Salaries in the construction industry are higher than in other industries.
Among construction engineers, construction management engineers face a particularly severe labor shortage. However, their salaries are not high enough given the nature of their work. That is why I believe the salary system for construction management engineers should be reformed.
To promote workforce mobility among construction management engineers and increase the number of people entering the field, it is essential not only to highlight the appeal of the work itself but also to offer attractive compensation packages.
According to the Ministry of Health, Labor and Welfare’s Monthly Labor Survey, the average monthly salary per worker in the construction industry in 2017 was 389,037 yen—72,071 yen higher than the average salary across all 16 industries.
However, the average monthly working hours, including overtime, are 171.9 hours, which is 27.5 hours more than the monthly average for all industries. In other words, hourly wages in the construction industry are not significantly different from those in other industries.
Salaries and Job Responsibilities of Construction Management Technicians
The salary of a construction management engineer is essentially the same as in other industries.
However, the reality is that the professional responsibilities of a construction management engineer are significantly greater than those of the average office worker.
For example,
- If a workplace accident occurs, the site representative may be held criminally liable along with the company.
- Since I am responsible for all budget management related to the construction project, I have a great deal of financial discretion.
- Basically, the concepts of fixed working hours and days off are vague, and in practice, it is a discretionary work arrangement.
- Construction work must generally be carried out based on your own instructions, not those of the company.
For example, construction management engineers bear a heavy burden of responsibility, and some even take their own lives.
In light of the above, I would like to propose a site-based salary discretion system for construction management engineers, under which they can “determine their own salaries as part of the site budget.”
In terms of how it works, it is similar to a bonus payment. Specifically, it works as follows:
Discretionary On-Site Salary System for Construction Management Technicians
First, when construction begins, the company provides the site representative with the profit margin tiers.
For example, a profit margin of 20% or higher is rated A, a profit margin of 10% or higher is rated B, and a profit margin of 0% or higher is rated C. Based on this, the site agent includes his or her “salary budget” for the duration of the project in the construction budget.
This amount can be any figure as long as it remains within the range that allows for a profit. If the monthly salary is set at 1 million yen, include 3 million yen—equivalent to three months’ worth of salary—in the budget (including expenses, overtime pay, and other related costs).
During the project period, salaries in accordance with company policy will be paid from this established “salary budget.”
For example, if the company’s standard salary is 200,000 yen, 200,000 yen is deducted each month from the 3,000,000 yen salary budget and paid out.
- Month 1: Salary budget of 3 million yen — Company-set salary of 200,000 yen → 2.8 million yen
- Month 2: Salary budget: 2.8 million yen — Company-set salary: 200,000 yen → 2.6 million yen
- Month 3: Salary budget: 2.6 million yen — Company-set salary: 200,000 yen → 2.4 million yen
If the profit margin falls below 0% due to additional work or an extension of the construction period, the payroll budget will be transferred to the construction budget. Furthermore, even if the payroll budget reaches zero, the company-stipulated salary will still be paid.
On the other hand, if there is a balance remaining in the salary budget once construction is complete, salaries will be paid from that budget according to the profit margin tier that has been set. Of course, no payments will be made if there is no profit.
- For Rank A: Remaining salary budget of 2.4 million yen × 1001 TP3T paid → 2.4 million yen paid
- For Rank B: Remaining salary budget of 2.4 million yen × 501 TP3T is paid → 1.2 million yen paid
- For Rank C: Remaining salary budget of 2.4 million yen × 251 TP3T is paid out → 600,000 yen paid
Reforming the Compensation System in the Construction Industry
A salary system based on on-site discretion, as described above, benefits both the company and the on-site representatives.
The company can ensure it pays the minimum wage and maintains its profit margin, while on-site agents can boost their motivation for the job.
Furthermore, by differentiating this profession from that of the average office worker in terms of salary, might it not be possible to attract creative and innovative young people by positioning it as a highly attractive career?
However, potential problems with a site-discretionary wage system include the possibility that budget management will become cumbersome and that construction contract costs may increase. There is also concern that wages may fluctuate depending on the difficulty of the project.
However, while this pay system does have its drawbacks, I believe that implementing it is essential to enhancing the overall appeal of the construction industry. The pay structure for construction engineers absolutely must be reformed.
I also think it's only natural that construction managers earn high salaries.
It's been way too cheap up until now. Even when you factor in the share of responsibility.
But only if you're good at it, lol
