THE CHALLENGES OF REDUCING LABOUR COST IN NIGERIA BUILDING INDUSTRY (A CASE STUDY OF OSUN STATE)

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 five-point 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 socio-economic 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 value- for- 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.