Shortage of Skilled Workers in Middle East Construction Industry

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Shortage of Skilled Workers in Middle East Construction Industry

Table of Contents

Introduction
Research Question
Hypothesis
Literature review
Methodology
Conclusion
Works Cited

Introduction

In recent times, the construction industry in the Middle East has been facing the risk of rising labour cost and labour shortages, which in turn is squeezing up the smaller contractors. It has primarily been driven by an elevated liquidity environment because of high petroleum revenue, the governments idea of diversifying the nations economy from gas and oil, and negative rates of real interest. Private and public investments have been introduced in the construction industry in order to build houses for their growing population, airports and hotels for the tourists and large and modern business centres to attract multinational companies. Thus, construction being at the heart of all these ideas is absolutely at its height (Stern, 2001).

Research Question

Whether if the shortage of skilled workers in Middle East construction industry slow down the development in the region? Whether if the shortage of skilled workers in Middle East construction industry would affect the economy on a long term? Whether if the shortage of skilled workers in Middle East construction industry would ramify objectives of the investors in the region? Whether if the shortage of skilled workers in Middle East construction industry would divert the development process to a newer location (For example, the development would shift from Dubai to Cairo)?

Hypothesis

The Shortage of skilled workers & its impacts in Middle East construction industry would slow down the development however, it would be on a short term. Thus, it can be assumed that it would not affect long termed goals. Additionally, it is assumed that as the crisis is short termed the objectives of the investors would not change and they would not shift their business to a newer economic zone.

Literature review

The main risk of such an environment is the shortage of skilled labour and high material costs, which has pushed the construction industry in a complete turmoil in the past few months. As the Middle East construction division has developed in a private and confined manner, future expansion of this division is a huge challenge. Until now, the main constructors have been able to pass the extra labour and material costs on to the developers. However, if this condition prolongs, it could hamper the expansion plans of some important companies, like Arabtec and the Arabian Construction, both inside and outside of the Middle East and have a huge impact on their share prices (Grant, 2007).

During the mid 70s of the last century, many foreign workers migrated to the Middle East expecting higher salaries and a better life, which they did not have in their home countries. Now a number of Asian countries have had a rapid economic growth resulting in larger career opportunities and increased wages, slowly but steadily closing the wage gap between the Middle East and Asian countries. In addition, international and regional competition is making it very difficult for these construction companies to find skilled and unskilled labour at low prices (Nagy, 1998).

Earlier due to contraction and negative growth of the construction companies, many people had to switch their careers as their companies either downsized or closed down. However, as projects increased, the need for skilled work force and experienced labour force increased. With this increase in the market players, the supply of managerial and engineering talent is unable to keep up with the demand, leading to shortages in the workforce. This recurring nature of the construction industry has contributed to the acute shortage of skilled personnel (Athukorala, 2002).

Methodology

A Qualitative method of study differs from the usual quantitative methods (used in the study of pure sciences) in the sense that it tends to be far more subjective. This is in sharp contrast to the methods used in pure sciences which are exclusively objective. The research methods for marketing are a combination of both quantitative and qualitative methods. Being open to qualitative methods of study also allows social scientists to incorporate non-quantitative data (i.e. non-numerical data, such as words, images, gestures, impressions etc.) in their study. Since human beings tend to operate in terms of such data and not in terms of the terminology used in ordinary sciences this broader outlook is far more applicable in the study of social sciences. In keeping with the methodology employed in marketing researches the theories too are formulated and used keeping in mind that they are not necessarily applicable to all conditions. Be it psychology, history, political science or economics human events are most likely to influence the rules which define the basic theories of a marketing subject. Success in the field of marketing researches can therefore be achieved if and only if it is understood that the subject has no space or opportunity for watertight methodologies or theories.

It can always be stated that Qualitative research is a process that includes interpretative paradigm under the measures of theoretical assumptions and the entire approach is based on sustainability that is depended on peoples experience in terms of communication. It can also be mentioned that the total approach is because reality is created on the social formulations. It can also be mentioned that the basic target of qualitative research is instrumented towards social context under normal circumstances where it would be possible to interpret, decode and describe the significances of a phenomenon. The entire process is operational under the parameter of interpretative paradigm that can minimize illusion and share subjectivity under contextualization, authenticity and complexity of the investigation (Schuster, 2008). Thus, qualitative method would be applied, as this is more time saving and economical along with being the easier mode of calculating the variables and data analysis.

Conclusion

Presently there is a huge shortage of structural and civil engineers, project managers, safety managers, on-site supervisors and tradesman, like welders and fitters. More effort must be made in order to plan better work force and various human resource needs of the construction companies. The industry should also engage their retired tradesman to train and instruct imparting real life experiences to both the skilled and unskilled labour. Shortages of labour and rising material cost are responsible for major construction delays and project cancellation in the Middle East. Until and unless the contractors increase their capacity and resources, they will not be able to attract large project, hampering their own growth and their economys expansion plans. So, there might be an outside chance, though unlikely, that the development would suffer due to this crisis and the investors may loose interest in the region and shift to a newer economic region nearby. However, these appear inconclusive to prove at the moment (Schuster, 2008).

Works Cited

Athukorala, Premachandra; 2002; The use of migrant remittances in development: Lessons from the Asian experience; Journal of International Development; 4, 5, 511-529; School of Economics, La Trobe University
Grant, Jim, Fatema Shabbir Golawala, Donelda S. McKechnie; 2007; The United Arab Emirates: The twenty-first century beckons; Thunderbird International Business Review; 49, 4, 507-533; American University of Sharjah; University of Wollongong, Dubai
Nagy, Sharon; 1998; This Time I Think Ill Try a Filipina: Global and Local Influences on Relations Between Foreign Household Workers and Their Employers in Doha, Qatar; City & Society; 10; 1, 83-103; Depaul University
Schuster, Camille P, Michael J. Copeland; 2008; Cultural theory in use: the intersection of structure, process and communication in business practice; Journal of Public Affairs; 8, 4, 261-280; College of Business Administration, California State University San Marcos, USA; Proctor & Gamble, Cincinnati, Ohio, USA
Stern, Frank, Paul Schulte, Marie Haring Sweeney, Marilyn Fingerhut, Pamela Vossenas, Greg Burkhardt, Mary-Frances Kornak; 2001; Proportionate mortality among construction laborers; American Journal of Industrial Medicine, 27, 4, 485-509; National Institute for Occupational Safety and Health (NIOSH), Cincinnati, Ohio; Laborers Health and Safety Fund of North America (LHSFNA), Washington, DC

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