On-Site Magazine

Invest in human capital for productivity and profitability

By David Bowcott   

Risk Management

DB-Photo1This issue of On-Site has a focus on investment in research and development (R&D). When we think of R&D within the construction sector, most people think of investment in solutions related to design or project management software, construction materials, asset monitoring tools, systems controls, and other physical capital related aspects of the construction industry. Though there will be many dollars spent, and many solutions developed, from these vital sectors of the construction economy, we can’t forget that the foundation of this industry is its people, and, for now, productivity will continue to be driven by the people of this industry. Further, you can invest R&D dollars into human capital to drive productivity and profitability. Every construction company has physical capital and human capital, and it is the marriage of these two capital sources that will drive the company’s success.

Related to people, I am lucky to work in an industry that acts like a thermometer to the industries we serve. The insurance sector issues policies that insure a myriad of risks. When we take all of the policies issued for a particular industry, say construction, and we monitor the claims results from all of these policies, we truly do get a temperature check on where that specific industry is failing (after all a claim is something that went wrong and cost the project/company money).  In recent years we have noticed the construction industry is running a fever in one area in particular, and that’s in the area of human capital experience. 

Everybody has seen the numbers around human capital demographics so I don’t have to spend a lot of time evidencing the fact that all industries, not only construction, are facing a workforce where the experienced workers are retiring and the succession to those workers don’t seem to have the same level of experience as their retiring colleagues. Our data is showing a noticeable spike in design-related claims and workmanship-related claims. When we peel back the onion on these claims we are finding the level of experience of the design firm that created a design error was not what it used to be, further we see the level of experience from the folks performing the workmanship related to construction of the design is also lacking. The global construction sector is in the middle of a strong contraction in experienced human capital.

So back to research and development investments. When deploying your R&D money in hopes of coming up with some fantastic innovation to improve productivity at your company, you should also measure the impact of that technology on your employees. Focusing on innovations that helps your employees make up for the current shortfall in experience are also worthy R&D investments. Here are a few examples of investments that could drive improved productivity by training or supplementing your current employees experience levels:


Collective Intelligence Systems – software that can aggregate the experiences of your entire employee base for the benefit of those that are less experienced.

Education and Training Though it may not be as sexy as some of the R&D related to building sciences or innovative building material hybrids, it is a solution that is constantly improving. The speed at which you can develop knowledgeable employees is a vital ingredient to success.

Data Investments – Invest in sources of data that allow your people and your company to benefit from the experiences of others.

Visualization Solutions – Virtual reality BIM systems are here and the ability to imagine problems in a virtual world will give your employees virtual experience, which can be far less costly in comparison to real experience (virtual mistakes cost nothing if corrected).

Collaborative Systems – systems that improve the collaboration between design, construction coordination, subcontractors and suppliers can make up for a lack of experience.

The above are but a few areas where your R&D money can be spent to improve a real issue that is no doubt facing your organization – a human capital supply shock!

David Bowcott is senior vice-president and national director of Large/Strategic Accounts at AON Reed Stenhouse Inc. Send comments to editor@on-sitemag.com.


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