People, Planet & Profits
Why the Construction Industry Is Embracing Corporate Social Responsibility
The message in Bob Dylan’s anthem for the 60s, “The times they are a-changin’,” got lost in the 80s and 90s, an era of opulence and corporate greed. Then again, maybe Dylan was projecting into the 21st century, a time when a move toward positive corporate culture and corporate social responsibility is changing the way construction companies do business.
We searched the literature on organizational behaviour to come up with definitions of corporate culture and corporate social responsibility (CSR). Theorists, we found, consider corporate culture as a collection of beliefs, customs, traditions and practices, shared and continued by the employees of a corporation, and which distinguish it from other corporations. (Hai, D.M., Ed. Organizational Behaviour, St. Paul, MN: West Publishing Co. 1986).
While corporate culture refers to what goes on inside an organization and may be either organic or deliberate, CSR is always deliberate, has broader implications, and seems to have replaced the more limited term, ‘corporate culture.’ The Business Development Bank of Canada, a crown corporation established in 1944 with 188 business centres across the country, defines the concept in an online publication entitled “7 tips for putting corporate responsibility at the heart of your business.”
“Corporate social responsibility,” it says, “is the way a company takes responsibility for its actions and their impact on employees, stakeholders and communities. It includes the way your company conducts its business, how it manages impact on the environment, how it treats its employees and how it supports community activities that aim to solve social problems such as poverty or discrimination.”
Similarly, Corporate Responsibility in the Canadian Construction Sector: A Practical Guide to CSR, published by the Canadian Construction Association (CCA), which has 63 local and provincial integrated partner associations, provides a wide-ranging definition of corporate social responsibility, including “how companies are run and managed, their ethics, culture and operations, their relationships with employees, customers, suppliers, construction and other businesses, communities, industry associations, and governments, along with their construction practices and projects.”
It’s about going “above and beyond what is legally required to contribute positively to the environment, the workforce and communities. It includes both what the company can control and what it can influence, the latter by collaborating with partners on joint social or environmental initiatives.”
The CCA is encouraging its 20,000-member firms to buy into the concept because ultimately it affects what they call the company’s “triple bottom line or ‘people, planet and profits’. It’s about maintaining and even enhancing profitability while embedding social and environmental considerations in the business and making CSR an integral part of the company’s culture.”
Put simply, it’s an exemplification of the Golden Rule – if a company treats others well, it will benefit in the end. As the Business Development Bank of Canada tells its clients, although being a socially responsible business often involves higher material and labour costs, there is a business case to be made.
By being a good role model, a company will attract people who have skills such as ingenuity, leadership and the ability to work in teams. And by treating employees responsibly, costly employee turnover is minimized.
Corporate culture and CSR can also impact safety, attract and retain valuable employees, provide client satisfaction, protect the environment and even improve a construction company’s bottom line. It seems that no one is arguing a case against positive corporate culture or CSR.
George Hedley, a professional construction industry business coach, in his 2015 article “How to Attract Employees to Your Construction Company” for forconstructionpros.com, had harsh words for managers who complain about the labour shortage, and he challenges them to change their company culture now. When speaking at conventions he asks, “’Do any of your kids want to work in construction?’ Only one in a hundred answers yes. With such a low response from the children of people in the industry, it should come as no surprise that construction ranks number 248 out of 250 career opportunities among high school seniors.”
He continues, “To find and retain great people, companies must have a proactive and aggressive employee development program. This includes ongoing training and education, programs in team building, computers, supervision, leadership as well as technical skills. Also required are employee recognition systems, personal development programs, and pay for performance. To develop great people requires new leadership styles that coach, inspire and encourage people to become the best they can be.”
Garry Bartecki’s article entitled “Construction Firms Must Build Up the Benefits to Attract and Retain Workers” (forconstructionpros.com February 3, 2017) echoes those sentiments. Bartecki writes about the obvious things — benefits packages, standard allowances for work clothes and, where possible, flexible hours – but beyond those he says managers “should have a story to tell about your company, its history, the types of jobs you have worked on, success stories, and problems that came up and how you handled them.”
In other words, construction companies should have a clearly articulated mission statement and cultural polices in place and be able to communicate them clearly. “This approach,” Bartecki writes, “demonstrates that management cares about the company and how it operates.”
He recommends having a defined ‘startup’ program for new employees – providing skills training, assigning a senior employee to coach and mentor the new employee about company standards and bringing new employees into the planning process to learn how you plan and execute on a job.
“The most pressing employee issue to address is how to keep the employees you have,” Bartecki writes. “If you have good people, or people who can develop into positions where you need them, you need to do whatever it takes to avoid turnover. A single employee turnover can cost the company between $7,000 to $25,000… and that doesn’t take into account any disruption on the job site, caused by the departure.”
The successful construction companies we’ve interviewed for past issues of this magazine are doing all this and more, including liaising with community colleges and universities and introducing apprentices and interns to their company’s culture. They’re also recognizing that millennial employees have a desire to work for companies that demonstrate corporate responsibility and are moving toward diversifying their workforce by hiring women and immigrants.
A culture of safety is also paramount. As Evan Sowell, co-owner of Langston Construction Company told us for an article in this month’s issue, “Everything we do is dangerous. Very rarely do we work with our feet on the ground. We’re below grade in a hole or we’re up in the air.”
Langston’s Zero Unsafe Behaviours program, which includes a safety committee, corporate safety manager, onsite safety professionals, site-specific safety plans for every project and training that extends to sub-contractors, earned it a First Place Construction Safety Excellence Award from the Association of General Contractors of America.
Langston’s approach is one that’s supported by research. An American Society of Safety Engineers Foundation research study, Corporate Culture: A study of firms with outstanding construction safety, published in July 2002, found that, “Written safety plans can be effective, but companies must go beyond the letter of the plan and create a true ‘safety culture.’” The research team indicated that “corporate safety culture had an integral effect on construction safety performance” in the three Colorado firms it studied.
All had good safety records, but the one with the best record also had the most consistent safety culture. An unexpected result of this study was the fact that the best-performing company had “no statistically significant differences between upper management, middle management and field personnel” on a questionnaire related to company culture. Everyone, no matter their position, must be on the same page in order for corporate culture to have an impact on safety. The stakes are way too high to do otherwise.
While the forces that are driving the more traditional form of positive corporate culture are largely internal – that is, a company’s need to build a competent workforce and maintain its reputation of completing quality work – corporate social responsibility is driven by external forces such as client demand, community and public expectations, green building, climate change and possible future legislation and regulations.
The CCA reports “a growing demand for greener and socially responsible projects on the part of customers, especially municipalities and other public sector organizations.” Meanwhile buyers from the private sector want to work with well-managed companies that in turn will help them achieve their own CSR goals such as safety and emissions management. Integrated project delivery (IDP), promoted by CCA, is “a process that collaboratively harnesses the talents and insights of all participants to optimize the project results, increases value to the owner, reduces waste and maximizes efficiency through all phases of design, fabrication and construction.”
It includes team dynamics, user satisfaction, community satisfaction, collaboration, sustainability and performance — all considerations that are ultimately connected to a fundamental respect for people. IDP also complements the value-added tools of Lean and BIM (building information modelling) which work best in a collaborative, open, transparent environment. In addition, the IDP approach makes it easier to address client and community concerns around green building initiatives and workplace designs which have been linked to staff health, well-being and productivity, as well as governments looking for more rigorous accounting of energy and emissions performance.
Another driver is that of community and public expectations. Construction companies are not like other businesses, working behind closed doors; construction work is visible and because of that there’s a perception companies should contribute to the community in a significant way.
Several construction companies we’ve interviewed have told us they annually take a Saturday to build a Habitat for Humanity home in their community, with everyone, including the company’s CEO, pitching in. Another told us how each of the construction companies in a certain region organize a competition to see who can construct the most elaborate edifice using canned food, all of which was then donated to the local food bank. Yet another asks employees to present a case for a charitable organization with which they are associated. One is chosen monthly and is helped, either through cash or an in-kind donation. And yet another company is building wheelchair ramps for people unable to afford the associated labour costs.
In addition, the CCA’s report concludes that, “Changes to building codes and bylaws over the next decade are expected to raise environmental and safety standards and improve the social and environmental impacts of construction.” Companies which have a CSR policy in place and are acting on it will be ahead of the curve.