to identify and assess critical and 0.6% other (Mundi, 2018). Singapore is also an immigrant-seeking factors affecting workforce diversity
Received: 8 September 2020 Revised: 5 November 2020 Accepted: 19 November 2020 DOI: 10.1002/sd.2155 RESEARCH ARTICLE Assessing the effects of workforce diversity on project productivity performance for sustainable workplace in the construction industry Daeyoun Won1 | Bon-Gang Hwang2 | Soo Jing Chng2 1 Department of Civil and Environmental Engineering, Seoul National University, Seoul, South Korea Abstract Recent studies on workforce diversity have preached that workforce diversity could 2 Department of Building, National University of Singapore, Singapore, Singapore have a positive impact on productivity if it is managed and utilized well. Due to the global trend of increasing workforce diversity in construction projects, it is crucial to Correspondence Bon-Gang Hwang, Department of Building, National University of Singapore, Singapore 117566, Singapore. Email: [email protected] understand the factors affecting workforce diversity and their impact on productivity for developing a sustainable environment for workforce diversity. However, little attention has been given to how workforce diversity may affect productivity performance in the construction industry. Thus, this study aims to assess the impact of workforce diversity on project productivity performance (PPP). Twenty-one diversity factors were identified via literature review and validated by industry experts, followed by a survey conducted with 58 firms working in Singapore. The responses were analyzed and used to develop a partial least squares structural equation model. The outcomes from the model signified that the diversity aspects such as efficient decision-making and countering the issue of skilled labor shortages had the highest impact in their respective categories of “Skill and education” and “Age and experience.” Therefore, this study contributes to the core body of knowledge and practice both in defining workforce diversity factors and in assessing the relationship between diversity factors and productivity. Furthermore, feasible strategies that match the factors prioritized by the level of the impact on PPP were proposed. These can help construction organizations to understand the untapped potential of workforce diversity and its impact on PPP, ultimately enhancing the productivity of the industry and sustainable diversity in the workplace. KEYWORDS built environment, construction industry, project productivity performance, structural equation modeling (SEM), sustainable workplace, workforce diversity 1 | I N T RO DU CT I O N Singapore [MTI], 2018). However, this productivity growth was primarily driven by sectors such as manufacturing, accommodation, food, Recently, Singapore has made an effort to promote the productivity and finance instead of construction (MTI, 2019). Therefore, these sec- of the entire industry; however, productivity in the construction tors increased their productivity while the construction sector was industry is still in recession. In 2017, Singapore’s overall productivity less productive—even underperforming expectations. Although not grew by 4.5%, which was the highest recorded since 2010, following the worst-performing industry, the construction sector is still deemed the Global Financial Crisis (Ministry of Trade and Industry Republic of as weak in productivity, negatively impacting the country’s overall 398 © 2020 ERP Environment and John Wiley & Sons Ltd. wileyonlinelibrary.com/journal/sd Sustainable Development. 2021;29:398–418. 399 WON ET AL. productivity. In addition, the construction sector is also seen to be of this study can contribute to the body of knowledge and practice underperforming due to its predicted failure to meet the target of a both in defining workforce diversity factors and in assessing the rela- 2–3% productivity growth by 2020 set by the government. tionship between diversity factors and project productivity perfor- On the other hand, Singapore has been encouraging more talent mance (PPP) in the context of the construction industry. Furthermore, from abroad, with a highly diverse workforce in terms of culture and this study can serve as a cornerstone for the industry to handle its race. It is also a multi-ethnic and multi-racial society with a significant workforce diversity properly and achieve the benefits of increased foreign population. In Singapore, there are four major ethnic groups: productivity, by proposing viable strategies to harness diversity to Chinese, Malay, Indian, and others (MTI, 2018)—showing just how increase productivity in the construction industry. diverse Singapore’s society is in terms of ethnicity and religion, partic- This study investigated the relationships between workforce ularly in comparison to other countries such as Japan, which has an diversity and productivity in the construction industry. Therefore, the ethnic breakdown of 98.5% Japanese, 0.5% Koreans, 0.4% Chinese, following objectives were identified: (i) to identify and assess critical and 0.6% other (Mundi, 2018). Singapore is also an immigrant-seeking factors affecting workforce diversity, (ii) to assess the impact of work- country, aiming to attract foreign talent to boost its human resource force diversity on project productivity, and (iii) to propose feasible rec- capability in line with Singapore’s white paper prediction of an influx ommendations to enhance diversity in the construction industry. The of foreigners. Thus, the growth potential and significance of diversity main goal of the study was to identify the potential benefits that a in the population encapsulate the labor force of Singapore (National more diverse workforce can bring to productivity in the context of the Population and Talent Division, 2013). construction industry, as well as to discover solutions to help better Many studies on workforce diversity have been conducted in integrate diversity into the labor force in construction firms. The ben- recent years, highlighting that workforce diversity could have a posi- efits and reasons for the solutions were analyzed and reviewed. As tive impact on productivity and workplace sustainability if it is man- workforce diversity concerning project productivity is underexplored aged and utilized well (Gladwin, Krause, & Kennelly, 1995; in Singapore’s construction industry, this paper aimed to draw conclu- Plummer, 2006; Saxena, 2014; Scholtens & Zhou, 2008). As such, the sions on and propose feasible solutions to this matter. construction industry also has a high level of workforce diversity, and To accomplish each objective, the study proposed the following taking full advantage of this workforce diversity could have a positive methods as shown in Figure 1: (i) a comprehensive literature review impact on project productivity (Loosemore, 2014; Shifnas and Sutha, was conducted to identify the crucial factors affecting workforce 2016). Therefore, by tapping into Singapore’s diverse labor force, diversity in Section 2, (ii) pilot interview and survey questionnaire there could be a potential impact on project productivity growth and development were performed for data collection, and structural equa- sustainable production in the construction industry. Through more tion modeling (SEM) method was proposed for the data analysis to skilled and diverse workers from various sectors, their experiences, assess the impact of workforce diversity on project productivity as culture, skills, and professional ambition across firms and industries described in Section 3, and (iii) post-interview with the analysis results could be transplanted into Singapore. To this end, it is imperative to was performed to discuss the results and propose the feasible strate- understand the relationship between workforce diversity and project gies to improve the workforce diversity and project productivity productivity correctly. However, studies on the relationships existing accordingly as described in Section 5 and 6. in Singapore’s construction industry are still insufficient. Also, not much attention has been given to how worker diversity may affect project productivity, although Singapore’s focus on 2 | LI T E RA T U R E RE V I E W increasing productivity mostly falls on skills training, implementing new construction technology, and workforce health and environment. In a country as diverse as Singapore, it should fully capitalize on its 2.1 | Productivity improvement initiatives in Singapore labor force diversity to boost productivity (Selvaraj, 2015). Although there are guidelines and specific laws in place to maintain age and The workforce in the construction industry is still developing, as the gender quotas in the workforce, these are mostly to prevent unfair issue lies with labor availability and training (Arditi & Mochtar, 2000). dismissal instead of looking at how they can increase productivity The study conducted by Singapore Contractors Association Ltd (Ministry of Manpower [MOM], 2011). There are also not enough (SCAL) (2016) stated that firms had identified the need for human studies on both Singapore’s and the construction industry’s context. resources with relevant skills and a lack of effort to manage the work- Given the weak performance regarding project productivity and force as reasons for issues in human resource utilization in the pro- Singapore’s position as a uniquely diverse society, there is a greater ductivity of the construction industry. In this context, initiatives to need better to understand the relationship between workforce diver- boost productivity come in the form of a construction productivity sity and productivity to develop proposals. This study thus aimed to roadmap. The main objectives pushed included points such as regulat- bridge the research gap and solidify a model of construction labor ing the demand and supply of construction, introduce more construc- diversity productivity that will enable industry stakeholders to under- tion technology, uphold standards when hiring labor, and further stand how labor diversity can cause productivity to change and to develop the skills of workers (Building and Construction Authority propose solutions by capitalizing on this model. Therefore, the results [BCA], 2015a). The other aim of the roadmap was to enable the 400 WON ET AL. Research Objectives Methods Research Outcomes To identify and assess critical factors affecting workforce diversity • Literature review Section 2 • Workforce diversity factors affecting workforce diversity To assess the impact of workforcediversity on project productivity • Data collection: Pilot interview and survey questionnaire development • Data analysis: Structural equation modelling Section 3 & 4 • Survey questionnaire • Analysis results To propose feasible recommendations to enhance diversity in the construction industry • Post interview with the analysis results Section 5 & 6 • Discussions of the results • Recommendations F I G U R E 1 Connections among research objectives, methods, and research outcomes industry to meet the national target of a 2–3% average annual growth educated, with the literacy rate also rising every year; for instance, by 2020. The areas of focus were a higher-quality workforce, higher 2017 recorded a 97.2% literacy rate compared to 97% in 2016 capital investment, and a better-integrated construction value chain. (Department of Statistics Singapore [SingStat], 2020). By encouraging In 2015, an additional S$450 million was provided to help firms invest more diversified education backgrounds among locals, the diversity of in “impactful productive technologies” and improve the quality of skills will only stand to increase in the future workforce. their workforce from 2015 to 2018 (BCA, 2015b). Building and Con- Diversity in age would similarly reflect the “Age and experience” struction Authority (BCA) is continuously pushing for the implementa- distribution in the workforce. Variances in workers’ age would gener- tion and advancement of construction technology, believing it to be ally indicate their level of working experience (Chung et al., 2015). the solution to increasing productivity (BCA, 2015a). Moreover, BCA Thus, the experience is a component of diversity under the age cate- developed a research and development plan for construction produc- gory. An increase in the 60 and above age group in the working popu- tivity, where the construction industry aimed to work on and improve lation reflects the data in 2017, where the median age of Singapore’s technologies adopted (BCA, 2016). These technologies will occur in population stood at 40.5 years (SingStat, 2017). An increasing median several research and development clusters with a future goal and tar- age potentially means an aging population and, in turn, a shrinking get in sight. Therefore, technology is seen as the solution to boost labor force. However, in response to its aging society, Singapore’s Singapore’s construction productivity, and there is less emphasis on retirement age is also increasing. Ministry of Manpower (MOM) reasons for the lagging productivity of the construction sector in com- announced that the proportion of workers aged 60 and above active parison to other sectors in Singapore. in the labor force had increased by 6.5% over 9 years from 2006. Otherwise, gender diversity in Singapore’s workforce has been steadily equal over the past few years, with the labor force gender ratio 2.2 | Workforce diversity in Singapore closely reflecting the gender ratio of the population. Although close to having an equal proportion of males and females in Singapore’s popu- A diverse workforce reflects the country’s community. With regard to lation, the percentage of females in the labor force was reported at labor diversity in the workforce, categories are often placed on groups 44.97% in 2017 (SingStat, 2017). of people for ease of categorization when clustering and segmenting Diversity initiatives typically mean the programs, policies, and them for differentiation’s sake. The following four types are com- strategies enrolled to promote diversity within companies. In Sin- monly used when addressing Singapore’s workforce diversity gapore, because the workforce is inherently diverse due to its (Selvaraj, 2015). Firstly, “ethnicity” diversity typically refers to race, multi-racial community, MOM has crafted a toolkit for organiza- but it goes beyond that to include other aspects such as religion and tions to help them better manage their workforce diversity spoken language. The ethnic breakdown of Singapore is estimated to (National Integration Working Group [NIWG], 2014). MOM pro- be 74% Chinese, 13% Malay, 9% Indian, and 3% others, while religious motes the idea that a diverse workforce, along with proper guid- groups equate to 43.2% Buddhists and Taoists, 18.8% Christians, ance, can help drive better business performance and higher 18.5% no religion, 14% Islam, 5% Hindus, and 0.6% others employee engagement. The MOM toolkit provides detailed strate- (MTI, 2018). “Skills and education” diversity refers to the qualifica- gies and reasons why firms should look toward adopting a more tions of the workforce required to enter the job market, as different inclusive workforce. As workforces in Singapore consist of various skill sets are certified to enroll in different jobs. The education level workers from different age groups, gender, nationalities, and eth- and skills also vary across different industries. An increase in skilled nicities who work together, the toolkit aims to help organizations labor with a rise in the percentage of higher education graduates in and managers understand the importance of workforce diversity Singapore from 2007 to 2017 symbolizes the country becoming more and to maximize its potential. 401 WON ET AL. 2.3 | Impact of workforce diversity on project productivity performance men are typically more logical, independent, and competitive, whereas women are known to be empathetic, dependent, and compromising (Jost & Kay, 2005). Therefore, men are expected to disagree more often There are several reasons why MOM is promoting a more diverse and show stronger task behaviors (Myaskovsky, Unikel, & Dew, 2005), workforce. Firstly, organizations that create a more inclusive environ- which can push the group to be more task-oriented. Women, on the ment for their diverse workers can enhance their company’s reputa- other hand, are perceived as more agreeable and supportive, and this tion in the job-seeking market to attract more workers. Secondly, can facilitate more teamwork and interaction. Therefore, when both employees from different backgrounds, who feel more integrated into genders are present in the workforce, their behaviors can be comple- the workforce, will be more engaged and motivated (Pollitt, 2005; mentary to support project tasks (Jost & Kay, 2005; Pucheta-Martínez, MOM, 2011). Lastly, higher employee engagement across all types of Olcina-Sempere, & López-Zamora, 2020). workers may lead to a reduced turnover rate (Dernovsek, 2008; In addition, a 2010 Singapore study on inclusive and harmonious MOM, 2011); a 2008 study by Gallup Management Group revealed workforces showed that 87% of companies surveyed agreed that that engaged employees had a 51% lower turnover on average workforce harmony was essential to business outcomes, and also (Dernovsek, 2008). Therefore, a more diverse workforce allows for demonstrated that a better-managed team with more diverse workers more cross-cultural interactions and a more socially inclusive space could outperform homogeneous teams with more creative solutions reflective of Singapore’s multiracial society, where employees stand to alongside more effective problem-solving methods, thus driving benefit from having good relationships among themselves and with workers to be more efficient and productive (NIWG, 2014). However, the firm. when diverse groups are not well managed, communication will be Concerning the impact that more workforce diversity has on PPP, scattered, and trust becomes weak, compromising the team each of the following diversities, “Ethnicity,” “Skills and education,” dynamics—showing how people management is essential to the “Age,” and “Gender,” are elaborated, based on past research and stud- impact of a diverse workforce on project productivity (Srikanth, ies conducted. Firstly, the exact impact and results of ethnic diversity Harvey, & Peterson, 2016). on firm performance is somewhat unclear due to conflicting theories and reasoning. On the one hand, ethnic-cultural diversity has been theorized to negatively affect firm performance as it may hinder the exchange of information and knowledge among workers due to lin- 2.4 | Identification of workforce diversity factors affecting project productivity performance (PPP) guistic and cultural barriers as well as weaken social ties and trust; people tend to doubt and be warier of people of different ethnicity, A comprehensive literature review was carried out to identify a set of and they prefer to interact with others belonging to the same enclave workforce diversity factors that affect PPP. For the first diversity type, as themselves (Glaeser & Vigdor, 2001). However, ethnic diversity can “Ethnicity,” diversity factors with negative impact were identified as benefit how well a firm performs as it can help facilitate communica- language barriers and lack of trust. Communication among different tions and decisions, and stimulate the brainstorming of new ideas ethnic groups, especially from different countries, often results in a (Hong & Page, 2004). It can also provide useful insights into the global language barrier that has the potential to negatively affect productiv- market and demands to increase a company’s competitiveness ity due to progress being slower from more rounds of clarification (Parrotta, Pozzoli, & Pytlikova, 2014), therefore reflecting inconclusive among workers. Also, because of the poor communication among dif- results on the opposite end of the spectrum. ferent ethnic groups, technical details and management instructions Diversity in “Skills and education” can trigger a knowledge stand to be misinterpreted; this can lead to different ethnic groups exchange among workers within a project group or the firm, which can not trusting each other, which will affect the coordination required for positively affect firm performance (Tsang, Rumberger, & Levin, 1991). In productivity (Makulsawatudom, Emsley, & Sinthawanarong, 2004). On contrast, diversity in “Age” can help stimulate firm productivity because the other hand, as for the diversity factors with a positive impact, PPP the interactions between workers of different age groups (young or old would depend on how much motivation and job commitment the workers), as well as the less and more experienced, can complement workers possess as increased morale can influence commitment to each other for fresh perspectives (Prieto, Phipps, & Osiri, 2009). On the the project and boost workforce motivation and, in turn, improve pro- one hand, younger workers would possess knowledge of new technolo- ductivity (Thomas & Sudhakumar, 2013). In addition, a group of peo- gies currently in use, while older workers have a clearer understanding ple with diverse ethnicity could boost productivity by contributing of the moving process and technical skills (Lazear, 2001). Besides, firms different effective work styles to the project, therefore allowing for a with mentorship programs also stand to gain more from having more more significant inflow of ideas, which would increase productivity diverse ages within the firm (Mor Barak, 2000). (Parrotta et al., 2014). Lastly, “Gender” diversity has been theorized to have potential For “Skill and education” type of diversity, the negative diversity benefits, such as where mixed-gender groups complete tasks quicker factors were identified as a lack of training provided, shortage of and make improved decisions (Ali, Kulik, & Metz, 2011; Sabatier, 2015), skilled labor, inspection delays, and incomplete technical specifica- thus potentially enhancing group performance. The general theory tions. A plethora of unskilled workers have come to the construction states that men and women partake in different societal roles, where industry in developed countries from developing countries 402 WON ET AL. (Abdul-Rahman, Wang, Wood, & Low, 2012; Kaming, Olomolaiye, workforce of different ages can result in higher productivity due to Holt, & Harris, 1997; Khadria, 2006). Due to unskilled and unqualified the incentive gained. With the proper positioning of experienced workers, inspection delays and incomplete technical specifications supervisors, productivity would increase as supervisors have to be occur and eventually decrease productivity. However, contractors assigned to positions and places where they can properly utilize and usually invest less in labor training as they are dissuaded by the short- transfer knowledge gained from experience and translate that into term costs incurred, which result in potential long-term benefits not productivity on the job (Lim & Alum, 1995; Thomas, 2015). As the being reaped, rendering construction firms with little option but to construction industry is becoming mechanized with the introduction hire less-skilled, less-qualified, and less-trained workers to save costs, of new equipment and technology, it is paramount to recruit and train which can severely affect construction productivity (Lim & the younger generation of skilled local workers who are adept at using Alum, 1995). Also, an unskilled supervisor in the workforce can lead technology in comparison to their older but more experienced to an incompetent leader, resulting in unproductive activities, such as counterparts (Lim & Alum, 1995). delayed inspections, more mediocre quality work produced, and Regarding gender diversity, the diversity factors negatively affect- increased idle time of resources (Dai, Goodrum, & Maloney, 2007). ing productivity mainly include the physicality and health of workers. Therefore, without a skilled and trained supervisor and workforce, The physical aspect of construction consists of the time and workload incomplete, unclear, or outdated technical specifications will also of the construction site (Soham & Rajiv, 2013). As men are more likely occur due to inadequate site management, resulting in multiple accustomed to hard manual labor, a more physical job is usually requests for clarification meetings, leading to more interruptions to undertaken by men for increased productivity. Taking the health of the work progress (Jarkas & Bitar, 2012). workers into consideration as a factor affecting productivity, for Otherwise, in the “Skill and education” diversity type, transfer of maternity leave, women in Singapore are entitled to 16 weeks of paid skills and knowledge, effective project planning and execution, quali- leave. In the context of Singapore’s construction industry, workers’ fied supervisors, and efficient decision-making were identified as the health may affect productivity as cross-training and handing over as positive diversity factors in “Skill and education.” The transfer of well as hiring temporary replacements all consume time and knowledge and skills would help generate knowledge spillover among resources, which can impact project productivity. However, with a a firm’s employees, as long as workers’ knowledge sets do not overlap more diverse distribution of gender in the workforce, productivity and are relevant to one another, which positively affects firm perfor- may stand to gain from the contrasting behavior and work pattern of mance (Parrotta et al., 2014). With more relevant skills and training men and women as they have different sets of social behaviors that for construction projects, qualified supervisors can make quicker and could be complementary (Jost & Kay, 2005; Pucheta-Martínez more effective decisions to prevent wastage of time and, thus, et al., 2020). increase productivity on site (Jarkas & Radosavljevic, 2013; Kazaz, Manisali, & Ulubeyli, 2008). With more highly qualified and trained workers, there can be more effective project planning and execution 3 M E T H O D S A N D D A T A C O LL E C T I O N | occurring on-site for construction projects, hence resulting in a positive boost to project productivity through a more skilled and educated 3.1 | Survey design workforce. “Age and experience” usually encompasses work experience as a Before conducting a wide-ranging survey, a pilot interview was con- factor concerning productivity. With a negative impact of “Age and ducted with three industry experts to validate the identified factors experience,” shortage of experienced labor, high rate of labor turn- from the literature review as well as to certify the applicability and over, and unrealistic deadlines for project completion were identified understandability of the questionnaire. This interview helped to elimi- as diversity factors. Since the labor-intensive construction industry nate insignificant and repetitive diversity factors identified concerning strongly relies on and demands excellent skills and experience of the their impact on the productivity of construction projects. During the workforce, a lack of experienced labor can severely affect project interview, the questions were posed to the respondents to list addi- deadlines, cost, and quality of works done (Alinaitwe, Mwakali, & tional factors that may not have been identified through the literature Hansson, 2007). Unlike older workers who stay in the construction review. Targeted respondents of this pilot interview were industrial industry in which they accumulated their experience, a younger labor experts who were chosen due to their relevance and involvement in force results in a higher turnover rate in search of new jobs in differ- the construction industry, who have worked closely with various asso- ent sectors (Thomas, 2015). Such a volatile workforce with more ciates of different diversities. Therefore, their ability to provide valu- youthful workers may result in lower productivity (Bandhanpreet, able insights and views were taken into consideration to develop the Mohindru, & Pankaj, 2013). final survey questionnaire. Finally, as shown in Table 1, a total of Conversely, for the “Age and experience” diversity factors with a positive impact, wages have to be attractive to recruit incoming 21 diversity factors categorized into four principal diversity types were included in a survey questionnaire. workers as the construction sector has to compete with other indus- The survey questionnaire was designed based on workforce tries for its workforce, such as the engineering market, banking, and diversity factors. The questionnaire consists of three main sections, as finance (Thomas, 2015). Therefore, using wages to attract and retain a shown in Appendix S1. The first two sections aimed to solicit Shortage of skilled labor Inspection delays Incomplete technical specifications Transfer of skills and knowledge Effective project planning and execution Qualified supervisors 7 8 9 10 11 Contribution of different work ethic 4 6 Motivation and job commitment 3 Lack of training provided Lack of trust between groups 2 5 Language barrier 1 Ethnicity Skill and education No. Diversity factors With more relevant skill and training for construction projects, the qualified supervisors can make quicker Through a more skilled and educated workforce, there can be more effective project planning and execution occurring on-site for the construction projects, resulting in a positive boost to labor productivity The transfer of knowledge and skill would help generate knowledge spillover among the employees within a firm, as long as the sets of workers knowledge do not overlap and are relevant to one another, which positively affects firm performance Incomplete technical specifications are usually caused by the lack of skill and education. Thus, it can be included in the workforce diversity factor as a mediator affecting project productivity One of the reasons for inspection delay is the lack of skill and education, and therefore it was included in the workforce diversity factor as a mediator affecting project producti
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