This write-up is divided into four parts. The first three parts pertain to labour productivity in the construction industry across the world. The last part is based on reflections related to the engagement of UKaid Skills for Employment Program (SEP) in skilling human resources in the construction industry.
Skills and Productivity in the Construction Sector
Formalising Nepali Construction Industry Workforce
Approximately 1 million people are estimated to work in this industry. While workforce in most sectors in Nepal engage informally, this trend is even more salient in the construction sector. This has encouraged non-Nepali workers to be predominantly hired.
The construction industry across the world appears to be incapable of being innovative, compared to industries such as retail and manufacturing. A report from McKinsey & Company states global labor productivity growth in construction has averaged just 1% per year over the past two decades, compared with a growth of 2.8 percent for the total world economy and 3.6 percent in the case of manufacturing. The case for Nepal may be even more dire.
Need of Skilling as well as Upskilling
The needs of the construction industry are complex. The construction process is a complex one starting with planning and design through construction, commissioning to operations and maintenance. There is a very wide spectrum of roles and corresponding skills that needs to be covered for a truly capable workforce in this sector.
While there is scope for skilling a large number of workforce entering the job market each year, a considerable segment of workforce already engaged are in need of upskilling.
The Staggering Potential for Job Creation in the Sector
It is not far-fetched to argue that Nepal currently has a very low stock of needed infrastructure. This means there is immense scope for growth for this industry. Bi-lateral investors from China, India and other countries, and multilateral investors have been interested to be involved in Nepal’s infrastructure industry, reflected in the new projects.
Skilling Workforce in Construction Industry
Multiple construction projects like hydropower, airport, road, and irrigation, among others are underway in the country which have led to a significant rise in demand for heavy equipment operators—indicative of the potential to create direct employment for a large number of operators and mechanics. However, there is a stark shortage of skilled and licensed human resources to operate and maintain heavy equipment. In this backdrop, UKaid सीप and Morang Auto Works Private Limited (MEPL) came together to establish and enhance the capabilities of heavy equipment operator- and mechanics- training centres to build stronger skilling and livelihood creation for the vulnerable population in the country. The same was made possible through a strategic partnership with JCB.
Going forward, UKaid सीप will explore opportunities to engage with the largest construction companies and others to skill and place in an increasing number of job roles in the construction industry.
WSP’s Interest in the Nepal Market
WSP is a globally recognized professional services firm. Throughout 2019-2021, we welcomed experts from 14 different acquisitions – including the transformational acquisition of Golder, a global consulting firm with over 60 years of experience in providing earth sciences and environmental consulting services. These acquisitions allowed us to add expertise in all our operating regions and to enter new markets, while the addition of Golder significantly increased our workforce by approximately 7,000 people. Together we represent the leading global environmental consulting firm with approximately 14,000 of our 55,000 professionals dedicated to accelerating the world’s green transition.
Finally, as there is considerable scope of further industrial development in Nepal, there is a possibility for WSP Global to bring premier engineering expertise to Nepal’s several key areas of infrastructure planning, design, climate financing, renewable energy, roads, sustainability, water and wastewater. WSP already has a strong foothold in India, with approximately 2,300 talented people across 2 locations in India. WSP is known to execute critical projects ranging from transportation & infrastructure, property & buildings, environment, power & energy, resources and industry sectors, as well as offering strategic advisory services. WSP’s prominent India projects have included delivering a sustainable and viable mass transit system to India’s Delhi residents, with the addition of new metro lines and stations for the Delhi Metro, as well as supporting the public-private partnership Delhi International Airport Limited (DIAL) in completing a massive, fast-track modernization program to expand airport capacity.
Senior Vice-President, WSP U.S.A. and Team Leader, UKaid सीप Programme
About the author
In his 25 years of development work, Baljit has worked with host country governments, private sector and non-government organizations on competitiveness, sector development, trade facilitation, skills upgradation and financial inclusion programs. He has held leadership positions on and overseen several large multidisciplinary projects in over 20 countries for multilaterals and bilateral, including the World Bank; Foreign Commonwealth and Development Office (FCDO) and the United States Agency for International Development (USAID). He has also led several successful programs in Nepal over the past 6 years.
This article is re-published followed by its prior publication in the Nepal Infrastructure Summit 2022 handbook.