THE CHALLENGES OF REDUCING LABOUR COST IN
NIGERIA BUILDING INDUSTRY
(A case study of osun state)
BY
OYEWO MORUFU KAYODE
MATRIC NO: BT/HND/F13/0363
A PROJECT REPORT SUBMITTED TO THE
DEPARTMENT OF BUILDING TECHNOLOGY,
SCHOOL OF ENVIRONMENTAL STUDIES,
THE FEDERAL POLYTECHNIC OFFA
IN PARTIAL FULFILMENT FOR THE AWARD OF
HIGHER NATIONAL DIPLOMA
JULY, 2016.
CERTIFICATION
This is to certify that this project report entitled “The Challenges of
Building Labour Cost in Nigerian Building Industry" by Morufu
Kayode Oyewo meets the regulation governing the award of Higher
National Diploma of the Federal Polytechnic Offa and is approved for
its Contribution to knowledge and literacy presentation.
MR A. L. OPOOLA
Supervisor
________________
Signature & Date
MR K. A. FOLARANMI
Project Coordinator
________________
Signature & Date
BLDR B.A. LAWAL
Head of Department
_________________
Signature & Date
EXTERNAL MODERATOR
_________________
DECLARATION
I declare that the work in this project report entitled THE
CHALLENGES OF BUILDING LABOUR COST IN NIGERIAN
BUILDING INDUSTRY has been performed by me in the department
of Building Technology. The information derived from the literature
has been duly acknowledged in the text and a list of references
provided. No part of this project report was previously presented for
another degree or diploma at this or any other institution.
________________
Name of Student
____________
Signature
_____________
Date
ACKNOWLEDGEMENT
All
glorifications,
thanks,
honours,
adoration,
worships
and
sanctifications are due to Allah (SWT), the Lord of the world,
nourisher, flourisher and sustainer of my life. The omnipotent and
omniscience whom alone has been existing before any existence,
during other existence by his will be and will be existing after all the
existence exists no more. Who has given me the wisdom,
understanding and ability to
carry out this research
work
successfully. Without his help nothing would have been done.
I consider my obligation to acknowledge and express my gratitude to
my supervisor Mr.A.L. Opoola, for his guidance, assistance and
invaluable support throughout the report. Despite his high schedule
he spare time out of no time to read through the manuscript and offer
constitute critics. May Allah shower upon him blessings (Amen).
Most importantly, my sincere gratitude goes to my late father
Mr.T.A.Oyewo who had committed everything in his possession to
make sure I become a better person in life, may Allah grant him
aljanat fredaous (Amin). Also to my mother Mrs.Oyewo may
Almighty Allah spare her life to reap the fruit of her hard labour
(Amin).
My gratitude goes to my H.O.D. Builder B.A. Lawal for his advice as
a father and my entire department lecturer who impacted knowledge
into me for success, may Allah grant each and every one of you
success in all your endeavours (Amin).
I would like to thank the Department of Building Technology as a
whole for providing me the essential requirements: for example
project guide for the success of the write up.
I would also like to thank my family and all my friends who were
helpful in completing this report by motivating me and supporting me
whenever I needed them, may Almighty Allah grant you all the
answers to your supplications (Amin).
Finally, my humble, best and sincere gratitude goes to my loved one
in person of Rashidat Adebola, for her support and contributions
towards the conclusion of this project, I pray that Allah will bless you
with joy every minute (Amin).
TABLE OF CONTENT
Title page
Certification
Declaration
ii
iii
CHAPTER ONE
1.0
Background of the stud
1.1
Statement of the problem
1.2
Aim and objectives
1.3
Research hypothesis
1.4
Significant of the study
1.5
Scope and limitation
CHAPTER TWO
2.0
Literature review
2.1
Introduction
2.2
The Nigerian constructor industry
2.3
Factors affecting labour productivity
2.4
Making labour cost reduction a reality
2.5
The role of construction actors in construction industry.
2.4.1 The client
2.4.2
The consultant
2.4.3
The contractor
2.6
Cost consideration
2.7
Method of construction
2.8
Labour cost
CHAPTER THREE
3.0
Research methodology
3.1
Introduction
3.2
Restatement of the research objectives and hypothesis
3.3
Research design
3.4
Study area
3.5
Characteristic of the study population
3.6
Sampling design procedures
3.7
Data collection method
3.8
Administration of the questionnaires
3.9
Statistical tools for data analysis
CHAPTER FOUR
4.0
Result analysis and discussion
4.1
Introduction
4.2
Respondent demographics
4.3 Factors affecting high cost of labour in Nigerian Building
Industry
4.4
Ways of minimizing high labour cost in Nigerian Building
industry
4.5
Discussion and finding
CHAPTER FIVE
5.0 Summary, conclusion and recommendation
5.1
Summary
5.2
Conclusion
5.3
Recommendation
Reference
Appendices
LIST OF TABLES
Table
2.1: Factors affecting cost of construction project
Table
4.1: Frequency distribution of respondent by their sex
Table
4.2: Respondent role in construction
Table
4.3: Respondent educational qualification
Table
4.4: Professional qualification of respondent
Table
4.5: Response rate
Table
4.6: Test of agreement on weather labour cost can
bereduced in Nigerian Building Industry
Table
Industry
4.7: How labour cost is rating in Nigerian Building
Table
4.8: Statistical analysis of contractor and consultants
rating of factors affecting labour cost
Table
Industry
4.9: Ways of minimizing labour cost in Nigerian Building
LIST OF APPENDICES
Appendix 1: Letter of Introduction
xx
Appendix 2: Sample Questionnaire
xxI
ABSTRACT
The aim of this research was to identify and rank, according to
relative importance, factors affecting high cost of labour in Nigerian
building industry. Structured questionnaires comprising of various
pre-selected factors were used for data collections. Using a fivepoint likert scale, consultants and building contractors expressed
their views on the relative importance of pre-selected factors on high
labour cost. A total numbers of forty questionnaires (40) where
prepared and administered and thirty five (35) were received. The
data presented were derived from the responses of the respondent
through the use of administered questionnaire it also highlighted the
summary of the findings. It was found that the labour cost is too high,
the labour cost is range between 30-40% of the total construction
cost. The scarcity of tradesman in Nigerian Building Industry is
believed to be the major problem and causes of high labour cost.
CHAPTER ONE
BACKGROUND OF THE STUDY
1.1 INTRODUCTION
The growing need for construction of all types’ coupled with a tight
monetary supply as provide the construction industry with a big
challenges to cut labour cost.The Nigerian construction industry is
one of the major industries that contribute significantly to socioeconomic development, through the design and construction of
infrastructure.
The cost intensiveness of these construction projects require
adequate management of all the resources employed for overall
project success. Cost is the foremost consideration in project
delivery and is regarded as one of the most important criteria of
project success. (Memon, 2010). The need to focus on cost
assessment stems from the fact that, client in Nigerian construction
industry are usually compelled to pay for unbudgeted increase in
project cost at every degrees. Ogunsemi and Dagboro (2011)
attributed such increase in project cost to poor cost anticipation and
allocation.
The task of forecasting project cost is part of project planning and an
incorrect forecast will inevitably lead to ineffective use of resources
(Ujene, 2012). The resources that constitute cost element comprise
material, labour, plant and machinery costs. The attendant dwindling
economic fortune of nations economics around the world have
geared up the participant in these sectors (the client particular) to
make up the challenge of ensuring efficient use of their resources to
obtain value for money in terms of performance.
The total cost of construction in normal circumstances is expected to
be the sum of the following cost, material, LABOUR, site overhead,
equipment, head office cost and profit but in many part of the world
particularly in Nigerian building industry the cost of LABOUR has
occupied almost 30-40% of the construction cost.
This study focus on a group called “tradesman” (craftsmanship and
related work) and will be referred to as “LABOUR”. The tradesman is
the craftsmen or craft operative who is skills in a particular trade.
This trade may be plumbing, masonry (bricklaying, electrical,
painting, woodwork (carpentry), metal work (iron bending) or other
related works. LABOUR has one of the components of the housing
delivering system constitutes of the second largest single component
or resource input required by the building industry. The labour force
in the building industry has been described as exceptionally
important and having a higher level skill. (Jinadu 2004). However
studies have shown that labour in the building industry is scarce,
because few trainees are ready to endure the tenure of training as
an artisan since everyone wants cheap money. (Onibokun 2002). In
addition, available data revealed that the three major supply
categories of labour: the vocation education (formal training), the
traditional vocational training (apprenticeship system) and the on-the
job training (informal training) have not been able to produce
adequate labour supply.
Mbachu and Nicado (2004) have obvious negative implication for the
key stakeholders in particular, and the industry in general. To the
client, high cost of labour implies added costs over and above those
initially agreed upon at the onset, resulting in less returns on
investment. To the consultants, it means inability to deliver valuefor- money and could tarnish their reputation and result in loss of
confidence reposed in them by the clients.To the contractors, in
implies loss of profit through penalties for non- completion caused by
the excessive cost on labour and negative word of mouth that could
jeopardize his/her chance of winning further jobs, if at fault.
The work investigated and reported on the other cost to be allowed
for, which are the basic cause of high labour cost in the building
construction industry; also it proffered solution to how labour cost
can be minimized or controlled.
1.2
STATEMENTOFTHEPROBLEM
The demand for more construction of all types, coupled with a tight
monetary supply has provided the construction industry with a big
challenge to cut the labour costs. The problem of high labour costs is
becoming obvious. Labour accounts for between 30-40% of the
construction cost. Consequently, substantial increases are being
observed in projects.Agboola (2012)
This substantial increase has brought about loss of client confidence
in consultants, due to the excessive cost of labour, inability to deliver
value to clients, and investment in the construction industry. There is
therefore an overwhelming need to investigate this problem if the lost
confidence is to be restored at all.
1.3 AIM AND OBJECTIVES OF THE STUDY
The aim of the study is to examine the cause of high labour cost and
suggest/ proffer solutions to how cost of labour can be minimized.
The objective of the study are as follows:
(1)
To identify the main cause of high labour cost and the effect of
cost in construction
(2)
To determine the labour cost and know the various sources of
labour
(3)
To suggest/proffer solutions on how to minimize high cost of
labour in Nigeria building industry.
1.4 RESEARCH HYPOTHESES
To test the hypothesis:
1(a). Ho: contractors and client do not generally agree on the
severity rank of the effect of high cost of labour in Nigeria Building
Industry
1(b).HI: Contractor and client generally agree on the severity rank
of the effect of high cost of labour in Nigeria Building Industry.
2(a) Ho: Clients and consultants do not generally agree on the
severity rank of the effect of high cost of labour in Nigeria building
industry.
2(b) HI: Clients and consultants generally agree on the severity
rank of the effect of high cost of labour in Nigeria Building Industry.
3(a) Ho: Consultant and the contractor do not generally agree on
the severity rank of the effect of high cost of labour in Nigeria
Building Industry.
3(b) HI: Consultant and contractor generally agree on the severity
rank of the effect of high cost of labour in Nigeria Building Industry.
1.5 SIGNIFICANCE OF THE STUDY
An assessment of the study would enable clients, contractors and
consultants to give an economic approach to construction work that
they would be able to identify the dominating factors leading to high
cost of labour in Nigeria building industry.
The application of the solutions proofed to minimizing the cost of
labour would restore client’s confidence in consultants.
1.6 SCOPE AND LIMITATION
The scope of this research is limited to identification of essential
causes of high cost of labour and suggest/ proffering solutions on
how to reduce labour cost in Nigeria building industry.
Target respondents for this study are the principal actors in the
construction industry namely: the client, the consultant and the
contractor.
CHAPTER TWO
LITERATURE REVIEW
2.0INTRODUCTION
This chapter looks at a review of relevant literature that give a
background of the Nigerian construction industry, the challenges of
high labour cost, causes of high labour cost and remedy.
2.1 THE NIGERIAN CONSTRUCTION INDUSTRY
The construction industry is a strategic industry to the Nigeria
economy providing infrastructure and shelter for other economic
activities to take place. Attar et al. (2012) noted that construction is a
key sector of the national economy for countries all round the world,
as traditionally it takes a big portion in the nation total employment
and its significantcontribution to a nation’s revenue as a whole.
Studies have also shown that, the scarcity of labour in Nigerian
construction industry also contribute to high cost of labour.
Construction industries are still facing a number of problems
regarding low labour productivities poor safety and insufficient
quality(Attar et al, 2012). This is not a healthy situation for the
labour-intensive building industry in developing countries of Africa
and elsewhere. (Umoru and Yaqub 2013)). In Nigeria, labour
productivity growth has been unsatisfactory. In most countries labour
account for between 30-50% of project cost. (Business Day live,
2013)
2.2 FACTORS AFFECTING LABOUR PRODUCTIVITY
Studies over the years have identified a myriad of factors that affect
construction labour productivity in developed countries such as:
Canada (Jergeas 2009), New Zealand (Durdyev and Mbachu 2011)
and developing countries such as Nigeria (Olomolaiyeet al. 2012;
Ameh and Osegbo, 2011; Adamuet al, 2011)
Broadly, labour productivity is affected by external and internal
factors, representing these originating within the firm and those
outside the control of the firm’s respectively. Building provides
accommodation for man and his activities in the built environment
and cost is one of the foremost criteria of their construction success.
Cost consideration is more critical because, clients usually pay for
unbudgeted increase in project cost. (Memonet al, 2010).
Building costs are incurred by a contractor in carryingout works and
its elements include labour, material, plant and machinery cost and
other expenses, categorized into direct and indirect costs. (Amusan,
2011). Studies showed that labour costs vary between 20% and
90%, while material cost very between 10% and 80% among
building trades. (Ujene, 2012).
2.3 MAKING LABOUR COST REDUCTION A REALITY
It is imperative to reduce the cost of construction especially labour
cost to relieve consumers and building owners of this burden, In
addition to the measurement and improvement of productivity,
reducing cost of construction can also come from reducing the
composite labour cost. Reduction of the composite rate of labour
requires mixing un - indentured workers with the skilled trade labour.
To avoid the loss of skilled trade’s productivities due to lower skilled
labour management. The trained skilled worker has to become a
resource manager and understand how applicable to all trades
manage
the
un
–
indentured
labour
group.
The
effective
management of the lower skilled labour starts with breaking down
into three separate categories;
(1)
Activities common among all jobs
(2)
Activities common among the categories of the jobs
(3)
Activities special about a specific job in hand.
These activities must then further be broken down into three
subgroups; (Using electrical works for illustration)

Electrical activities, such as:
(a)
Rough-in
(b)
Wire pulls
(c)
Distribution
(d)
Trim or terminating
(e)
Lights
(f)
Commissioning and testing

(a)
Non-electrical activities that require some skill, such as;
Material handling
(b)
Inventory / receiving
(c)
Prefabrication

Non-electrical activities that require no skill, such as:
(a)
Mobilization
(b)
Digging / trenching
(c)
Garbage / clean-up
To set up the management of the labour, the project manager and
labour supervisor start with the process of establishing a work
breakdown structure (WBS)
2.4
THE
ROLE
OF
CONSTRUCTION
ACTORS
IN
CONSTRUCTION COST
There are diverse interests in the construction industry. The principal
interest or actors in construction industry are:
2.4.1 The client
The client is the most important member of the construction team.
He is responsible for the overall cost of the construction project, he
employee people/workers to construct on his behave and whose
contribution determines the success of the project. The client plays a
vital role in the construction project from the inception to the
completion of the project. The client provides the pre-construction
information (PCI) to the designers and contractors and verifies the
sufficiency of the construction phase plan (CPP) prior to construction
commencement. The client verifies that suitable welfare facilities are
in place prior to construction commencement. The client has a key
influence on the outcome of a construction project because the
project is originated by the client, also on all project the client must
verify that adequate management arrangements are in place to
ensure that the roles, functions and responsibility of all members of
the project team are clear and understood.
2.4.2 The consultant
Cost considerations are among the most important and basic
considerations that consultants must deal with. It is essential to see
that projects are contained within the client’s budget and cost
forecasts. Cost has the final control over virtually every project.
Accurate cost analysis and control is one of the necessary services
the client requires from the consultants.
2.4.3 The contractor
A contractor is an individual who engages in the planning,
developing and coordinating of activities which coincide with the
building of structure. The major task of contractors is to assemble
and allocate the resources of labour, equipment and materials to the
project in order to achieve completion at maximum efficiency in
terms of time, quality and cost.
2.5 COST CONSIDERATIONS
Ruskin (2012) opined that: “it is unwise to pay too little, but it is worse
topay too much” Ruskin went further to say “the relationship of quality to
cost is often expressed in the saying that, you get what you pay.”
Regardless of Ruskin’s advice, cost is a critical factor in most
buildingprojects and some clients will seek a low price low price and
maximum price competition, however, often have negative impacts on
quality standard and achieving best value for money overall. In the
current economic climate below cost tendering has heightened the risk
of contractor insolvency and it may be difficult and expensive to obtain
protection from this risk.
Unrealistic and inadequate budgets often lead to projects becoming
finance driven where cheaper options are preferred to better or more
sustainable alternatives. Certain clients may have fixed budget which
may not be exceeded in any circumstances. In such circumstances the
client will expect the quality surveyor to maintain rigorous cost control
during the project in order to deliver the project within budget. Designer
to achieve such cost limit might curtail the introduction of beneficial
features and or variations which may result excessive running and
maintenance costs later on.
The Lathan Report (2012). Comments on the link between initial and
future costs noting that,, good design does not necessarily involve high
cost and labour cost control does not lead to excessive running
cost/cost overrun.”… Good design and labour costs control will provide
value for money in terms of both total cost and cost in use.
The Egan Report found that 40% of projects exceed their budgets due
to unbudgeted expenses. Other client priorities relate to cost issues.
Certain clients may be bound by standing orders such as a requirement
to accept the lowest tender or obtain a detailed cost breakdown.
2.6 METHOD OF CONSTRUCTION
Ultimately the cost of building project is determined by how much the
successful tendering contractor charges to carry out the work. This is
largely determined by the cost and productivity of the resources
employed in its production. These include: The cost of productive
labour, the price of materials, the cost of plant, the competitiveness of
subcontractors, the cost of running the individual site and the
appropriate contribution towards the cost of running the project as a
whole.
The contractor will also have to allow for contingencies, and apply a
profit margin on which he/she has realistic chance of winning the
contractor.According to (Brook, 2008) a typical breakdown of a
contractor’s cost on aconstruction project may be:i.
Direct work - Labour 23%
ii.
Direct work - Plant 5%
iii.
Direct work – Materials 28%
iv.
Domestic subcontractors 44%
It is obvious that contractors who can minimize these cost will gain
asignificant competitive advantages over their rivals.
2.7 LABOUR COSTS
Generally a direct labour cost tends to offer little room for manoeuvre
for a contractor. There are obvious advantages in trying to replace
labour intensive activities with a cheaper or faster mechanical based
approach.though, many factors responsible for construction cost.
Seeley (2013) identifies a number of factors which affect
construction costs but which can also boost productivity: better
training, realistic performance – based incentives and some of these
factors with their references are combined into one uniform list
arranged alphabetically in the table overleaf.
Table 2.1: Factors that contribute to the cost of construction project.
CONSTRUCTION COST FACTORS
REFERENCES
1.
ESCALATING COST OF MATERIALS
Robert F. Cox (2007)
2.
FLUCTUATION
MATERIALS
Omoregie
(2006)
3.
HIGH COST OF LABOUR
Chan and park (2005)
4.
HIGH COST OF LABOUR
Elinwa and Silas (2010)
5.
LACK OF TIMELY DECISION AND
EXCESSIVE CHANGE ORDERS
Robert F. Cox (2007)
6.
LOW LABOUR PRODUCTIVITIES
Attar et al. (2012)
7.
MATERIAL PROCUREMENT
8.
MODE OF FINANCING BOND AND
PAYMENTS
Oluwoye and Crawford
(2003)
FrimpongOluwoye and
Crawford (2003)
9.
PLANT AND MACHINERY COST
Amusan (2011)
OF
PRICES
OF
and
Ratfost
10. RELATIONSHIP BETWEEN
MANAGEMENT AND LABOUR
Eliwa and silas (2010)
11. SHORTAGE OF MATERIALS
The user’s guide (2005)
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 INTRODUCTION
Sequel to the obvious problem of high cost of labour in Nigeria
construction industry, the aim of this study is to identify the causes of
high labour cost in Nigeria construction industry and also to suggest /
proffer solutions on how this escalating cost can be minimized, in
achieving the above, the following steps were followed:
(i)
Identification of the problem
(ii)
Definition of the problem
(iii)
Delimitation of the problem
(iv)
Analysis of the problem
(v)
Deduction of the problem
3.2 RESTATEMENT OF THE RESEARCH OBJECTIVES AND
HYPOTHESIS
The objective of this study are as follows:
(i)
To identify the main causes of high labour cost in construction
industry
(ii)
To determine the cost of labour and know the various source of
labour
(iii)
To proffer solutions on how to minimize high labour cost in
Nigeria construction industry
The research also aims to test the hypothesis that:
(i)
Contractors and clients generally agree on the severity rank of
the factors affecting high labour cost in Nigeria construction industry
(ii)
Consultants and clients generally agree on the severity rank of
the factors affecting high labour cost in the Nigerian construction
industry
(iii)Consultants and contractors generally agree on the severity rank
of the
factors affecting high labour cost in Nigerian construction
industry
3.3
RESEARCH DESIGN
The research design for this work is cross-sectional survey
design.
3.4
STUDY AREA
The study area for this research is Osun state. The choice of Osun
as the study area is because Osun state is a relatively ‘built-up’
environment with many infrastructures like roads, sky scrapers,
estates,
government
establishments,
all
kinds
of
private
developments, schools, hospitals, Theaters, Cinemas, Shopping
malls as well as constructions company to mention but few. All these
infrastructures are handiwork of construction. In a nut shell the, it is a
better place to obtain data for this study.
3.5
CHARACTERISTICS OF THE STUDY POPULATION
The population of the study consisted of clients, consultants and
contractors. But this study covered mainly consultants and
contractors in particular.
3.6
SAMPLING DESIGN PROCEDURES
Having identified consultants and contractors as the target groups for
the effective conduct of this research, forty (40) respondents
comprising of eighteen consultants and twenty-two contractors were
randomly selected using stratified random sampling technique as a
type of probability sampling in order to give everyone that falls into
any of these identified target groups equal and independent chance
of being included in the sample.
3.7
DATA COLLECTION METHOD
The sets of instrument were used to obtain data for this study
namely primary data which refers to as field data were obtained by
the use of well-structured questionnaire.Secondary data were
obtained through the review of relevant literatures in the course of
carrying out the research.
Generally, the scales of the variables were nominal and ordinal
scales.The questionnaire was validated by my supervisor before its
administration take place.
3.8
ADMINISTRATION OF THE QUESTIONNAIRE
The descriptive survey method was used, where forty well-structured
questionnaires were distributed among the principal actors in the
construction industry namely: The consultant and the contractors.
Data collected were processed using statistics package for social
sciences (SPSS) version 17, to obtain the mean rating (MR), having
carefully completed the variable view and imputed the extracted data
appropriately on the data view. Mean rating (MR), standard deviation
and spearman rank order correlation was used to achieve the stated
objectives
The mean rating is defined as
MRj; = ∑5 RSJK x RJK
TR
Where, K = 1
MRJ = Mean Rating for Constraint Factor J;
RPJK
= Rating Point K (Ranging from 1- 5);
RJK = Responses to rating point K; for Constraint Factor
TR
= Total responses.
CHAPTER FOUR
RESULT ANALYSIS AND DISCUSSION
4.1
INTRODUCTION
This chapter focuses on the analysis of the various responses from
the administered questionnaires and deductions made from the
analysis.
4.2
RESPONDENT’S DEMOGRAPHICS
A total number of forty (40) questionnaires were prepared and
randomly administered. The respondents were made up of
consultants and contractors (Eighteen questionnaires to consultants
and twenty two to contractors) which made up of (45% for
consultants and 55% for contractors) respectively. As at time of
compiling this report, a total of (35) thirty-five valid questionnaires
were
received,
representing
87.5%
valid
response
rate
in
percentage. The demographics of respondents who participated in
the study shows that they had relevant technical experience to
provide valid assessments of the factors affecting cost to labour as it
presented in the questionnaire. The maximum responses from each
sampling frame are shown in table 4.1 below.
Table 4.1: Frequency distribution of respondent by their sex
SEX
FREQUENCY
PERCENTAGE (%)
MALE
30
85.7
FEMALE
5
14.3
TOTAL
35
100
Source: Field survey, 2016
Based on the above table which shows that 85.7% of the
respondents were male and 14.3 were female. This shows that there
are more male in the construction field than female.
Table 4.2: Frequency distribution of respondents’ role in
construction
SPECIALIZATION
FREQUENCY
PERCENTAGE (%)
CONSULTANTS
15
42.
CONTRACTORS
20
57.1
TOTAL
35
100
Source: field survey, 2016
The above table 4.2 shows that majority of the respondent are contractor
Table 4.3: Frequency distribution of
educational qualification.
the
respondent by their
EDUCATIONAL QUALIFICATION
FREQUENCY
PERCENTAGE
(%)
(OND) ORDINARY
NATIONAL
DIPLOMA
(HND) HIGHER NATIONAL DIPLOMA
5
14.3
9
25.7
BSC /B TECH/ PGD
9
25.7
MSC
12
34.3
TOTAL
35
100
Source: field survey, 2016
It is obvious from the table 4.3 above that majority of the respondent are with
MSc. qualification
Table 4.4: professional qualification of respondents
PROFESSIONAL QUALIFICATION
MNIOB
MNIQS
MINIS
MNIA
OTHER
TOTAL
FREQUENCY
10
13
05
07
00
35
PERCENTAGE (%)
28.6
37.1
14.3
20.0
00.0
100
Source:field survey, 2016
Table 4.4 above shows that majority of the respondents are members of the
National Institute of Quantity Surveyor.
Table 4.5: Response Rate
NO
DISTRIBUTED
NO
RECEIVED
PERCENTAGE
CONSULTANTS
18
CONTRACTORS
22
TOTAL
40
15
20
35
83.3%
90.%
87.5%
Source; field survey, 2016
To determine the percentage received by both consultants and the
contractors, implies
Consultants
No received
Percentage received (PR) = total number received × total percertaege received
15
35
15
× total percentage received= 35 × 87.5 = 37.5%
Contractors
No received
Percentage received (PR) = total number received × total percertaege received
20
20
× total percentage received= 35 × 87.5 = 50.00%
35
Total Percentage Received (TPR)
= Percentage Received by the consultants plus the percentage
received bythe contractors = 37.5 + 50 = 87.5%
The demographic profiles of the respondents in the calculations
above shows that 37.5% of the respondents were in the consultant
category and 50% in the contractor’s category.
It is obvious from the figure 4.6 above that MNIQS make the largest
chuck of construction for this research with 37.1%, MNIOB are next
with 28.6% followed by MNIA accounting for 20% and MNIS with
14.3%.
SECTION B
Table 4.6:Test of agreement on weather labour cost can be
reduced in Nigerian Building Industry or not
RESPONSE
FREQUENCY
PERCENTAGE
AGREE
8
22.9
DISAGREE
7
20.0
STRONGLY AGREE
20
57.1
STRONGLY DISAGREE
-
-
TOTAL
35
100
Source: Field Survey, 2016
The above question was set up to test both contractors and consultant
weather labour cost can be reduced in Nigerian Building Industry. The
analysis of the respondent is shown in table 4.6 above.Table 4.6
above reveals that 22.9% of the respondent agree that the labour cost
can be reduced and 57.1% of the respondent strongly agree that it
can be reduced while 20% of the respondent disagree that the
labourcost can be reduced in Nigerian building industry.
It can be concluded based on the above result from the different
group i.e. contractors and consultant with respect to their
perceptions that labour cost can be reduced in Nigeria building
industry.
Fig 4.1 above shows the response of the respondent on whether the
labour cost can be reduce in Nigerian construction industry.
Table 4.7below shows frequency distribution on how labour cost is
rating in Nigerian Building Industry by different group i.e. contractors
and consultants
Table 4.7: Frequency Distribution of Labour Cost Rating in the
Nigerian Building Industry
RESPONSE
V. HIGH
V. LOW
LOW
MODERATE
TOTAL
FREQUENCY
20
5
10
35
PERCENTAGE (%)
57.1
14.3
28.6
100
Source: field survey, 2016
The table shows the result on how labour cost is rated in Nigerian
construction industry.The revealed that 57.1% of the respondent
rated the labour cost very high and 14.3% of the respondent rated
the labour cost low while 28.6% of the respondent rate the labour
cost moderate respectively.
It is obvious from the above result that labour cost as a fraction of
total construction cost can be said to be too high.
4.3 FACTORS AFFECTING HIGH COST OF LABOUR IN
NIGERIAN CONSTRUCTION INDUSTRY
The study noted that numerous factors implying on high labour cost in
Nigerian construction industry. A combined analysis of such factors is
provided on table 4.8 based on highest ranking factors.
Table 4.8Statistical analysis on contractors and consultants
rating offactorsaffecting labour cost in Nigerian building industry
table
FACTORS
LABOUR
SCARCITY
LACK
OF
LABOUR
EXPERIENCE
INSUFFICIENT IN
SUPPLY
OF
MECHANICAL
EQUIPMENT
UNCONTINUOUS
FLOW OF JOBS
LACK
OF
TRAINING
SESSIONS
OVERALL OVERALL
MEAN
RANK
4.392
1
CONTRACTORS
MR
R
4.378
1
CONSULTANTS
MR
R
4.325
1
4.023
3
3.905
5
4.182
2
4.272
2
4.091
3
3.976
5
3.905
4
4.136
2
4.047
4
3.395
5
3.914
4
4.092
3
Table 4.8 aboveshows five (5) most important factors affecting
labour cost in Nigerian building industry as perceived by contractors
and consultant. They both rank labour scarcity as (4.378, 4.326
respectively), lack of labour experience (3.905, 4.182 respectively),
insufficient in supply of mechanical equipment; (4.091, 3.976
respectively),
uncontinous
flow
of
jobs
(4.136,
4.047
respectively)and lack of training sessions as (3.914, 4.092
respectively)
4.4
WAYS OF MINIMIZING HIGH COST OF LABOUR IN
NIGERIANBUILDING INDUSTRY
Table 4.9: Ways of Minimizing High Labour Cost
S/N
WAYS OF MINIMIZING HIGH LABOUR COST
NO
MEAN
RANK
1
Establishment of vocational schools by government
35
4.02
1
2
Adequate supply of labour to the Nigerian Building industry
35
3.29
2
3
Proper training seasons and advancement of labour cost will reduce high
labour cost in Nigerian Building Industry
35
3.71
3
4
Adequate supply of mechanical equipment will increase labour productivity,
hence it will reduce labour cost
35
3.69
4
5
Continuous flow of job will reduce high labour cost
35
3.67
5
6
Establishment of training through indigenous apprentice system will reduced
high labour cost
35
3.67
5
7
Sufficient equipment and training of more teachers in vocational schools to
enhance the knowledge of apprentice/ trainee
35
3.65
7
8
Government focus on skills development recently would eventually lead to
abundance of labour for the Nigerian Building Industry in the nearest future
Source:field survey, 2016
35
Table 4.9aboverevealed a general view of the two parties on the
mosteffective ways of reducing high cost of labour in Nigerian building
industry. The eight (8) most effective measure of minimizing high cost of
labour are as follows:
(i)
Establishment of vocational schools by government
(ii)
Adequate supply of labour to the Nigerian Building Industry
(iii)
Proper training seasons and advancement of labour will reduce high
cost of labour in Nigeria Building Industry
(iv)
Continuous flow of job will reduce high labour cost in Nigerian
Building Industry
(v)
Adequate supply of mechanical equipment will increase labour
productivity, hence, it will reduce labour cost
(vi)
Establishment of training through indigenous apprentice system will
reduce high labour cost
(vii)
Sufficient equipment and training of more teachers in vocational
schools to enhance the knowledge of apprentice / trainee
(viii)
Government focus on skills development recently would eventually
lead to abundance of labour for the Nigeria Building Industry (NBI) in
the nearest future.
4.5
DISCUSSION AND FINDINGS
The two parties are of opinion that labour scarcity is the most
important factor affecting high cost of labour in Nigerian Building
Industry. This is in consonance with the finding of Abduaziz and alJumairah (2002) about the factors contributing to high cost of labour
in Saudi Arabia. Omoregie and Radfor (2005) came to same
conclusion after they studied the factors responsible for high cost of
labour.
3.34
8
Contractors are of the opinion that inadequate in supply of
mechanical equipment will affect the cost of labour.Consultant rank
lack of training seasons second and the same factors way rank forty
by contractors. Consultant rank lack of labour experience as the third
most important factor affecting high cost of labour and it was
however ranked fifth by the factor contractors.
Contractors believe that inadequate in supply of labour to the
Nigerian building industry also has a very significant effect on the
high cost of labour. They both rank it sixth most important
factors.The most effective method of minimizing high labour cost in
Nigerian Building Industry as perceived by the two parties is
adequate supply of labour to the Nigerian Building Industry,
establishment of vocational schools by government, proper training
seasons and advancement of labour, government focus on skills
development recently would eventually lead to abundance of labour
for the Nigerian Building Industry (NBI) in the nearest future.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1
SUMMARY
The issue of the high cost of labour in construction industry is
important to the vast majority of construction clients. This study has
outlined the major factors affecting high cost of labour. In whole, high
construction costs most especially labour costs have obvious
negative implications for the major actors in particular, and the
industry in general. Project abandonment, drop in building activities,
bad reputation and inability to deliver value for money and inability to
secure project finance are all implication of high labour cost.
However, application of the proffered solution would restore client’s
confidence in consultants and contractors reduce investment risks
and generally boost the viability and sustainability of the industry.
5.2
CONCLUSION
Labour is a key resource on building projects and effective
management of the resource to achieve optimal productivity cannot
be overemphasized. The construction industry is mostly labour
intensive and therefore, this study sought to identify the key factors
affecting high cost of labour in construction industry. Available
evidences borne out of the research results do show that labour
scarcity is the precursor of high labour cost which occupied between
30-40% of the construction cost. Structured questionnaires were
used to get the opinion of contractors and consultant on the relative
impact of pre-selected factors on high cost of labour in construction
industry. Stratify random sampling was used to select consultants
and contractors registration database of their respective profession.
A total of 40 questionnaires were prepared and administered among
the principal actors in the construction industry namely; contractors
and consultants. The analysis was extended to look at the relative
importance of factors on high labour cost. Accordingly, any move to
increase labour supply in construction industry should be pursued.
5.3
(i)
RECOMMENDATION
Labour cost in Nigeria construction industry will be reduced with
government contribution by introducing a vocational schools for
people who are interested to learn a particular trade.
(ii)
Government focus on skills development recently would eventually
lead to abundance of labour for the Nigerian Building Industry in the
nearest future.
(iii)
Training through indigenous apprentice system is not expensive
hence it should not be ignore
(iv)
Performance appraisal and rewards for achieving or exceeding
targets
(v)
The contractor should create stick work rules, implementation of a
well define system of rewards and punishments to control workers
on construction site.
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APPENDIX 1
APPENDIX 2