9

PROJECT RESOURCE MANAGEMENT

Human resources may be a construction organization's most valuable asset and a key factor for business success. Many other resource types play an important part in the success of construction projects, and the relative importance of each resource depends on the type of facility being built, the construction strategy, and other factors. This section addresses management of all types of resources in the context of construction projects. The expression human resources refers specifically to the people working on the project. The PMBOK ® Guide Process Groups Planning, Executing, and Monitoring and Controlling are addressed in this Knowledge Area, along with the addition of the Closing Process Group, which emphasizes the major effort of project team demobilization.

9.1 Project Resource Management in Construction

Resources form the biggest part of the cost in any construction project; productivity and timely availability greatly influence project time and cost. Thus, resources should be carefully managed if the project is to reach its goals. Construction projects feature unique characteristics that affect how resources are managed, some of which are described here.

9.1.1Resource Types

Resources can be classified in many ways. The following are the most common resources used for construction projects:

• Human resources. The team managing the project, as well as the team actually performing the construction itself.
• Machinery. The machines that are used in replacement of direct human work to perform construction activities. Examples of machines are cranes, bulldozers, and trucks. Machinery is also called equipment. For clarity purposes, this Construction Extension addresses this type of resource as machinery, in order to differentiate it from the equipment that is installed in a facility.
• Tools. Elements that are used by human resources in order to enhance their capability to directly perform construction activities. Examples of tools are shovels and hammers.
• Permanent equipment. Equipment that is installed as part of the facility being built and that is managed by tag number. Examples of permanent equipment are pumps, compressors, boilers, and electric panels.
• Bulk materials. Materials that are installed as part of the facility being built. Because of the use of these materials in different parts of the facility, they are controlled in bulk quantities such as meters (feet) or kilograms (pounds). Examples of bulk materials are electric cables, steel pipes, and floor tiles.
• Consumption materials. Materials that are applied in construction activities and processes that are consumed as part of the construction work in large quantities. Examples of consumption materials are welding electrodes, industrial gases, dust masks, nails, bolts, rivets, and fuel.
• Consumption resources. Electric energy and water are applied in construction activities and processes in a similar way as consumption materials but are differentiated because they are managed in a different way.
• Temporary facilities. Site camp, warehouses, machinery maintenance shops, and other temporary structures built for accommodating the project team and other resources, as well as all the equipment necessary for their functioning, such as furniture and software.

9.1.2Project Location

The project location is almost always unique to the project and may differ from the home location of many of the management team—usually in the temporary environment of a construction site. Apart from the direct impact in human resource management, this situation means dealing with resource providers that are new to the performing organization, which may require a greater level of formality and bureaucracy in resource management.

The availability of resources from skilled labor to consumption materials varies at different project sites. In projects with multiple sites, the availability of resources may vary from one site to another and may influence construction strategy. For example, the choice of the location for a concrete production facility in a road construction project is usually the result of balancing the distance from the sources of sand and gravel and the distance to the concrete application areas.

The methods and procedures for acquiring the team and other resources for a construction project can vary significantly in different parts of the world. Managers of construction projects should be aware of local conditions and customs and their impact in project management and execution strategy, including aspects such as the project work calendar, and the size, type, and display of site temporary facilities. For example, one such case occurred in a hydroelectric plant project in Malaysia: the living facilities for the construction crews included temples for eight different religions.

9.1.3Project Size and Type

Depending on the size of the project, hundreds or even thousands of human resources may be employed. In such large teams, it is not possible to rely solely on the interpersonal skills of the project manager for leadership, communication, negotiation, and conflict resolution. Interpersonal skills are required at all layers of the project hierarchy and of every stakeholder's human resources working on the project.

The type of facility being built may require resources from multiple origins. This adds complexity to the logistics of activities such as establishing offshore purchase contracts subject to different local tax and labor regulations; adhering to international law; managing transportation to the job site in foreign countries, whether by road, sea, or land; and obtaining insurance, custom clearance, and other permits.

9.2 Project Resource Management Planning

Once the types and quantities of resources are estimated, it is possible to choose the best alternative for managing those resources. Division of responsibilities, as determined by the contract, is another important input for managing resources. For example, the owner may be responsible for purchasing long-lead-time equipment, but the contractor may be responsible for unloading, storing, and preserving it at the site until installation and start-up. Construction strategy determines the quantities, locations, and time frames when each resource will be stored and made available.

Resource management planning involves the logistics of bringing resources to the site and storing or distributing them to each construction front. Special cases in logistics are the placement of telecommunications facilities, energy and water points, and the handling of oversize and overweight loads. Other unique logistics involve the daily transportation of workers in and out of the site and, in some projects, between the different construction fronts.

The strategy, processes, and performance indicators for resource management should be collected into a resource management plan, addressing at minimum:

• Number, size, type, and layout of facilities for storing goods. The design of these facilities should take into account applicable standards and regulations for hazardous materials and manufacturer requirements for equipment storage.
• Resource requirements for resource management, such as warehouse crews; logistics and transportation teams; equipment such as trucks, cranes, and forklifts; and consumption materials such as grease and nitrogen for preservation.
• Histograms for the most relevant resources in the project, such as heavy cranes, concrete, and others (depending on the project size and type) (see Table 9-1).
• Processes for resources receiving, handling, stocking, preserving, and delivering to the point of application, along with responsibilities and authorizations for requesting resources.

In construction projects, the human resource management plan is a stand-alone document. The unique characteristics related to project location and nature of the project team require that special attention be paid to at least two components of that plan in a construction project: human resource policies and staffing management plan.

As each construction site has its particular characteristics, contractors’ corporate human resource policies tend to be broader or more general to leave flexibility for the project to determine aspects that are affected by those particular characteristics. It is not uncommon for construction projects to have their own human resource policy, which should make reference to a general or corporate policy. Some examples of topics that may vary from one project to another and may be covered by a project human resource policy for corporate construction personnel are:

• Incentives or restrictions for team members to move to the region of the project, with or without their families;
• Schedule of periodic visits to the members’ home locations, allowable time off, and trip costs reimbursement;
• Currency in which salaries will be paid, as well as the local labor taxes involved;
• Site campus conditions; and
• Site personnel fringe benefits.

The human resource policy is a very sensitive one, as it covers both labor and management, including local and foreign workers. If local and foreign workers are included in the project, the policy should be written so as to balance the attraction of both foreign and local workers to prevent creating a feeling of undervaluation for local workers. This policy should be developed during the bidding phase, as it implies costs that should be taken into account in contract prices.

9.3 Project Resource Management Executing

The execution processes for resource management take place as soon as resources are procured and delivered to the project job site. All materials and equipment should be coordinated for delivery, including off loading and storage until these building components are permanently installed. The continual movement and storage of these components leads to higher job site costs until permanently installed. The following are some of the important points to consider when managing resources during the execution of a project:

9.3.1General Resources

• Stocking quantities management. Although stock size is an issue in most projects dealing with resources, the interdependence and the quantities that construction projects usually deal with make inventory management a very important process. For example, the lack of fuel may cause site machines to stop, causing low productivity and delays; excess fuel may increase the impact of eventual accidents and requires additional storage facilities.
• Expiration dates. Some materials, such as cement and paint, are subject to expiration dates, which pose an additional requirement for stock sizing and inventory replacement.
• Hazardous materials. Paints, fuel, chemicals, and other hazardous materials require special conditions of transport, storage, handling, and disposal of residues, which may include dedicated water or runoff collection systems and ventilation requirements at site, and special permits.
• Materials requiring special storage conditions. Some materials, such as electronic artifacts or electric motors, require controlled temperature and/or humidity conditions.
• Machinery maintenance. The resource calendar for machines should foresee maintenance periods. Maintenance is performed at a dedicated facility with its set of tools, consumables, and spare parts, for which resources management applies as well. According to standards and regulations, this type of facility usually has installations for collection of contaminated water and disposal of residues.
• Permanent equipment preservation. Most of the equipment that will be installed as part of the facility being constructed requires some kind of preservation activity, such as periodic greasing and rotation of axis. Owners usually require a preservation plan to be approved and executed. The preservation evidence is usually a part of the facility data book or dossier.

9.3.2Human Resource

Considerations that are important when executing project human resource management for construction projects are described in Sections 9.3.2.1 through 9.3.2.3.

9.3.2.1Staffing

Although the staffing process is the same for both the labor and managerial forces, the tools and techniques that are effective for each may be different. For example, networking is an important tool for staffing the management team. Construction projects usually require certain types of people with specific characteristics, such as the ability to move from one's home to another location, adaptability to different cultures, and a sense of mission. Through networking, a first screening of potential team members can be accomplished, expediting the acquisition of external workforce. For the labor force, networking is seldom used, as the construction workforce may be acquired from trade associations, labor unions, local labor agencies, or solicitation through job postings, which may be very effective in remote communities. Unionized construction trades are usually obtained from the local union hiring hall, and the contractor may negotiate with the union on the number and type of workers as well as pay scale and benefits for larger projects (usually through a collective bargaining process). The results of the negotiation vary depending upon the state of the construction economy and employment level among union members. For nonunion projects, it is usually the contractor's responsibility to acquire the workforce locally or from the contractor's own workforce database. For foreign projects or where a large labor force is required, the contractor may be required to negotiate agreements with local firms that control the available workforce.

9.3.2.2Team Building

Construction projects usually bring together different stakeholders working in conjunction to reach a common result. In this environment, the concept of team crosses the borders of the various organizations working on the project, and team-building activities should be planned with that aspect in mind.

The durations of typical construction projects may range from less than 1 month to many years. Within that time frame, the various stages of construction activities require the mobilization of crews with different skills, so the team-building effort is always at a start. Team development strategies for the labor workforce should use different techniques from those applied to the managerial workforce. One popular technique is to offer incentive programs such as awards based on crew performance in terms of safety, productivity, and other factors. Other activities, such as a barbeque lunch for the labor and managerial workers on a job site, may be effective for team building. These events may include subcontractors and some form of celebration or recognition, especially around completion of key milestones or deliverables.

9.3.2.3Interpersonal Skills

Interpersonal skills are an important tool for managing project teams. In construction projects, the project team can be very diverse in terms of culture, knowledge, education, and other aspects, which makes interpersonal skills even more important, not only for the project manager, but also for the entire team.

9.4 Project Resource Management Monitoring and Controlling

Monitoring and controlling resources in construction projects is primarily concerned with productivity and consumption rates, as well as with the process of allocation and reallocation of human resources (HR leveling) according to project needs. Productivity and consumption rates estimate how much a given resource can produce in a given time, or how much of a resource is consumed to produce a unit of a given deliverable. For example, the productivity of a bulldozer can be measured in cubic meters per hour of earth moved, while the consumption of welding electrodes can be measured in kilograms of electrode per inches of weld performed. Productivity of labor can be measured in terms of labor hours per unit. Productivity and consumption rates are widely used as a basis for estimating resource usage, leading to activity resource requirements, and activity cost estimates. Controlling productivity during the execution of the project is usually a key factor for performing the project within the time and cost baselines.

Productivity control is performed by measuring executed quantities in work packages and then measuring and relating workforce, machinery, and materials usage to those work packages. For the productivity control process to actually work, construction strategy should be accurately translated into a matching set of work breakdown structure, cost breakdown structure, and time schedule. The success of the productivity control process is established during planning.

Reporting is another key factor for controlling productivity rates. For example, knowing which equipment worked for which work package allows the comparison of productivity rates for different equipment, eventually detecting a need for maintenance or operator retraining.

Consumption materials and resources are controlled by inventory as they cannot be individualized. The focus of controlling those types of resources is in savings rather than productivity. Reducing resource usage is beneficial not only to project cost objectives, but also to environmental management, both by reduction of use and by reduction of waste.

Another factor that may affect the ability to accomplish the project's cost objectives—and should be monitored—is the turnover rate. The turnover rate is the ratio of the number of workers that are replaced in a given time period to the average number of workers and is usually expressed as a percentage. Hiring and firing on a higher rate than the one considered in the budget may lead to higher costs in payroll, productivity, and training.

Construction companies usually include records of productivity and consumption rates, along with an analysis of the conditions impacting (positively or negatively) those results as part of their lessons learned. The organization depends on this feedback to create and update organizational process assets that may represent an important competitive advantage for tendering in the marketplace.

9.5 Project Resource Management Closing

As the construction effort of the various phases of the project approaches completion, all permanent equipment and bulk material should be installed. The respective project resources, including human resources, are either reassigned to other projects or returned to their trade and union associations and providers, whereas equipment, residual materials, concrete forming systems, and installation tools and supporting consumables are removed and may be sent to the next project or stored for subsequent future use.

9.5.1General Resources

The procurement of equipment and materials is performed by the contractor; the owner usually requires a set of spare parts to be purchased in conjunction with each piece of equipment. The closing process includes handing over to the owner those spare parts and all other items that, per contract, belong to the owner.

It is common for the contractor to purchase a surplus of some materials, such as steel rebar and electric cables, to account for accidental damage of materials. The remainder of bulk materials in the ownership of the contractor and the stock of consumption materials and tools should be disposed of, either by sending them to another construction project or selling them to the market. Rented machinery is returned to the owner, and the respective rental contract is closed. Owned machinery is returned to the performing organization for employment in other projects.

9.5.2Human Resource

The process of releasing team members in construction projects may involve thousands of people, requiring a lot of effort and possibly influencing a project's objectives. The closeout and dissolution of the project team is a major consideration for construction projects. As certain responsibilities are completed, team members are released and either return to their source department, are assigned to another project, or are returned to their point of hire and the open job market. When the project is completed, all of the remaining team members, including the project manager, are released from the project.

As a project approaches its conclusion, some team members may take steps to find subsequent employment and leave the project before their assignment is completed. This may delay the project's completion and generate a potential negative impact on project objectives such as time and cost. For these reasons, extracting good practices and lessons learned from team members should be a constant practice throughout the project life cycle in order for the organization to capture practical knowledge and experiences. The project management team should have at hand processes to handle such cases in order to keep key performance indexes within acceptable limits. For example, offering a bonus for staying until the final closure of the project or for completing tasks within a certain time frame can be effective in offsetting this type of problem.