The construction industry needs a massive culture change if organisations are going to get the best contribution from all their people, explains Constructing Excellence KPI consultant Martin Print.

In 2002, Constructing Excellence (CE) launched the Respect for People (RfP) Key Performance Indicators and Toolkit to help companies put people management improvement at the top of the agenda. CE’s RfP Report in autumn 2007 investigated how organisations have been using the RfP Toolkit and assessed its impact since its introduction.

The business opportunity
Can performance measurement, KPIs and benchmarking be a genuine help? Is performance measurement only useful to large companies? What difference will KPIs make? These are questions to which companies both large and small need answers.

Companies benefit from benchmarking in three ways. Firstly, the RfP KPIs can be used to benchmark the performance of issues, such as employee satisfaction, employee turnover and sickness absence against the rest of the industry, which provides the basis for improving performance in a structured way. Secondly, having the data and a track record of improvement, leaves companies well placed to respond to clients who want convincing performance data, as well as a keen price, before they award contracts. Finally, companies with a performance that is demonstrably better than the industry average can market their performance to new clients.

Understanding performance
The RfP Toolkit covers five key areas: equality and diversity, working environment, health and safety, training plan, work in occupied premises and workforce satisfaction. The toolkit provides a comprehensive checklist of actions, plus a method of measuring the performance of internal processes. Results from the RfP Toolkit compliment the data from a benchmarking exercise using the RfP KPIs.

Since 2002, many of the RfP KPIs have shown that the industry is slowly improving. However, the 2007 KPI Survey revealed mixed results, suggesting that the industry may be going “off the boil” on people issues. While staff turnover improved, dropping from an average of 5.9% in 2006 to only 5.0% in 2007, days lost through sickness worsened from an average of 1.4 days per employee in 2006 to 1.7 in 2007 and employee satisfaction fell 8% over the same period. These are signs that employers need to keep a sharp focus on improving the working environment.

However, the number of companies reporting zero incidents now stands at 62%, which is double the 31% registered in 2002. In spite of this long-term improvement, the overall industry accident rate worsened in 2007, suggesting that most accidents are concentrated in a small pool of unsafe companies.

Business benefits
The RfP KPIs and Toolkit demonstrate the link between the people management and business performance. They provide businesses with the facts needed to tackle areas that have been historically problematic for the construction industry, such as health and safety. The construction industry has had a poor track record in this area in the past, having one of the highest incidences of accidents and ill health of all sectors. High accident rates, in turn, lead to high labour turnover and poor employee relations. In an industry where risk is endemic, people issues simply cannot be ignored. The first step towards tackling the problem is getting solid data on the performance of internal processes and then embedding a culture of continuous people management improvement into the organisation.

While the construction industry has improved in many aspects of the RfP agenda, it cannot afford to be complacent. Without measurement you can’t benchmark, and without benchmarking improvement is focused only on one’s own company performance. Using KPIs to measure and compare performance will challenge businesses by comparing performance against the industry as a whole. KPIs provide clarity: they tell you where you are now and where you want to go.

Increasingly, it isn’t just contractors who are being pressed to measure and benchmark performance; clients are also under mounting pressure to follow suit and demonstrate best value. The widespread availability of KPIs means that there are no barriers to starting on the road to measured, continuous improvement. They provide a simple and effective way for businesses to ensure that they lead the field and are ahead of the competition. As President Franklin D Roosevelt said: “The only thing to fear is fear itself.”