Impact of the Skill Shortage on the Construction Supply Chain Performance in Australia

Ming Juan Ding, Ferry Jie, Sommala Sisombat, Bala S. Bandlamudi


The purpose of this paper is to investigate how the skill shortage impacts the performance of the construction supply chain in Australia. The study has adopted a quantitative research method. The quantitative data were collected by conducting a survey of employees who work in construction companies in Australia. A regression analysis was used to analyze the data from 113 respondents. The findings of the study reveal that the construction sector in Australia has high labour costs, but workers are still thinking they are not getting paid enough and cannot invest more in themselves to improve their skills. There is a lack of academic and vocational training programs offered to them. Insufficient recruitment and incentive policies are also main barriers to attract talents to the construction industry in Australia. The situation became more serious during the COVID-19 period due to the lockdowns, lack of skilled migrants, and Government working visa policies. The study implies that firms should have a deeper understanding of the reasons for the skill shortage. Firms also need to devise strategies for hiring the right talent. Further, it was found that quality talent can come from the local or foreign markets. More effective selection criteria should be designed so that the best-fit approach can be implemented.


Doi: 10.28991/CEJ-2023-09-02-08

Full Text: PDF


Skilled Shortage; Construction Supply Chain Performance; Training; Recruitment.


Coelho, C., Mojtahedi, M., Kabirifar, K., & Yazdani, M. (2022). Influence of Organisational Culture on Total Quality Management Implementation in the Australian Construction Industry. Buildings, 12(4), 496. doi:10.3390/buildings12040496.

Ayat, M., Malikah, & Kang, C. W. (2021). Effects of the COVID-19 pandemic on the construction sector: a systemized review. Engineering, Construction and Architectural Management. doi:10.1108/ECAM-08-2021-0704.

Silva, G. A. S. K., Warnakulasuriya, B. N. F., & Arachchige, B. J. H. (2018). A review of the skill shortage challenge in construction industry in Sri Lanka. International Journal of Economics, Business and Management Research, 2(1), 75-89.

Kelly, A. (2021). Commercial and industrial building construction in Australia. IBIS World Industry Report, New York, United States.

Kelly, A. (2010). Multi-Unit Apartment and Townhouse Construction in Australia. IBIS World Industry Report E, 3019, New York, United States.

Prabhakaran, A., Mahamadu, A. M., & Mahdjoubi, L. (2022). Understanding the challenges of immersive technology use in the architecture and construction industry: A systematic review. Automation in Construction, 137, 1–18. doi:10.1016/j.autcon.2022.104228.

Olanrewaju, A. L., AbdulAziz, A. R., Preece, C. N., & Shobowale, K. (2021). Evaluation of measures to prevent the spread of COVID-19 on the construction sites. Cleaner Engineering and Technology, 5, 1–18. doi:10.1016/j.clet.2021.100277.

AISC (2022). Construction: Australian Industry and skills committee. Canberra, Australia. Available online: (accessed on January 2023).

Olsen, D., Tatum, M., & Defnall, C. (2012). How industrial contractors are handling skilled labour shortages in the United States. 48th ASC Annual International Conference Proceedings, 11-14 April, 2012, Birmingham City University, Birmingham, United Kingdom.

Ceric, A., & Ivic, I. (2020). Construction labour and skill shortages in Croatia: Causes and response strategies. Organization, Technology and Management in Construction, 12(1), 2232–2244. doi:10.2478/otmcj-2020-0019.

Hussain, S., Xuetong, W., & Hussain, T. (2020). Impact of Skilled and Unskilled Labour on Project Performance Using Structural Equation Modeling Approach. SAGE Open, 10(1), 1–16. doi:10.1177/2158244020914590.

Ho, P. H. K. (2016). Labour and skill shortages in Hong Kong’s construction industry. Engineering, Construction and Architectural Management, 23(4), 533–550. doi:10.1108/ECAM-12-2014-0165.

Healy, J., Mavromaras, K., & Sloane, P. J. (2015). Adjusting to skill shortages in Australian SMEs. Applied Economics, 47(24), 2470–2487. doi:10.1080/00036846.2015.1008764.

Durdyev, S., & Ismail, S. (2019). Offsite Manufacturing in the Construction Industry for Productivity Improvement. EMJ - Engineering Management Journal, 31(1), 35–46. doi:10.1080/10429247.2018.1522566.

Oseghale, B. O., Abiola-Falemu, J. O., & Oseghale, G. E. (2015). An Evaluation of Skilled Labour shortage in selected construction firms in Edo state, Nigeria. American Journal of Engineering Research, 4(1), 156-167.

Olanrewaju, A., Tan, S. Y., & Kwan, L. F. (2017). Roles of Communication on Performance of the Construction Sector. Procedia Engineering, 196, 763–770. doi:10.1016/j.proeng.2017.08.005.

Karimi, H., Taylor, T. R. B., Goodrum, P. M., & Srinivasan, C. (2016). Quantitative analysis of the impact of craft worker availability on construction project safety performance. Construction Innovation, 16(3), 307–322. doi:10.1108/CI-10-2015-0050.

Navaratnam, S., Satheeskumar, A., Zhang, G., Nguyen, K., Venkatesan, S., & Poologanathan, K. (2022). The challenges confronting the growth of sustainable prefabricated building construction in Australia: Construction industry views. Journal of Building Engineering, 48, 204–218. doi:10.1016/j.jobe.2021.103935.

Industry Skills Forecast. (2020). CPC Construction and Plumbing Services. Artibus Innovation. Available online: (accessed on January 2023).

Lau, A. W. T., Tang, S. L., & Li, Y. S. (2015). The level of TQM application by construction contractors in Hong Kong. International Journal of Quality and Reliability Management, 32(8), 830–862. doi:10.1108/IJQRM-07-2013-0123.

Tang, S. L., Ahmed, S. M., Aoieong, R. T., & Poon, S. W. (2005). Construction quality management. Hong Kong University Press, Aberdeen, Honk Kong.

Walker, D. H. T., & Keniger, M. (2002). Quality management in construction: An innovative advance using project alliancing in Australia. TQM Magazine, 14(5), 307–317. doi:10.1108/09544780210439743.

Safe Work Australia. (2021). Annual Report 2019-2021. Canberra, Australia. Available online: https://www.safeworkaustralia (accessed on January 2023).

Lingard, H., Cooke, T., Zelic, G., & Harley, J. (2021). A qualitative analysis of crane safety incident causation in the Australian construction industry. Safety Science, 133, 105028. doi:10.1016/j.ssci.2020.105028.

Smith, A. (2018). Utilising technology to provide safer crane operations, Lifting Matter. September (2018), 4-6.

Barney, J. B. (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Academy of Management Review, 26(1), 41–56. doi:10.5465/AMR.2001.4011938.

Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171–180. doi:10.1002/smj.4250050207.

Stone, R. J., Cox, A., & Gavin, M. (2020). Human resource management. John Wiley & Sons, Hoboken, United States.

Spencer, L.M. & Spencer, S.M. (1993). Competence at Work: Models for Superior Performance. John Wiley & Sons, New York, United States.

Barney, J. B., & Arikan, A. M. (2017). The Resource-based View. The Blackwell Handbook of Strategic Management, 123–182, John Wiley & Sons, New York, United States. doi:10.1111/b.9780631218616.2006.00006.x.

Gould, S. (2019). Building quality: where does Australia’s construction industry rank globally?. Cushman & Wakefield, Singapore. Available online: (accessed on January 2023).

Bartolacci, F. (2004). Activity Based Costing in the Supply Chain Logistics activities cost analysis. University of Macerata, Macerata, Italy.

Association for Supply Chain Management (ASCM). (2007). Supply-chain Operations Reference-model. Association for Supply Chain Management (ASCM), Chicago, United States. Available online: (accessed on January 2023).

Cserháti, G., & Szabó, L. (2014). The relationship between success criteria and success factors in organisational event projects. International Journal of Project Management, 32(4), 613–624. doi:10.1016/j.ijproman.2013.08.008.

Karimi, H., Taylor, T. R. B., & Goodrum, P. M. (2017). Analysis of the impact of craft labour availability on North American construction project productivity and schedule performance. Construction Management and Economics, 35(6), 368–380. doi:10.1080/01446193.2017.1294257.

Hussain, S., FangWei, Z., & Ali, Z. (2019). Examining Influence of Construction Projects’ Quality Factors on Client Satisfaction Using Partial Least Squares Structural Equation Modeling. Journal of Construction Engineering and Management, 145(5), 1–12. doi:10.1061/(asce)co.1943-7862.0001655.

Karimi, H., Taylor, T. R. B., Dadi, G. B., Goodrum, P. M., & Srinivasan, C. (2018). Impact of Skilled Labour Availability on Construction Project Cost Performance. Journal of Construction Engineering and Management, 144(7), 1–10. doi:10.1061/(asce)co.1943-7862.0001512.

Choudhry, R. M., & Fang, D. (2008). Why operatives engage in unsafe work behavior: Investigating factors on construction sites. Safety Science, 46(4), 566–584. doi:10.1016/j.ssci.2007.06.027.

Aldhuhoori, R., Almazrouei, K., Sakhrieh, A., Al Hazza, M., & Alnahhal, M. (2022). The Effects of Recruitment, Selection, and Training Practices on Employee Performance in the Construction and Related Industries. Civil Engineering Journal (Iran), 8(12), 3831–3841. doi:10.28991/CEJ-2022-08-12-012.

Esser, F., & Vliegenthart, R. (2017). Comparative Research Methods. The International Encyclopedia of Communication Research Methods, 1–22. doi:10.1002/9781118901731.iecrm0035.

Stokes, P., & Wall, T. (2017). Research methods. Bloomsbury Publishing, London, United Kingdom.

Lê, J. K., & Schmid, T. (2022). The Practice of Innovating Research Methods. Organizational Research Methods, 25(2), 308–336. doi:10.1177/1094428120935498.

Patten, M. L., & Newhart, M. (2017). Understanding research methods: An overview of the essentials (10th Ed.). Rouledge, New York, United States. doi:10.4324/9781315213033.

Full Text: PDF

DOI: 10.28991/CEJ-2023-09-02-08


  • There are currently no refbacks.

Copyright (c) 2023 Ming Juan Ding, Ferry Jie, Sommala Sisombat, Bala S. Bandlamudi

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.