Desperate construction companies are poaching workers off each other at a destabilising rate.
File photo: A construction worker selecting steel mesh for concrete reinforcement Photo: Cultura Creative
Omicron is making labour shortages worse, with many projects already fiercely competing for staff.
Major Auckland firm D&H Steel Construction – which has 100 workers at home out of its 150-strong workshop – blames the government for overcooking the market with too many projects.
It had 20 riggers, welders and crane drivers poached in the last eight months.
“We are being attacked on all sides,” said managing director Wayne Carson.
In central Auckland, the $4.4 billion City Rail Link (CRL) is struggling to keep workers vital for building stations.
“The biggest one for us is steel fixers,” said CRL chief executive Dr Sean Sweeney.
D&H Steel Construction workshop in Auckland. The company had 20 riggers, welders and crane drivers poached in the last eight months, its managing director said. Photo: Supplied
Fixers typically work on a daily or hourly rate, tying steel rebar together, ahead of pouring concrete.
“I turned up one day in January to a worksite and there was no work happening because the whole steel fixing crew had been poached to another company overnight,” Sweeney said.
Wellington steel fixer ‘Bornch’ Davies said he had to raise wages but still couldn’t find workers – and the three migrant Filipino workers he employed had been poached.
“An extra dollar down the road and they were just gone. That was a shame ‘cos I looked after them,” said Davies.
The Construction Sector Accord told RNZ it was talking to Ministers about freeing up entry for critical migrant workers such as steel fixers, though there had been no decision yet.
From Monday, the salary threshold for the “Other Critical Worker” border exception will be lowered to 1.5 times the median wage, and there’ll be no need to prove the skills aren’t readily available here. But that doesn’t help fixers, who on $25-45 an hour, might not meet the threshold.
The fixers are at the sharpest of the many pinch points in a building sector under seige from Omicron.
Waka Kotahi said there had been “significant increases” in labour lost from its road projects across the country in the past week.
D&H Steel Construction in Henderson, Auckland. Photo: Google Maps
D&H Steel Construction’s major loss of staff early on to Omicron, was “just killing us”, Carson said.
“Production is hugely compromised.”
City Rail Link had one site with half of workers gone, though overall its loss is 450 out of 2000 workers.
Luckily it’s not tunnelling just now; but nearby Watercare is, and has had to halt its boring machine, contributing to an “inevitable” delay in completing the project, until 2026, it said.
At CRL, Sweeney said Omicron would cause as yet uncalculated but “absolutely material” delays.
However, he expected Omicron to peak and pass quickly – in perhaps a month. Resequencing work during Delta last year produced an “amazing”result of losing just six days once the 11 weeks of unworkable Level 4 was factored in, he said.
Yet Omicron was now exacerbating a problem likely to have longer legs – worker poaching.
“The biggest culprits are actually the quasi-government-funded public infrastructure works like CRL,” Wayne Carson said.
“They are high profile, and definitely paying above the market to simply try to secure the limited resources available in the market.”
An extra $4-$6 an hour was being offered; matching that was a counterweight to having a forward-order book that had never looked better.
“We can’t bring resources in from offshore, Government has… really overcooked it in our opinion, which has created a perfect storm of massive demand,” Carson said.
“All that might be achieved at the end is a short term unsustainable increase in labour rates and a hell of a lot more spending offshore to try to resource projects.”
City Rail Link chief executive Dr Sean Sweeney Photo: STUFF/ Ryan Anderson
Sean Sweeney said poaching had been an acute problem for the last six months. However, relief was in sight.
“The bigger issue for us is steel fixers tended to come from… the Philippines, and on short-term visas, and that all stopped,” he said.
“Now, that’s all going to free up again with the changing of the borders. So even the current problem… it’s going to go away in the next three to six months.”
The Omicron squeeze is not landing evenly, with designers and engineers less hard hit as they can work remotely more.
“We’re not seeing major impacts in terms of projects yet,” said head of the Association of Consulting and Engineering Helen Davidson.
“Businesses are managing it well, they have the right procedures in place.”
However, Construction Sector Accord transformation director Dean Kimpton, said of the labour pressures, “I think it’s a foretaste of what will come”.
The forecasts were for a shortfall of 120,000 construction workers by 2025, and the only way through was to build confidence that projects would happen, so companies would invest in people and technology, Kimptons said.
“The sector is a confidence sector.”
He is in monthly forums with Government and scores of industry leaders, with the last two focused on Omicron.
They had raised the problem epitomised by steel fixers – of the immigration bar confronting badly needed workers, who might nevertheless not meet the threshold of earning 1.5 times the median wage.
“That’s an area where the accord is engaging with Ministers.
“There’s been no decision yet, to be fair, but the Ministers are well aware of our concerns,” Kimpton said.
‘Bornch’ Davies would hope so.
He has had to patch up his 10-man steel fixing crew hit in Wellington, by using five from a crew his brother has.
“Since they shut the borders, you know, you can’t get any migrant workers. I’ve been trying to get steel fixers for the last three years… you just can’t get them. It’s nationwide.”
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