The Major Projects Association (MPA) last week held its latest event on gender balance examining “three things that work”. PwC, Royal Mail Group and HS2 Ltd shared their experiences of improving diversity and inclusion with attendees and I summarised the event for the MPA in a report that can be viewed here
As usual the content of the meeting was thought provoking and useful, with each company outlining initiatives that were improving their businesses, but there was a recurrent issue that the meeting kept visiting – flexible working.
There are many reasons why employees, particularly female employees, need to work flexibly. But there are also many reasons why they may not feel comfortable asking to do so. From a fear that they many be viewed as less committed, or a (reasonable) expectation that the request will be rejected, many people don’t make flexible working requests. Some will then struggle to work the hours required, others will simply leave. Both scenarios are bad for business. And yet as Pauline Broadway, business change director at consultant Afiniti pointed out, flexible working is a two way street benefiting both business and employee. With strong communication, good planning and continuous reviewing, teams can operate highly successfully with members that may be part time, work in different locations or work alternative hours.
In fact Andy Woodfield, partner at PwC and leader of the company’s successful reverse mentoring programme, observed that when employees worked flexibly the whole team’s performance improved. Why? Because the flexible employee uses their working time as effectively as possible motivating the team around them and driving progress.
Of course there are many companies that have not yet come around to the benefits of flexible working, or believe that they can’t accommodate it. But these are not reasons not to ask for it.
With two young children myself I always work flexibly and I am proud to do so. Maintaining my career while supporting a family is a difficult balancing act, requiring intense focus that was not so crucial when I had more time on my hands.
The growing number of success stories of flexible working, the need for companies to ensure that they retain more female staff, the acknowledgement that diverse companies are more profitable, and the technology revolution that enables us to be “in the office” from anywhere means that there are more opportunities than ever for people to work flexibly, so don’t be ashamed to ask. It might even be better for the company too.
Demand for rough terrain cranes fluctuates along with the oil price meaning that manufacturers of these versatile, robust lifting machines have had a hard time of it lately. In fact mobile cranes in general have been hard hit as the oil price maintained a steady fall since 2014. So how are manufacturers managing the soft market? Cranes Today magazine asked me to find out.
The answer is that manufacturers are doing a lot. From improving their own production methods and product designs to reducing prices and launching new machines, there is a lot going on in this segment. I was particularly interested to learn that most of the investment in new cranes is being aimed at the higher capacity end of the market from 80T upwards. Greater capacities and longer booms are where the development effort is focussed. To find out who is launching what, which booms are longest and what is new look out for the July issue of Cranes Today.
If you are a woman working in engineering, (or any other job for that matter), it is likely that your male colleagues are getting paid more than you. This is particularly true for women over 40, according to figures from the Office for National Statistics, which estimates the average gender pay gap (between median salaries) in the UK to be 19.2% rising to 35% for over 40s.
Is this true for your company? Noone knows – YET! Current reporting requirements are voluntary and only five companies have bothered to do the maths (well done Tesco, PwC, Deloitte, Genesis Housing, and Friends Life). But this is changing and becoming mandatory. From April 2018 anyone working in a firm with over 250 employees in the UK will know exactly what the gender pay gap is because firms are going to have to report it both as an average and a median value. These numbers will be published by the government and ranked in sector based league tables.
For companies in engineering, infrastructure and construction the gaps are going to be big – huge in fact. Thanks to the great work done by the IET we know that only 6% of engineers are female. We also know that this is a sector which struggles to recruit and retain women so the high salaries are going to male employees. And for all of the excellent work that some companies are doing to encourage more diversity into the sector, there are still many firms that don’t think they have a problem.
This reporting requirement then is set to be a wake up call for companies to address the cultural and structural issues that have historically ensured that men progress to higher positions and get paid more. Financial security company Friend’s Life for example has used its gender pay gap data to recognise that its talent pipeline was weighted towards men and introduced a range of measures to support women moving into senior roles. As the firm said: “We take the old adage, ‘What gets measured, gets managed’, one stage further. We believe that, ‘What gets published, gets managed better’.”
It is therefore going much further than the mandatory reporting requirements and examining:
Workforce profile overall, at management levels and by grade
Gender pay gap by grade
Employee engagement response rates and scores
Length of service by age group and gender
Sickness absence levels
Sickness levels by major disease state
Grievance cases by gender, including cases upheld
Employee Assistance Programme uptake
Duration of absences over one month
Its efforts have already led to an increase in women in senior roles at the company – something that engineering firms could learn from.
Last week I was at a session on the new reporting requirements run by the Employment Law team at Clyde & Co, which was organised by the Major Projects Association as part of its Gender Balance Initiative. The big message from this to firms was ACT NOW. Although the reporting deadline is April 2018 the pay data has to be taken from April 2017. So if companies want to know what their gender pay gaps look like before being forced to reveal them (and explain them) to the entire world then undertaking a trial run is a good idea. Whether companies will do this or not remains to be seen but the clock is ticking and those that make the effort to understand, and act, on the issues will be identified as the most inclusive, and attractive to women. And for engineering companies seeking to both meet the skills gap and diversify their organisations this will be a huge advantage.
A summary of the MPA gender pay gap reporting event is available here
How will the low oil price affect the dynamic construction markets of the GCC in 2016? This was the question that MEED set out to answer in one of the biggest projects that I have worked on this year – an analysis of the outlook for GCC construction. The full report can be purchased here
Not surprisingly given the record lows in oil prices the overall climate is one of fiscal belt tightening. Capital expenditure overall is set to fall as budget deficits rise. Data from MEED Projects showed that in 2015 awards worth $88bn were made, a 22 per cent reduction on 2014. Forecasts for awards from MEED Insight show a further, although much less pronounced, drop in 2016.
The findings for the individual GCC markets were as varied as the countries themselves. In 2015 the UAE recorded its first fall in project awards since 2011, whereas Kuwait reached an all time peak. However with the £4.3bn contract award for Kuwait’s airport expansion rejected by the State Audit Bureau, the market remains challenging from a bureaucratic perspective. By the end of 2015 Saudi Arabia had already begun cutting back spending and started to put projects on hold. More of this is expected in 2016 with the budget for transport reduced by an enormous 60 per cent. Doha and Dubai meanwhile pledged to increase spending in 2016.
“Whoever can help Iran modernise its construction sector will be in a good position to develop business in Iran.” said Dr Bijan Khajehpour, managing partner at Austrian based consultant Atieh International when I interviewed him for MEED’s “Opportunities Iran” insight report.
The report offers an extensive overview of the business needs across all key business sectors. My research focussed on construction and I was fortunate enough to talk to leading engineers and consultants who shared their view on the needs of the country. Below is a brief summary, but for the full report and for information on other important sectors follow the link to MEED.
Iran’s construction industry has had a challenging few years. Not only has the country, and the sector, come through a recession but economic pressures including the removal of energy subsidies and the effect of sanctions forced up the price of construction commodities and made materials and equipment more difficult to obtain. The property market, traditionally a key investment option for Iranians, was hit hard by the devaluation of the Riyal and a disastrous social housing programme which absorbed liquidity that would otherwise have financed other real estate investments.
Despite this construction’s contribution to GDP remained stable at around 9 per cent over the past five years contributing 863,908 billion Riyals in 1392 (2013/2014), equivalent to around $35bn. But in real terms the sector shrank along with national GDP. The World Bank reports that productivity in construction declined by 3.6 per cent in 2012 and 3.1 per cent in 2013 as imports of construction materials dropped and inward investment dwindled.
The sector then is ready for some good news and the lifting of sanctions which will bring increased revenues from unfrozen assets and increased oil production, has come at a welcome time. “Both in terms of transfer of technology and access to better financial solutions, the lifting of sanctions will be very good news for the construction sector,” said Dr Khajehpour, managing partner at Austrian based consultant Atieh International, who was talking to me ahead of sanctions being raised. His firm has been advising investors in Iran for over 20 years. “Once sanctions are lifted Iranian banks will have better access to international banks and funds, and can extend better and smarter facilities to constructors,” he says.
Government spending may dominate social infrastructure but in the real estate sector small private investors prevail and renewed activity is expected here too. “Now we are going to see a phase of new investment and higher demand for housing units because now the feeling is that sanctions will be lifted, construction materials will be more easily available and potentially a bit cheaper. There will be demand and a flow of both Iranian diaspora going back and international companies going to Iran.”
Housing and residential development in particular has experienced a turbulent decade and today there remains a mismatch between supply and demand with an estimated shortage of 1.3 million residential units. In an effort to solve this the Ahmadinejad government created the Mehr social housing scheme. Launched in 2007 the aim was to bring 2 million homes to low income families over a five year period – a scheme so huge that private investors stepped away from the low income market. The model saw the government give land to developers and contractors to build on with finance provided by the state’s housing bank, Maskan Bank. Buyers had to raise 100 million Riyals as a deposit, the housing bank then paid the contractors to build the units. When completed the property and the debt were transferred over to the new owners who would pay back the loan and make a monthly rental payment to government for the 99 year land lease. “Initially citizens in need of social housing believed in it. Some families used all of their savings to participate. They really believed that the government would deliver but when news started coming in that they were not delivered on time or the quality was not good a lot of people stopped signing up,” says Khajehpour.
Financially the scheme encountered many issues. Bank Maskan relied on credit lines and other financing facilities from Iran’s Central Bank and this demand quickly accelerated from 50 trillion Riyals in 2008, which at the exchange rate of the time would have been around $5.1bn; to 150 trillion Riyals or around $14.5bn in 2010. This rose again to 450 trillion Riyals or $36.6bn by the end of 2012 by which time electricity subsidies had been removed significantly increasing construction costs (see chart). According to the IMF the housing bank was absorbing around 40 per cent of Iran’s base money.
Looking to the future Mehr can offer many lessons for the new schemes which must be built if local demand is to be met. “Mass production was a good idea and necessary,” says Mohammad Mehdi Banaei, a systems dynamics and public policy specialist at the Ifsahan University of Technology, who has written several papers on the scheme. “When you do something in a hurry it is possible that you don’t consider all aspects of it and Mehr was like that.”
As the government grapples with the low income housing shortage investors are expected to turn to more lucrative markets such as high rise offices, hotels and hospitality related developments. International hotel chains are understood to be exploring major cities already.
Such developments could also see larger development firms enter the market, which has traditionally been dominated by smaller investors. Khajehpour says this is less to do with the size of development and more to do with new energy efficiency requirements. “Since energy and fuel subsidies were partially lifted, there is a focus on energy efficiency. There are hundreds of new regulations on what materials you have to use, what windows you have to use, what kind of energy efficiency standards have to be observed in larger cities. Urban construction projects have become too complex for the average small scale investor and that is why I see the necessity to move towards larger companies,” he says.
The requirements for buildings are covered in chapter 19 of the Iranian building code. “It has become mandatory in the past few years and it is anticipated to have a large effect on the energy consumption of the buildings in Iran,” says Nader Shokoufi, a structural engineer at Iran’s Tavon Consulting Engineers and a former chairman of the Young Managers Group of the Iranian Society of Consulting Engineers. He explains that many of Iran’s buildings lack proper insulation but rising energy prices and the new regulations mean a new focus on efficiency. Added to this are several government initiatives that are also stimulating activity. A clause in the annual budget allows the Ministry of Petroleum to invest in energy saving measures with a view to boosting exports. This year $2bn is expected to be invested. “Through this clause, the government insures the investment and promises to repay the investment by paying back the export price of the energy saved, so the facility that does an energy saving can get double savings, one through saving on the energy bill and one through getting back the money saved based on the export price of the energy,” explains Shokoufi. To verify the work the Ministry is looking for at least 500 measurement and verification companies to validate the work of the newly emerging energy saving companies (ESCOs). “A good market is opening up in this field,” says Shokoufi.
At the same time a new organisation for new energies is working on new forms of contract for renewable energy focussing on wind and solar. Further clauses to help investment in solar heating and PV panels are also being developed.
Such developments then are bringing new investors and companies to Iran. “You have completely new dynamics in energy efficiency and environmental solutions which is actually welcome news,” said Khajehpour.
Happy new year one and all. My research this week is dominated by the GCC construction market for MEED which ties in nicely with a feature that I am writing on the demand for cranes in the Middle East region for Cranes Today. The low oil price is of course affecting all markets but the impacts vary greatly. Government spending is expected to fall but there are some commitments, such as social infrastructure and event related building that will continue and grow.
As ever in the Middle East there are exciting examples of technically ambitious and challenging work. In Jeddah Mammoet came to support local contractor Nesma Trading by moving this mosque – yes a whole mosque. In one piece. To make way for a new hospital project.
The clever engineering team jacked up the 2400t mosque and slid it 120m out of the construction site thus saving the 30 year old building from being demolished.
More to come on this in February issue of Cranes Today.
One of the recent reports that I have worked on for Middle East Economic Digest (MEED) is all about executive education in the GCC. Despite the low oil price business schools and universities are continuing to report strong demand for their courses. Bespoke corporate training courses are particularly sought after as companies take advantage of the growing number of regional providers and a willingness to adapt content to suit the corporate customers.
For the overview of the executive education guide I spoke to many of the region’s business schools to find out how they were adapting to the regional dynamics. I found that although the sector remains one of growth and much activity, issues remain. Programmes have been put on hold by some clients, particularly those in the energy sector who have felt the impact of falling oil revenues most keenly. And some schools report a drop in corporate financing for their MBAs with fees paid privately instead. But rather than dropping off it seems that opportunities in executive education are evolving with companies becoming more discerning about the kind of training that they want for their employees. Creating and delivering this invariably requires the support of business schools, universities or professional service firms and will ultimately add to the depth and number of options available, which can only be a good thing for the region’s expanding economies.
Some of the more interesting news stories I’ve written in the last couple of weeks include claims that the Northern Powerhouse needs £50bn in infrastructure investment if the plans are to be realised; ICE Scotland revealed its concerns over the dwindling energy generation capability and called for a more robust debate on policy; draft regulations for the Flood Re insurance scheme were approved by the House of Lords and Tomorrow’s Engineers week was celebrated for the third time with new research underpinning activities.
Investment in northern infrastructure must rise to £50bn if Northern Powerhouse ambition is to be realised says new IPPR North State of the North report.
ICE Scotland’s comprehensive review of infrastructure has highlighted critical energy issues and a £2bn road maintenance backlog. With an excess supply of just 1.2% in 2015/2016 from 4.1% today Scotland is facing major issues in its energy sector said the ICE Scotland State of the Nation report. At the same time a third of Scotland’s roads are considered to be in an “unacceptable” condition with the maintenance backlog standing at £2bn.
Two draft statutory instruments that will outline technical aspects of the flood reinsurance scheme and designate Flood Re as the scheme administrator, were approved by the House of Lords following debate of the regulations last week.
This week I’m looking at sustainable building design, climate change issues and the steel crisis – and I’ll also be looking at a feature on a new kind of crane that is set to rival the all terrain machine.
Oman’s transport sector is on the brink of a massive $15bn project to build its first ever railway. Middle East Economic Digest asked me to update readers on its progress.
By the end of 2015 construction is scheduled to commence on Oman’s first railway line which will ultimately see the Sultanate’s three deepwater ports at Sohar, Duqm and Salalah connected with each other and the rest of the GCC. In its first phase the new 2,135km network is designed to link in to the GCC network at Al Ain at the Abu Dhabi border with a second link in the north connecting Sohar Port to Khatmat on the border with Fujairah – but this is a more long term proposal.
Oman Rail is progressing its multi staged, dual track, passenger and freight rail project with contracts for the first major 207km section put out to tender in September 2014. Technical bids followed in January 2015 with commercial bids submitted by March. Known as segment one the first package of works includes three elements: a 135km link running east to west between the Port of Sohar and the UAE border in Al Ain; a 34km link running north to Al Buraimi and a further 38km spur to a new railway yard north of Sohar.
My six year old saw me looking at the heartbreaking image of the three year old boy who drowned during a perilous voyage to Europe. “Is that boy dead?” he asked. For a split second I thought about making up a lie that would be easier for him to process. But I decided that sometimes life’s lessons are better taught reactively. “Yes,” I said.
“What happened to him, did he drown?” he said. I sat him on my knee and took a deep breath. “He did drown. He was trying to get to Europe to find a safe place to live but his boat capsized.”
“Where are his Mum and Dad?” he asked. I told him that I didn’t know. He looked away then. I told him that the boy lived in a place where there was a war, where people were fighting and he and his family were trying to get away. I told my son that he is lucky to live somewhere that is at peace and that the little boy in the photo wanted to come and live somewhere like this. ”Did he have swimming lessons?” asked my six year old. I told him that I didn’t know but that the boy was only three and even if he did have swimming lessons the sea was too cold and the waves too strong for children to be able to stay afloat for very long. The boy wasn’t wearing a life jacket – which tells us so much about the human traffickers that are not only exploiting the tragedy of the displaced people but are multiplying it many, many times over.
This was enough sadness for my six year old who got down from my knee and went back outside to play football, which is perhaps what the boy would have done if he had made it across the sea. Media reports later explained that he, his five year old brother, his mother and his father were all heading for Canada. The boy’s aunt lived there and she was waiting for him and his family. But according to The Guardian the government had rejected the asylum application. To get to Canada the family then turned to the ruthless smugglers who took their money and then sent them to their deaths.
I don’t know if I did the right thing in explaining this to my son. But sadly this is the world we live in. I would rather show him the news and teach him compassion than let him watch reality TV and learn that fame means you can launch a perfume and call it a career.
Meanwhile pressure is mounting on the UK government to allow more refugees into the country and on the European Union to create a coordinated approach to the crisis. According to the UN Refugee Agency (UNHCR) 300,000 refugees have tried to cross the Mediterranean so far in 2015 and 2600 of them have died. “The vast majority of those arriving in Greece come from conflict zones like Syria, Iraq or Afghanistan and are simply running for their lives,” said Antonio Guterres, high commissioner for refugees at the UNHCR in a statement today (4th Sept). He called on EU states to come together and create a common response implementing a mass relocation programme with the mandatory participation of all EU member states. This would replace the current piecemeal approach which is exacerbating the situation allowing pressure to mount at crisis points such as Greece and Hungary. “Thousands of refugee parents are risking the lives of their children on unsafe smuggling boats primarily because they have no other choice. European countries – as well as governments in other regions – must make some fundamental changes to allow for larger resettlement and humanitarian admission quotas, expanded visa and sponsorship programmes, scholarships and other ways to enter Europe legally,” said Guterres. “Crucially, family reunification has to become a real, accessible option for many more people than is currently the case. If these mechanisms are expanded and made more efficient, we can reduce the number of those who are forced to risk their lives at sea for lack of alternative options.”