Title Managing multiple forms of employment in the constructionsector : implications for HRM

The construction industry is one of the largest and most complex industrial sectors in the UK. The industry’s failure to adopt progressive human resource (HR) practices is routinely blamed on the challenges of operating in a fragmented, project-based environment reliant on subcontracting. This research examines the extent to which existing HR theory accounts for the particular employment context of project-based organisations operating in volatile markets. Drawing upon case study research from two different divisions within a large contracting firm, this article explores the extent to which different contracting arrangements impinge on attempts to reposition human resource management (HRM) as a strategic function along the business partnering model. Elevating the role of the HR function is found to be difficult to reconcile with the concurrent demands of managing multiple forms of employment arrangements. The research reveals a need for HRM models that account for the specificities of complex, differentiated organisations that operate in multiple environments. INTRODUCTION Project-based organisations are becoming more common in a variety of sectors and are attracting increasing attention from researchers (e.g.Midler, 1995; Whittington et al., 1999; Davies and Hobday, 2005; Söderlund and Bredin, 2006). Despite interest in the challenges faced by project-based organisations, limited attention has been given to HRM in project-based environments, and the extent to which this challenges conventional thinking (cf. Söderlund and Bredin, 2006). The links between an organisation's project operations and HR practices are presently not well understood and do not figure highly on the current management agenda (Bredin and Söderlund, 2006). This article takes as its point of departure the contention that models derived from centralised homogeneous firms, working in relatively stable environments, are unsuitable for the complexity of project-based organising; and that there is a need for a shift in emphasis from viewing firms as homogeneous unitary entities and instead focus on the challenges of enacting HRM within dynamic environments (cf. Raja et al., 2010). The construction sector is in many ways the epitome of a project-based industry, and project-based organisational forms have long been the norm. It is also one of the largest and most people-reliant sectors, and yet it is repeatedly argued that the industry lags behind other sectors when it comes to HR policies and practices (Druker and White, 1995; Dainty et al., 2007a). This is typically attributed to contextual factors that distinguish construction organisations from those operating within more stable environments. These include fluctuations in demand that encourage large construction firms to focus on numerical flexibility, and a short-term focus on price often at the expense of longer term employment considerations. The focus on numerical flexibility translates directly to an extensive reliance on subcontracting, often limiting the directly employed workforce to a small core of professional managers (Winch, 1998a). Other factors include the geographical and spatial distribution of organisational operations, and the disparate and transient nature of the workforce; these characteristics can in themselves be construed to be a product of the short-term project environment (Riley and Clare-Brown, 2001). Such arguments are widely recognised, but little to date has been made of the tendency for large construction firms to operate concurrently in multiple markets. Notwithstanding established debates about the negative influence of short-term project environments, major clients in both the public and the private sectors have in recent years sought to establish longer term ‘framework’ agreements with selected contractors. Such frameworks arguably provide contractors with greater certainly of work, thereby potentially providing a more conducive context for construction firms to develop and invest in their HR functions along the ‘business partnering model’ (Ulrich, 1997; Ulrich and Brockbank, 2005). In this article, we examine the extent to which the new operating context defined by long-term ‘framework agreements’ influences the modernisation of the HR function within construction firms. In doing so, we shed light on the challenges experienced by HR managers as they seek to configure their professional identity as ‘business partners’ (cf. Ulrich, 1997; Caldwell, 2003; Francis and Keegan, 2006; Wright, 2008; Keegan and Francis, 2010; Pritchard, 2010; McCracken and Heaton, 2012). The article also begins to address the lack of theorising in terms of the way HRM is shaped and patterned by the increasing prevalence of project-oriented organisations (see Bredin and Söderlund, 2006; Söderlund and Bredin, 2006; Huemann et al., 2007). CONSTRUCTION AS A CONTEXTUAL ARENA FOR STRATEGIC HR PRACTICE The construction HR landscape The construction sector's regressive approach to HRM is widely documented. Studies have repeatedly contended that the dominant culture of the construction industry emphasises a model that treats people as a cost that is to be minimised (e.g. Druker and White, 1995; Druker et al., 1996; Green, 2002), with HRM as a low priority. The construction sector's supposed failure when it comes to ‘people issues’ has been a recurring theme of government reports on how to improve the performance of the industry since the Emmerson Report of 1962, which exhorted firms to adopt a longer term view to ensure increased stability of employment (Murray and Langford, 2003). In 1998, the government-sponsored task force led by Sir John Egan concluded that the UK construction industry is underachieving and that a ‘commitment to people’ is vital for its future (DETR, 1998: 4). Yet, the extent to which institutionally embedded practices may be reversed through such industrylevel ‘attitudinal change’ programme remains debatable (cf. Ness, 2010). Rather than lay the blame for retrogressive HR on outmoded attitudes, an alternative perspective suggests that the sector's investment in HRM is hampered by a continued reliance on competitive tendering, which denies contractors certainty regarding continuity of work (Green and May, 2003) and the extensive utilisation of non-standard forms of employment (Forde and MacKenzie, 2007), which is arguably necessitated by extreme fluctuations in workloads that project-based working inevitably engenders. Both of these have acted to disincentivise investment in progressive HR practices with the sector. Indeed, it is clear that the quest for the so-called ‘efficiency’ gains from compulsory competitive tendering (CCT), which for so long was the backbone of public sector procurement policies, took priority over any agenda for a stable workforce. The implementation of CCT resulted in an increased use of temporary contracts for employees, reduction in union influence and worsening terms and conditions of employment (Colling, 1993; Sachdev, 2001). The end result is that construction firms tend to avoid taking responsibility for managing or ‘carrying’ a large workforce. Instead, firms have become exemplars of the hollowed-out ‘flexible’ firm, employing very few operatives directly (cf. Atkinson, 1984). Lockyer and Scholarios (2007) show how this causes power to be devolved away from centralised personnel departments to the project level, thereby increasing the informality of HR processes. Responsibility for skills development is similarly devolved and often rests on the shoulders of the individual worker (Dainty et al., 2007b). The corollary of these structural characteristics and institutionally embedded practices challenges elevating the role of HRM as a strategic driver. Indeed, the dominant perception of HR within the sector remains as an auxiliary activity that does not merit serious attention in the minds of other managers and professionals (cf. Legge, 1978). Framework agreements and the potential for more progressive approaches to HRM Despite deeply ingrained practices that shape the dominant HR orthodoxy within construction, changes in procurement strategies are clearly discernable among large construction clients. Much has been made of the advent of ‘framework agreements’, which could potentially provide a more stable platform for elevating the strategic importance of HRM within construction organisations. The pressure for change is in part attributable to public client organisations being increasingly asked to do ‘more for less’, i.e. to produce more public value with fewer resources (cf. Grimshaw et al., 2005; House of Commons Treasury Committee, 2007). While public sector clients have in the past been restricted in their ability to issue long-term contracts due to the centrally imposed need for frequent market testing, this is now gradually changing, and private organisations are increasingly being involved in the provision of public goods and services (cf. Grimshaw et al., 2002, 2005). The progressive privatisation of highway maintenance capabilities has, for example, affected the way in which both the Highways Agency (HA) and the Local Authorities (LAs) procure construction work. The HA has introduced a succession of procurement initiatives, such as Managing Agent Contractor (MAC) and Extended MAC with associated framework agreements to facilitate a service-oriented engagement between public and private sectors (Highways Agency, 2005). Despite the increasing prevalence of ‘framework agreements’, there remains little consistency in the way they are implemented. According to the Office of Government Commerce (OGC, 2006), framework agreements (under Article 32) are defined as: ‘an agreement with suppliers, the purpose of which is to establish the terms of governing contracts to be awarded during a period, in particular with regard to price and quantity. ’ The defining characteristic of such agreements is that they transcend individual contracts and – in t