TRAINING AND DEVELOPMENT
Today’s business environment can certainly be described as ‘challenging’, with organisations contending with a range of influences, including technology, security, environment, regulatory compliance and economic conditions. Some of these influences are rapidly evolving and, in addition, businesses are required to navigate a course within the influence of a global political landscape. Despite such challenges many organisations successfully adapt and remain competitive.
For many businesses, certainly within the construction industry, a key resource is the people that operate within the business. These people build the culture and values, provide the customer experience, retain business knowledge and generate innovative ideas.
Although technology is one of the fast-evolving influences, especially artificial intelligence, it is generally considered that a productive use of artificial intelligence at present is to facilitate and enhance the value of people, rather than displacing them.
Where a business treats people as a key resource, then investment in this resource is an investment for the business. An important area of such investment is training and development, which provides numerous benefits, including:
- Employee retention.
- Enhanced performance.
- Greater engagement.
- Increased satisfaction.
It can also be used as a targeted measure to assist with the following:
- Introducing business changes.
- Innovation.
- Succession planning.
When a business invests in training and development as part of the culture, the people know and understand that they are both supported and expected to continue with their development, resulting in a collaborative approach.
For many businesses there is diversity within their people, not least with age, knowledge and experience. Although a diverse workforce is thought to be beneficial to businesses, when it comes to training and development it does create certain challenges.
Training and development is essentially a lifelong process and cycles through a learning curve of knowledge, experience and understanding, which is continuously expanded and refined by repeating the process and focussing on greater detail each time or varying the topic of consideration.
Each individual’s approach to learning is different, not least with experiences in life and personal circumstances at a particular point in time affecting this. Learning is not a linear process although it is important to apply it consistently, ensuring that some progress is made even when circumstances are not as favourable.
To be most effective, training and development should be targeted to those topics that are most important and beneficial to a business, driving performance, innovation and growth. Many construction businesses operate within the environment of contracting, either directly or indirectly, so it is important to have some knowledge and understanding of contracts to safeguard the interests of the business.
A challenge with contracts is that they are often perceived solely as a legal document containing an allocation of rights and liabilities. Although this is what contracts do contain, it is only part of the purpose of a contract which should also clearly determine actions, responsibilities and how the parties relate to one another.
A challenge with contracts is that they are often perceived solely as a legal document containing an allocation of rights and liabilities.
One of the issues with understanding construction contracts is that they span a variety of different topics, including; legal principles, financial and commercial matters, programme and planning, insurance, procurement and subcontracting, health and safety, quality management, document management, design and dispute resolution.
Each of these is a specialist topic and can be further sub-divided, for example legal principles could be sub-divided into; contract interpretation, terms and conditions, bonds, guarantees and warranties, liabilities and applicable common law principles, to name a few.
When differences occur between parties to a construction contract, this can lead to a dispute, which, unfortunately, is not an uncommon occurrence as evidenced by the number of disputes referred to adjudication, arbitration or the courts each year.
The Centre of Construction Law & Dispute Resolution at King’s College published a report in October 2022 titled ‘2022 Construction Adjudication in the United Kingdom: Tracing trends and guiding reform’ authored by Professor Renato Nazzini & Aleksander Kalisz (‘ Adjudication Report’ ). This was part of a three-year project with further reports published in November 2023 and November 2024.
Within each report a section highlighted the leading causes of disputes in construction adjudication, as reported by respondents. These included the following as primary causes:
- Inadequate contract administration.
- Lack of competence of project participants.
Although the sample size of responses was relatively small, there was a clear perception amongst respondents that these particular causes were significant reasons why matters became a dispute. Both of these causes are areas that could be improved with targeted training and development measures.
This is essentially the management of the procedures within the contract and requires basic knowledge of what is required to be done, by whom, and when. Several procedures operate on a cyclical basis with others initiated by a decisive action or the occurrence of an event. In practice many people are involved with the administration of a contract, not least because there are a variety of specialist topics contained within each contract. Although it is not feasible to have a detailed understanding of all of these, a knowledge of the basic principles is useful due to the interrelation between different contract procedures.
As an example, consider compensation events, which is the primary change management procedure under NEC4 contracts.
Knowledge
The procedure is located at core clause 6 of the NEC4 forms (except the framework contract and dispute resolution service contract). The procedure essentially operates as follows:
- An event occurs.
- The event is notified as a compensation event.
- If the event is a compensation event, an instruction is given to submit quotations.
- Quotations are submitted and assessed.
- A quotation is responded to.
- The procedure is concluded when a compensation event is implemented.
- When a compensation event is implemented, specified contract changes are made.
Moving on to a greater level of detail:
- The events are generally listed at clause 60.1 but also within main X and Y option clauses.
- Which party, or named role, is required to notify the event?
- What happens if an instruction is not given?
- How is a quotation actually assessed?
- What are the response options for a submitted quotation?
- How is a compensation event implemented?
- What are the changes and how are they made?
The experience and understanding gained then enhances knowledge so that each time an individual subsequently cycles through the learning curve they focus on greater levels of detail.
When administering an NEC4 contract, knowledge of the procedure leads to:
- Knowing how a particular event occurs
- When is an event required to be notified
- Tracking progress to ensure actions and timescales are complied with
- Knowing what information is used to make an assessment
- Managing the procedure across the supply chain
- Facilitating the procedure with informal discussions
From knowledge and experience:
- What sources of information tell you that an event has occurred?
- Familiarity with online contract communication tools and their contract compliance.
- Knowing where to obtain the required information for a quotation.
- Knowing how to extrapolate the required information for a quotation.
- Being aware of the reminder provisions and when they operate.
- Knowing how to ‘informally’ challenge decisions.
The experience and understanding gained then enhances knowledge so that each time an individual subsequently cycles through the learning curve they focus on greater levels of detail. This may lead to development of the following:
- Structuring site reporting to capture appropriate compensation event information.
- Use of different forecasting methodologies for quotation assessments.
- Understanding the use of resources for disruption and in efficiency assessments.
- What appropriate methods can be used to assess risk allowances.
- How is ‘resource thickening’ assessed in a quotation?
- What events reduce the Prices and how is this assessed?
One of the problems with training and development is that people’s roles change over time, for a variety of reasons. If not continually operating within an environment that provides genuine experience, knowledge becomes increasingly theoretical over time, losing touch with the detail.
For certain topics, such as contract administration, knowledge, experience and understanding will continue to be invaluable, not least as a sense check to verify and confirm the outcome of a procedure.
For many businesses, their people are a key business resource, so investing in them is an investment in the business itself. Establish a culture that encourages and promotes training and development as a two-way process, ideally with a recognition and reward system.
Target training and development to those topics that are most important and beneficial to the person and the business, for maximum effect.
Remember that all learning is a continuous process especially within an ever-changing business landscape, particularly where artificial intelligence is adopted. For certain topics, such as contract administration, knowledge, experience and understanding will continue to be invaluable, not least as a sense check to verify and confirm the outcome of a procedure.