Why construction's divisive 'class' system is limiting new technologies and impacting on recruitment

The structure of the construction industry and the way it operates is limiting accessibility to the new technologies that are so important in helping to improve the quality and sustainability of the built environment, as well as affecting recruitment and staff retention, in the view of experienced RICS qualified quantity surveyor, Stephen Pilling.

In a recent interview, Quantum Group founder and director Stephen explained why, despite the development of numerous advanced tools and materials with massive potential to take construction forward, the tier system is not helping to advance the industry as the result of what he calls a 'class system'.

Stephen says:

"Generally construction is categorised as a vertical tier system, where you have columns of contractual relationships.

"The highest tier, Tier 1, is generally regarded as the national and international contractors - very large businesses. Below that, Tier 2 tends to be the specialist consulting contractors, who will design the specialist services that go into the building. And again, these very large businesses tend to be national contractors.

"Below them we see the Tier 3 specialist trades, which are the trades such as electricians, plumbers, joiners and bricklayers. And under them, we may typically find a Tier 4 who are not what we would call Tier 3 bona fide sub-contractors, where they are supplying labour, plant and materials. Instead we find that Tier 4 in this vertical structure is 'labour only' sub-contractors.

"So you can see that in the tier system there are contractual relationships to deliver the building.

According to Stephen, however, there is another column of relationships that is prevalent today and is not headed up by the large national and international contractors, but within the SME environment. He believes this alternative structure is causing problems for the industry and a key reason why a divisive 'class system' exists with those in the lower class less likely to be able to access to new technologies.

Stephen continues, "In this system which operates in construction's 'lower class' there is still a Tier 1, so you'll still get a main contractor at that level, but we're less likely to have a Tier 2 of specialist consulting contractors. It is more likely to have a Tier 2 categorised more like the Tier 3 of the other system, where you get the trades such as the electricians and plumbers. And under that, we see a Tier 3 of labour-only sub-contractors.

"And what I seeing as a challenge for people coming in to the industry is a divide that's no longer to do with the vertical column relationship, but more on a horizontal basis where we have a class structure.

"On that first column of contractual relationships Tier 1 and Tier 2 businesses tend to be in an 'upper class'. Typically those contractors are heavily hierarchical and in a structure where they use a lot of technologies - the process of construction is very fragmented in so far as the specialist trades are very particular.

"What happens in the second tiered structure is that the risks are handed down from top to bottom and it reaches a floor at the lowest tier. These are the smaller firms who tend to actually be on the building site, doing the work, as opposed to managing it in the top tiers.

"They will take much more of the risk than the main contractor as this tiered system allows the risk to be passed down.

"The lower class in that structure is categorised by small to medium sized enterprises that anyone would recognise as normal, small scale construction. That's not to say they are not high turnover companies - some turn over millions of pounds - but they tend to be regional specialist sub-contractors.

"There is a different power/risk structure where more of the risk is passed down. What concerns me is that those guys, who incidentally represent the biggest proportion of construction GDP, are not getting as much access to or widely using new technologies. They don't exercise the 'upper class' management structure where the managers in their businesses rarely attend the building site, because everybody's involved in the construction process.

"I see this as problematic for students coming into industry because I question where do we aim to place our people that we are educating. Are we aiming for that higher class structure where there is a clear hierarchy - a place for those who are the type of people we want to work in an office environment, and those are the people who will work on site.

"The problem is that doesn't really exist in lower class organisations, which may be a challenge for new recruits who may feel the reality of day-to-day work doesn't match what their perception was. This could explain why we have difficulty retaining staff, both in the quantity surveying profession and construction industry as a whole."

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