The Challenge of Recruiting Construction Management Engineers at Regional Construction Companies and Local Governments
The “regional disparity” between major general contractors in the Tokyo metropolitan area and regional construction companies is widening. Furthermore, there is a marked trend toward widening “disparities between companies” even within the same region. Under these circumstances, it has become clear that construction management engineers are leaving regional areas in droves to seek employment in the Greater Tokyo Area (Tokyo, Kanagawa, Saitama, and Chiba), lured by higher design labor rates.
It is no exaggeration to say that securing construction management engineers is the lifeline of major general contractors’ business strategies. Will regional construction companies be able to prevent the exodus and turnover of construction management engineers and ensure their survival?
While the topic of restructuring among regional general contractors has recently come to the forefront, this article focuses on the “regional disparities” between major general contractors in the Tokyo metropolitan area and regional construction firms, and reports on the reality of construction management engineers leaving regional areas to seek employment in the Tokyo metropolitan area (Tokyo, Kanagawa, Saitama, and Chiba).
Municipalities with no member companies of the National Construction Industry Association
According to a survey by the Japan Construction Industry Association (abbreviated as Zenken), the number of cities, towns, and villages without member companies of the association is increasing. Since member companies of the Japan Construction Industry Association serve as “guardians” of their communities by carrying out disaster recovery and snow removal operations, this effectively means that so-called “disaster response gaps” are expanding.
Of the 1,741 municipalities nationwide, 188—or 10.8 percent of the total—have no member companies of the Japan Construction Industry Association. Twenty-six of the 47 prefectures have municipalities with no member companies. Furthermore, the number of municipalities where there is a “concern that member companies of the Japan Construction Industry Association will no longer be present in the future” amounts to 72 municipalities—4.1 percent of the nation’s 1,741 municipalities. Given the recent increase in major disasters across Japan, the expansion of “areas with gaps in disaster response” is an urgent and alarming situation.
The Relationship Between "Salary" and "Disaster Response Capability" for Construction Management Engineers
Now, regarding this data from the Japan Construction Industry Association, I once conducted interviews with industry insiders about “areas with gaps in disaster response.” My initial goal was to investigate each region’s “disaster response capacity,” but as I listened to what the industry insiders had to say, the relationship between the salaries of construction management engineers and “disaster response capacity” became increasingly clear.
The following are accounts from local construction companies, specialized contractors, and municipal contracting authorities in the Hokuriku region that are members of the National Federation of Construction Contractors' Associations. For ease of reading, I have summarized them in bullet points.
The Alarming Exodus of Construction Management Engineers to Other Prefectures
Remarks by the President of Construction Company A, located in the Hokuriku region
■With work concentrated in the Greater Tokyo Area (Tokyo, Kanagawa, Saitama, and Chiba) and disaster-stricken areas affected by the Great East Japan Earthquake (Miyagi, Fukushima, and Iwate), regional construction companies are being left behind when it comes to the benefits of Abenomics.
■ Harusada Kondo, chairman of the Japan Construction Industry Association, has also said, “Things are good only in Tokyo.”
■The wage gap with the Tokyo metropolitan area is widening, leading to an exodus of construction management engineers from regional construction firms to the Tokyo metropolitan area.
■Far from being able to recruit new employees, it’s even difficult to maintain the current number of construction management engineers.
■Since we are heavily dependent on public investment, we hope the national and prefectural governments will award contracts for public works projects that can ensure profitability every year.
Remarks by the President of Company B, a specialized construction firm in the Hokuriku region
■Since the Hokuriku region is prone to heavy snowfall, there is a lot of work involved in snow removal; however, because snow removal is not very profitable, many skilled workers leave for the Tokyo metropolitan area to find work during the winter. *The profitability rates for snow removal are as follows: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) 49%, prefectures 43%, and municipalities 30%.
■Many skilled construction workers, having learned firsthand about the wage disparities between the Greater Tokyo Area (Tokyo, Kanagawa, Saitama, and Chiba) and the areas affected by the Great East Japan Earthquake (Miyagi, Fukushima, and Iwate) while working away from home, end up settling permanently in the Greater Tokyo Area or the Tohoku region.
■With fewer people leaving their hometowns to work elsewhere, the number of skilled construction workers who work on construction sites during the day and at convenience stores at night has increased.
■If the disparity between regional areas and the Tokyo metropolitan area widens, the exodus of skilled workers will continue unabated.
■ I want the national and prefectural governments to increase public works projects.
Statement by the Prefectural Government Employee Who Placed the Order
■As a result of curbing the hiring of technical staff during the “ice age” of public works projects, the supervisory skills of project managers were no longer passed down.
■There is a strong sense of crisis that, even if public works projects increase in the future, there will be a shortage of staff capable of overseeing them.
■Unless we secure staff who have obtained the Construction Management Engineer certification, our prefecture will also face difficulties.
■Public works investment in this prefecture peaked in fiscal year Heisei 8. Compared to fiscal year Heisei 26, it was down 51 percent.
■Local construction companies are the ones we rely on for snow removal and disaster recovery, so public works investment is necessary for that reason as well.
■We are urging the national government to reach a political solution aimed at expanding funding for public works projects.
In other words,
Decline in public works investment ⇒ Decline in profits for local construction companies ⇒ Wage gap with the Tokyo metropolitan area ⇒ Outflow of construction management engineers ⇒ Bankruptcies and Decline in Local Construction Companies ⇒ Decline in the Number of Member Companies of the Japan Construction Industry Association ⇒ Expansion of Areas with No Disaster Response Capabilities ⇒ Decline in Disaster Response Capabilities
There was a vicious cycle like this. This means that an increasing number of regions are unable to respond to natural disasters in an emergency.
The lifeline for local communities and businesses lies in recruiting and securing construction management engineers.
Regarding “disparities among companies” within the same region, I heard the following from an executive at a general contractor.
Remarks by an executive of a general contractor in the Hokuriku region
■Under the current comprehensive evaluation system for public works projects, it is necessary to secure technical personnel such as construction management engineers.
■Construction companies that are able to secure construction management engineers are doing well, but those that cannot secure them are missing out on opportunities to win contracts.
■To put it bluntly, securing construction management engineers is the top priority for general contractors and the lifeline for regional construction companies.
...It seems that securing construction management engineers is key to the survival of local construction companies and, ultimately, to reducing the number of areas lacking disaster response capabilities. However, it may be inevitable that individual construction management engineers seek work in the Tokyo metropolitan area or the Tohoku region, where salaries are higher.
Recently, the topic of restructuring among regional general contractors has also come to the forefront, but I’d like to write about that at a later date.
