January 23, 2012

Major Projects: Developing a Labour Strategy to Control Risk

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A significant cost of any major project is the labour component. Labour shortages, lower productivity, escalating costs and potential disruption by labour unrest can all increase financial risks. A labour strategy, designed to minimize risks and attract a competent and productive work force, can ensure that the project is done right the first time, on time, safely and within budget.

Every project owner wants to attract, motivate and retain the most qualified employees matched to the jobs for which they are best suited.  A labour strategy targets these goals in the context of the project objectives and the social, economic, industrial and business environment.  Its key components should include:

  1. A Human Resource Management Team to develop and administer the labour strategy.  It is not enough to retain an engineering, procurement and construction management (EPCM) firm. Project owners and EPCM professionals must work together to cultivate the development and administration of the labour strategy.

  2. A Labour Relations Framework to set the structure for administration of labour relations. In the last 20 years, most major projects in the province have had Special Project designation, either by Order-in-Council or by the Labour Relations Board, or have proceeded by way of a site-specific collective agreement negotiated by the building trades and the Construction Labour Relations Association of Newfoundland and Labrador Inc. A Special Project Agreement or Site Agreement can provide labour stability and avoid disruptions due to labour unrest.

  3. A Labour Management Plan (LMP) to outline labour relations policies and procedures, negotiation and administration of the collective bargaining agreement, grievance and arbitration procedures, and complaint processes.  The LMP will identify the roles, responsibilities and reporting lines for the owner, EPCM and contractors engaged in the project to ensure a consistent and coordinated application of policies and procedures.

  4. Project HR Standards, Rules, Policies and Procedures to incorporate project-specific circumstances and provide the owner, EPCM professional and subcontractors with mechanisms to manage risk associated with labour relations and demonstrate delivery of diversity, ethics, safety and training requirements which will aid in attracting skilled workers.

  5. An Employee Orientation Plan to provide the essential information, forms, contacts and checklists required by any employee on the project.  It should anticipate the culture and values of the project and help employees understand their job, performance expectations and project goals and priorities.

  6. The Supervisory Training Program is designed to provide supervisors with proven managerial skills, effective verbal and written communication skills and employee development techniques.  Practical and relevant training opportunities can include basic supervisory skills, safety and environmental leadership, harassment and sensitivity training, productivity enhancement, quality control, employee relations and motivation, and dealing with diversity and adjacency.

  7. Diversity and Adjacency Plans are designed to incorporate impact and benefit agreements which may be applicable to the project’s geographic area. Diversity and adjacency programs are often an integral component in the success of a major project and can assist in attracting the largely untapped labour market consisting of women, aboriginals and internationally trained workers.

  8. A Labour Productivity Management Plan created by a Labour Productivity Management Committee comprised of construction management, project controllers, health and safety, key contractors and labour relations.  An integral component of this plan involves working with labour to develop and implement a program of excellence designed to improve productivity and accountability among the skilled trades.

  9. A project-specific Labour Acquisition Plan developed to minimize risks associated with labour shortage. Typically it will identify:

a) Labour force requirements by skill and trade;
b) Labour shortages and forecasted shortages;
c) Strategies to maximize local hiring;
d) Strategies to maximize training and hiring in under-represented groups;
e) Strategies to increase apprenticeship program enrolment or required skills  training;
f) Recruitment strategies engaging professional recruiters, websites, social marketing and job fairs;
g) Strategies to attract skilled workers from other regions; and
h) Strategies to utilize temporary foreign workers, including potential government and organized labour support.

Demographic trends and increased demands for skilled trades within the construction industry are likely to place significant pressure on project owners to recruit and retain the necessary skilled workforce to complete major projects.  The special project structure available within many provinces in Canada can help to provide stability and reduced risk associated with the labour component of major project developments.  The development of a labour relations strategy is a necessary part of any plan of action to meet manpower requirements in anticipation of the social, economic, industrial and business environment within which the project is to be developed.


For more information contact author
Gregory Anthony or a member of our construction team.


Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.