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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