are plenty who haven’t and are now come to a standstill."
Newsroom has revealed some companies going under, like Christchurch building firm Maxim Construction, unable to balance the books when projects stalled.
But others are working together to try to manage the highs and lows – one week they might be run off their feet, the next week all their projects are stalled awaiting the arrival of Gib, Pink Batts or framing timber.
Pete Dalman is working with colleagues on solutions to pool labour, so companies with under-utilised workforces can sub-contract them out to companies that need more workers.
He and Brett O’Donnell have founded Workable, which has developed an app to match up workers with spare capacity to companies that are short of tradies and labourers – and that should also help those like his three workers who have quit big companies to work for themselves.
"With the Great Resignation and people going out on their own, this platform is actually going to make it easier for them to do that," Dalman says. "It will be a place for them to put themselves on and to be discovered by business owners like myself, desperately looking for staff. That's going to be awesome."
