Construction Journal June-July 2016

Construction Journal Making strides

The RICS President-Elect calls for action to tackle the UK’s ageing infrastructure networks PG.

6

Driving diversity

Off-site manufacture

A look at the index

How unconscious bias will have a negative impact on your organisation

Modern methods of construction can offer big benefits for the sector

Reviewing the development of new engineering price adjustment formulae indices

PG.

7

PG.

14

PG.

16

June/July 2016

rics.org/journals

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C O NTENTS

RI CS CONST RU C TIO N JOUR NAL

Construction Journal Making strides

contents

The RICS President-Elect calls for action to tackle the UK’s ageing infrastructure networks PG.

6

Driving diversity

Off-site manufacture

A look at the index

How unconscious bias will have a negative impact on your organisation

Modern methods of construction can offer big benefits for the sector

Reviewing the development of new engineering price adjustment formulae indices

PG.

7

PG.

14

PG.

June/July 2016

rics.org/journals

16

Front cover: @ Alamy

CO N TACTS

4 Chairman’s column

CO N STR UCTI O N J OU R NAL

5 Update

Editor: Les Pickford E journals@rics.org The Construction Journal is the journal of the Project Management and Quantity Surveying & Construction Professional Groups Advisory group: Emma-Kate Ryan (Faithful+Gould), Helen Brydson (Faithful+Gould), Martin Stubbington (RICS), Gerard Clohessy (EC Harris), Christopher Green (Capita Property and Infrastructure), David Cohen (Amicus), Andrew McSmythurs (Sweett Group), David Reynolds (Property & Construction Consultant), Tim Fry (Project Management Professional Group Chairman), Alan Muse (RICS) Construction Journal is available on annual subscription. All enquiries from non-RICS members for institutional or company subscriptions should be directed to: Proquest – Online Institutional Access E sales@proquest.co.uk T +44 (0)1223 215512 for online subscriptions or SWETS Print Institutional Access E info@uk.swets.com T +44 (0)1235 857500 for print subscriptions To take out a personal subscription, members and non-members should contact licensing manager Louise Weale E lweale@rics.org

Published by: Royal Institution of Chartered Surveyors, Parliament Square, London SW1P 3AD T +44 (0)24 7686 8555 W www.rics.org ISSN: ISSN 1752-8720 (Print) ISSN 1759-3360 (Online) Editorial and production manager: Toni Gill Sub-editor: Matthew Griffiths Designer: Nicola Skowronek

6 Bold steps

RICS President-Elect Amanda Clack calls for action to be taken to address the UK’s ageing infrastructure networks

7 Beating bias to drive diversity Tara Zutshi and Joanna Barker explore how unconscious bias can have a negative impact on decision-making and your organisation’s effectiveness

10 Investing in gender diversity Teri Okoro considers initiatives that aim to redress the poor representation of women in project management

12 Best behaviour

Project managers’ behaviours and emotions can have a huge effect on team performance, says Eleri Evans

14 Built at a factory near you

Off-site manufacture offers big benefits for the construction sector, argues Kim Vernau

16 Looking at the index

Joe Martin reviews the development of the new price adjustment formulae indices for civil engineering and related specialist engineering

18 Expecting the unexpected

Andrew Byrne and Emma-Kate Ryan advise quantity surveyors on how to implement an effective change management system on infrastructure projects

20 Anti-social media

Will social media lead to a new wave of dismissals, wonders Helen Crossland?

22 Assessing online

The RICS is revamping its online APC process to offer candidates and counsellors more support, says Kirsty Gould

23 By the book

Ellie Scott summarises the Black Book and its relationship with the new International Construction Measurement Standards

25 Getting what you pay for

Shy Jackson reviews a recent court decision that highlights the importance of maintaining a schedule of services

Creative director: Mark Parry Advertising: Emma Kennedy T +44 (0)20 7871 5734 E emmak@wearesunday.com Design by: Redactive Media Group

Printed by: Page Bros

While every reasonable effort has been made to ensure the accuracy of all content in the journal, RICS will have no responsibility for any errors or omissions in the content. The views expressed in the journal are not necessarily those of RICS. RICS cannot accept any liability for any loss or damage suffered by any person as a result of the content and the opinions expressed in the journal, or by any person acting or refraining to act as a result of the material included in the journal. All rights in the journal, including full copyright or publishing right, content and design, are owned by RICS, except where otherwise described. Any dispute arising out of the journal is subject to the law and jurisdiction of England and Wales. Crown copyright material is reproduced under the Open Government Licence v1.0 for public sector information: www.nationalarchives.gov.uk/ doc/open-government-licence

J U N E / J U LY 2 0 1 6

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RICS CON ST RU CT I O N JO U RN A L

CH A I R M A N ’S CO L U M N

CHAIRMAN'S COLUMN We have a perfect storm brewing, says Justin Sullivan, and the only way to ride it out is by focusing on clients’ needs

A

Facing the future

A law firm recently held an event at RICS HQ, which prompted me to compare our professions. We have both existed for about 150 years with around 180,000 members each, yet we have quite different gender demographics. The Law Society has roughly equal numbers of male and female members, for instance, whereas RICS membership is about 80% male and 20% female. Although Louise Brooke-Smith became our first female president in 2014 and this year we welcome Amanda Clack to that post, the Law Society appointed its first female president in 2002.

We’re making progress, but are still behind the times.

And although our male-dominated industry has more female construction lawyers – 62% – than male, only 13% of property professionals are female. We clearly need to look at our employment practices, such as flexible working – not only to address the often-quoted resource shortages but also because attracting more women into our industry is the right thing to do.

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Amanda is a quantity surveyor who took the lead on the RICS Futures project (http://bit.ly/1SbKQPK).

Among other things, this showed we have future resource challenges – such as a massive shortfall in infrastructure capability, needing US$57tr of investment by 2030. How will our profession adapt to deliver this?

One of my non-construction clients recently said he thinks the UK construction industry is broken, as procurement routes and contracts create adversarial scenarios. We also compete to the point where margins are very low and firms then run the risk of compromising on service or becoming commercially carnivorous. He has a point.

At the close of our Quantity Surveying Professional Group Board meetings, we each have 30 seconds to relate the main problems in our different

We compete to the point where margins are very low and run the risk of compromising on service

sectors. At the last meeting, a common issue that came up was attracting and retaining talent. Another was fee levels and how competition is driving these down. This may be good for the customer, but what about our profession?

While we need more resources, our propensity to drive down fee levels creates the risk of poor service. But if we had a standard service level to deliver, would this make fees more robust? I think so. When competitors cut their fees, we could then ask clients whether the opposition is providing the level of service required by their regulating body. RICS does not currently regulate service levels – but would this benefit our clients and our own businesses?

One theme at a recent RICS Governing Council was disruption. When disruptive technology hits an industry, the effects are quick – just look at Airbnb or Uber.

Around 60% of the top 20 US companies are now less than 10 years old. Large businesses often flounder while start-ups grow at an amazing rate.

How are you embracing technology? Not just BIM and 3D printing, but also smart sensors, the ‘internet of things’ and artificial intelligence? I’d suggest most of us have heard of these advances but have yet to consider their impact on our businesses and clients.

So, we have the perfect storm brewing: a significant volume of work, a lack of resources and a Stone-Age approach to technology.

The solution is to be outward-facing rather than inward-looking, by always asking what our clients need and how we can provide it for them. We need to stop thinking merely about how our businesses function, otherwise we will quickly become irrelevant. Only by focusing on client needs will we develop ways of responding to the resource and technical challenges that lie ahead.

RICS standards projects, such as the International Construction Measurement Standards and the Black Book, help to meet these challenges and mean we can offer best-practice standards for clients that are recognised from Croydon to Shanghai.

Getting behind these projects is what will set us apart from the competition. b Justin Sullivan is Chair of the RICS Quantity Surveying and Construction Professional Group Board qsandc.professionalgroup@ rics.org

UPDATE

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UPDATE EU hosts ICMS meeting

TRAINING RICS Diversity and Inclusion Conference 29 June, London

The EU has supported the development of the International Construction Measurement Standards (ICMS) by playing host to a two-day meeting for the ICMS coalition’s standard-setting committee in Brussels in March. This followed early talks with the EU on ICMS last year,

when the importance of the project for globally harmonised cost management and data collection was recognised.

The recent talks form part of an ongoing series at which interested parties discuss the concept and start to formulate what will be included in final draft.

Following the success of last year’s event, the RICS Diversity and Inclusion Conference returns in 2016 with practical examples and case studies, and advances the discussion on our Inclusive Employer Quality Mark (IEQM). Many companies are signing up and pledging their support to the IEQM, and at the conference we will build on this with discussion of our online self-assessment tool, launched in March.

Cost: £195 +VAT n rics.org/diversityconference

New government construction strategy

BCIS finds data collection partner

Just after the Budget in March, ministers quietly launched the new version of the Government Construction Strategy, alongside an infrastructure delivery plan and an updated pipeline. This strategy, the successor to the one launched in 2011 by former Chief Construction Advisor Paul Morrell, covers the period of this parliament to 2020, and aims to cut £1.7bn from the cost of public projects, improve client procurement skills and roll out building information modelling (BIM) Level 3.

The strategy also sets out ambitions for fairer, prompt payment along the supply chain and reducing carbon emissions. While major infrastructure announcements and disability benefits dominated the headlines around the Budget, the Chancellor has allocated £15m for BIM Level 3, far more than Level 2 received.

BCIS has recently teamed up with Barbour ABI to help develop the service’s data collection process.

Barbour will collect project cost data for BCIS to enable the provision of pricing benchmarks for the industry. These featured in the revised BCIS Benchmark Report, which allows users to compare the costs of their own projects with those of others without having to publish any data.

Marianne Chowdhury, Head of Data Collection at BCIS, commented: “This new working relationship with Barbour will help increase the sample size we currently receive from the industry to a more varied, and statistically accurate, level.”

Annual award The passing of David Bucknall in summer 2015 was a sad moment for us all. To mark David’s professional and industrial achievements, the RICS Quantity Surveying and Construction Professional Group Boards have decided to present an annual award to a quantity surveyor who has made a significant contribution to the profession.

The individual will be selected by the Global and UK Professional Group Boards and presented with the inaugural award at a ceremony at RICS HQ on 14 June by Amanda Clack, RICS President-Elect. We would be delighted if you could join us for the ceremony and drinks afterwards.

What APC advice would you like?

Future issues of Construction Journal will include articles dedicated to helping candidates through their Quantity Surveying and Construction and Project Management APC. Please let us know what information and advice you would like to read by getting in touch. n journals@rics.org J U N E / J U LY 2 0 1 6

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RICS CON ST RU CT I O N JO U RN A L

LEADER

Bold steps Amanda Clack, RICS President-Elect, says action is needed to address the UK’s ageing infrastructure

I

nfrastructure provides the connectivity between our cities and the developing urban landscape, and the benefits of investing in it are huge – every pound spent generates a 5–25% return on investment.

The RICS Futures report suggests that, worldwide, there will be 41 mega-cities – defined as cites of 10 million or more inhabitants – by 2030, and infrastructure spending of US$57tr.

In existing economies, growth is already putting a strain on ageing infrastructure. In the UK, roads, rail, air, energy and communication networks need a different approach to meet increasing demand.

In emerging economies, infrastructure is essential to fulfil the demands of urbanisation. For the first time, over half of the world’s population now live in cities, and the UN predicts the level will rise to 66% by 2050.

Around 90% of this urban population increase is expected to be concentrated in Asia and Africa. Successfully supporting this growth will be impossible without the right infrastructure.

The UK angle UK infrastructure planning isn’t truly effective, despite a £411bn pipeline. We have a National Infrastructure Plan, but we need to prioritise it strategically according to its benefits. This will give the market and investors confidence about the future, helping to secure funding and partnerships with the private sector.

We also need to create effective delivery partnerships involving the public and private sectors, with public accountability, joint funding and strong delivery capability.

The government has made a wise decision in establishing the National 6 J U N E / J U LY 2 0 1 6

Infrastructure Commission, a move for which the RICS campaigned. The appointment of Lord Adonis, who has the potential to get many ailing plans back on track, is a positive step. Sitting outside parliamentary cycles, the Commission could deliver a long-term vision and offer a more strategic approach to UK infrastructure needs.

Around 75% of capital projects are still being reported as exceeding budget, so we need to improve delivery – and this is where commercial managers come in to the picture.

Providing value Commercial managers are crucial to proving business cases and ensuring investment returns. They give confidence to clients, investors and the public, and ensure that commercial structures enable effective delivery, while managing costs and providing the promised value.

RICS professionals are highly qualified, capable and in demand – we just need more of them. So we are providing support through our expanding Infrastructure Forum, running training courses and conferences for commercial managers and clients, and have created an Infrastructure Pathway for new entrants to the profession.

The RICS qualification gives commercial managers a passport to work anywhere in the world, because it means clients can quickly understand the value they bring to projects.

The need to be bold Without taking bold steps today, we will create problems for the future. We need to make decisions, commit to them and then fulfil those commitments, otherwise these will affect our GDP. After all, how did Crossrail happen? It happened because it was mandated through legislation and could not be stopped by any individual government.

We have recently seen some very successful examples of infrastructure delivery, such as for the London 2012 Olympic Games and Crossrail. We must understand why these succeeded if we are to replicate these achievements on other projects.

We have to keep working with the government so it understands the benefits the profession and commercial managers bring – to deliver projects on time and to budget, with the right contractual mechanisms.

Unless action is taken, the lights will go off, our trains and roads will reach full capacity and we will never regain the crown of having the world’s number one airport. As an advanced economy with an ageing infrastructure, we will feel the impact quickly.

The next five years There’s a lot to do at a time of huge strain on public finances and the construction industry. If we don’t get more people joining than leaving the sector by 2019, the UK will stop building.

There’s huge demand for the technical skills and resources needed on infrastructure projects. The next five years are about delivering the major projects we have planned – and delivering on our promises. b

Amanda Clack FRICS is RICS President-Elect 2015/16 and takes office as President on 27 June.

Related competencies include Sustainability, Procurement and tendering

P R O J EC T MA NAG EMENT

RI CS CONST RU C TIO N JOUR NAL

Beating bias to drive diversity Tara Zutshi and Joanna Barker explore how unconscious bias can affect decision-making and limit the effectiveness of your organisation

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t is now believed that one of the reasons that society and industry have not made greater improvements in diversity and inclusion is because of unconscious bias.

An unconscious bias is one that we are unaware of and that happens outside our control. It happens automatically and is triggered by our brain making quick judgements and assessments of people and situations. It is influenced by our background, cultural environment and personal experiences.

In 2014, Property Week published the results of a diversity survey called “Open Plan”, which showed that the construction industry is still a long way from being diverse. It found the sector was: b 60% male b 96% able-bodied b 92% heterosexual b 90% white b 66% over 35 years of age.

But if the industry has survived thus far with its current demographic, does a lack of diversity really matter? We believe that it does. Changing client requirements and the war for talent mean we need to ensure that the industry has the right people to contribute to the huge increase in construction and infrastructure that is needed in the UK. There is also evidence that increased diversity helps the bottom line. McKinsey & Company’s report Diversity Matters (http://bit.ly/1QhB4ur) highlights that companies in the top quartile for racial and ethnic equality are 35% more likely to have financial returns above their respective national and industry medians, and those in the top quartile for gender diversity are 15% more likely to have higher financial returns.

It also highlighted that, for every 10% increase in gender diversity on the boards of UK firms, there was a 3.5% increase in earnings before interest and tax.

Furthermore, the Reed Smith report Gender Balancing: It’s Good Business (http://bit.ly/1qu6U1W) showed that in Europe and in Brazil, Russia, India and China (BRIC), companies with two or three women on the board were 41% ahead of the sector average in terms of return on equity, and 56% ahead in earnings before interest and tax.

Diverse teams have also been shown to deliver more innovative and creative solutions. If everyone on a team has a very similar thinking style, background and education, there is a risk that ‘group think’ will take over and that sub-optimal solutions will be suggested and not challenged.

Origins of unconscious bias Our brains have evolved over the millennia to help us deal with the millions of bits of data that we receive in any given moment.

This was really helpful for our ancestors when they had to make snap judgements about whether they should run away from an animal or chase it for food. Our brains developed shortcuts, and one of these that we still use every day is making judgements about people; we make assumptions about their capabilities based on the stereotypes with which we have grown up. However, these shortcuts also drive our biases.

The problem is that unconscious biases are just that – they are not in our conscious awareness. So when putting together a team, we need to take steps to ensure that the best people are assembled for the project, not those that look and sound exactly like the project leader. It is important to understand that everyone will have biases, but we need to be aware of our own and take action to mitigate them.

To uncover your own biases, try the Implicit Association Tests from Harvard University (www.implicit.harvard.edu/implicit).

The most obvious bias that exists in all businesses is affinity bias; this is where we like people who look and behave like ourselves. Studies show that we can often overlook people who have equally good

or better skills and talents for our team if their name does not sound culturally similar to our own or they are of a different race, gender or age group to ourselves.

A bias is a negative or positive belief about a category of people, as in the following examples. b “All millennials are addicted to social media.” b “All Baby Boomers are very loyal to their employers.” b “All women are going to want to have children at some point.”

While these statements might be true for some of the individuals in these groups they are certainly not true for all, and continuing to have such assumptions about people can cause us to discriminate against them.

A culture is formed by the unwritten rules of the ‘way things are done around here’ in a team or organisation. This is usually exemplified by the most senior or powerful people in the organisation.

If all of the senior team ‘look and sound’ the same then it can be difficult for others who ‘look and sound’ different to fit in. The dominant group is called the in-group; the less dominant groups are called out-groups.

In-group members are often unaware of the privileges that the membership of this group gives them, and are also unaware of how it feels to be part of an out-group. For those in the out-groups, they have to be highly conscious of what behaviours get rewarded, and often find they have to conform and adapt to progress. Of course, by conforming they often lose sight of their authenticity, and in adapting they may lose or cover up the diverse skills and knowledge that they brought to the organisation. In her book The Loudest Duck, Laura Liswood uses the analogy of in-groups being like elephants, and out-groups like mice that have to be really watchful and adaptable to avoid being trodden on. n J U N E / J U LY 2 0 1 6

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RICS CON ST RU CT I O N JO U RN A L

P R O J E C T M A N AG E M E NT

Figure 1 An overview of the creation of an inclusive culture

Inclusive culture

b b b b

Senior leaders exemplify behaviours They create flexible working practices They foster an inclusive physical environment They allow individuals to be authentic

Diversity benefits

b b b b

Increased creativity and innovation Better decision-making Out-groups grow, in-groups adapt Team reflects customer base

Talent pool results

n Overcoming biases Considering that we all have biases – some conscious and some unconscious – how do we start creating organisations that are more ready to accept differences, which allow people to realise their full potential without insisting that they conform to cultural norms?

In-groups should practise inclusive leadership skills to ensure that everyone is encouraged to ‘be themselves’ at work and not have to conform to in-group behaviours. Culture can then become more accepting of differences.

This may seem like an impossible task.

However, the first step is to become aware of our own biases, and then to start to make conscious decisions to be more inclusive and contribute to a positive revolution in the workplace.

Here are some suggestions as to how each of us can make a difference: b understand your personal biases by, for instance, taking the Harvard tests b understand what assumptions and beliefs you have and then challenge them b make sure that any recruitment processes are ‘blind’, that is, organised so that you only see the skills and experience on a CV before you decide who to select for interview b ensure that final decisions are not down to one person alone and that your processes for measuring skills and competencies are robust 8 J U N E / J U LY 2 0 1 6

b seek out and work with some of the people you currently have a bias against and get to know them with an open mind, to dispel any assumptions you might hold about them b lead from the front and bring someone into your team who is different from the team norm or demographic b mentor, sponsor or coach someone who is different to yourself b be conscious about how you lead your team because biases often play out in what is known as micro-behaviours, or micro-inequities – for example, you might not really listen to someone you have a bias against, or may not give them as much time or feedback as other members of your team – even though treating everyone equally and fairly is good leadership practice, so make sure you are exemplifying inclusive behaviours b if you notice other people in your organisation not treating someone fairly, give them feedback – they may not realise they are doing it.

Figure 1 gives an overview of the creation of an inclusive culture.

Google is a good example of a company that is looking into this area. It is making great strides to be inclusive and actively seeks to minimise the risk of unconscious bias (http://bit.ly/1qjkePT). It is focusing on: b ensuring that its recruitment process is fair and unbiased

b b b b b

Access to 100% of talent Broader skills and capabilities Improved employer brand Competitive advantage Improved retention

b collecting lots of data so any decision made about promotion or effectiveness is really robust b making sure that its environment is very inclusive b holding everyone to account.

We all have biases, both conscious and unconscious. If you want to have the most effective teams to provide the best results for your clients, you have to start taking responsibility for your own biases and challenge those of your colleagues. As the saying goes: “Be the change you want to see in the world.” What are you going to do increase the diversity of your team? b

Tara Zutshi and Joanna Barker are Inclusion Directors at the Full Potential Group, which provides coaching, team and leadership support tara@fullpotentialgroup.co.uk joanna@fullpotentialgroup.co.uk

Related competencies include Conduct rules, ethics and professional practice, Business planning, Team working, Managing people, Leadership

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RICS CON ST RU CT I O N JO U RN A L

WO M E N I N P R O J E C T M A N AGE M E N T

Investing in gender diversity

D

Teri Okoro considers the poor representation of women in project management and outlines some initiatives that aim to improve the situation

Despite several decades of discussion on diversity and inclusion, wider representation of women in the workforce has still not been achieved.

The stubbornly low numbers of women in project and programme management reflect the overall low levels of women in construction, technology and other male-dominated professions.

We frequently point to the engineering and IT basis of the profession as relevant determining factors, but often overlook the wider cultural context of women in society.

Figure 1 An holistic approach to diverse talent LEADERSHIP - Vision - Communication - Embedding change NURTURING - Opportunity to thrive - Explicit and fair - Challenging opportunities - Developing talent

PROCESSES - Inclusive - Not stifling - Flexible - Resolving bottlenecks DIVERSE TALENT Strategic approach

INNOVATION - Support and encourage - Multiple entry routes - Reward innovation

CULTURE - Culturally intelligent - Emotionally intelligent - Investors

The situation today The Association for Project Management (APM)’s Women in Project Management group (http://bit.ly/1DhfReV) was set up 23 years ago by a group of men and women keen to “increase the number of women” in the profession.

There is unfortunately no baseline data to measure progress, but the following proportions of female employees in different sectors paint a certain picture: b UK project professionals, both APM members and non-members – 26–28% b global RICS project management – 13% b global RICS quantity 1 0 J U N E / J U LY 2 0 1 6

surveying – 13% b global, all surveyors – 14% b German project management – 16% b US project management – 35% b UK construction generally – 17% b UK engineering – 9% b UK architects – 22% b UK construction administrative or support roles 80% (sources: APM, Arras, RICS, IPMA, PMI, ONS, WES, ARB, The ConstructionIndex).

of the various sectors and show that they are certainly not the top career choices for women. The visibility of the few female employees in these industries has not always been great, and career advice appears limited.

Retention is also an issue, with women leaving their jobs for reasons such as long or inflexible working hours, low pay, limited progression, macho cultures and a lack of support when returning after a career break.

These numbers reflect the historically low attraction rate

War for talent UK construction skills

shortages are predicted to have an impact on the industry’s performance by 2020. Today’s debate is couched as a ‘war for talent’, and the skills or talent shortage has several aspects.

Nearly 40% of UK project professionals are aged over 50 (source: Arras) and will retire in the next decade or so. Almost a quarter of UK surveyors are in a similar position (source: RICS). Construction- and property-related professions are not attracting enough young or new employees to replace those due to retire, and the recent growth in the

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economy has only further exacerbated the current and likely future skills shortage.

These issues have many implications at a time when the work environment is more technology-driven, reliant on agility and focused on sustainability. The lack of a sufficiently diverse workforce is contributing to the skills shortfall and hindering the sector’s capacity to respond to growth.

In time, skills shortages affect wage costs, stretch resources and could lead to less-qualified people making decisions that may jeopardise the quality and increase the cost of projects (source: Atkins). Organisations without inclusive practices lose out on the benefits arising from diverse teams, are less likely to reflect client and stakeholder perspectives, and will probably be less competitive and innovative.

Figure 1 outlines an holistic approach to enhancing diverse talent. It addresses leadership and other key elements, and requires internal and external collaboration. Success requires changes in mindsets, including confronting unconscious bias (see also p.7 of this issue). This is the only way to ensure the working culture is transformed to attract and retain diverse talent. A unilateral approach will not work for women.

Returners and hiring Returnships, a US concept, create a bridge back to work for experienced women after career breaks of two or more years, and typically last 10–12 weeks. In the UK, Thames Tideway Tunnel is in the second year of its returner scheme, which is supported by outsourced coaching provision, and it attracts a range of skills in project management, site engineering and quantity surveying.

A leading architectural practice is also participating in this process, with support

from an external recruitment agency, and is helping to create flexible working opportunities for people with previous architectural experience. The practice extols the calibre and conscientiousness of staff recruited through this route, while women who participate overcome the CV gap problem, have a clear route back into work and are given a trial period to review their decision to return.

Hiring and retraining non-cognates to acquire the skills and qualifications of quantity surveyors, project managers and so on is more commonplace for larger firms such as Rider Levett Bucknall and Faithful+Gould. However, small and medium-sized firms can increasingly benefit from this practice. Non-cognate recruitment adverts should explicitly welcome applicants with generic qualifications as training will be provided, which may include sponsored postgraduate qualifications.

Another approach involves offering technical support to returnees for an initial period.

Higher-level apprenticeships have been particularly successful in project management and are used by several engineering employers, such as BAE Systems and Transport for London. Employers have to reconsider the wording and placement of their adverts when trying to recruit women and other diverse talent across a range of ages. Some employers such as Arup have also widened the pool of universities from which they seek recruits.

Retention Retaining female employees requires a range of initiatives such as: b mentoring and career development b transparent appraisal, feedback and progression routes b flexible working arrangements

b leadership programmes b support of women’s networks and similar forums b listening to and respecting diverse perspectives.

Firms that appear in The Times Top 50 Employers for Women, such as Arup, Atkins and EY, all have such approaches embedded in their practices.

Women’s networks exist in other organisations such as Carillion and Lendlease, and these offer workshops and informal networking and mentoring opportunities.

Support from senior management for initiatives is also paramount, with the leadership team itself reflecting or working towards greater inclusion.

Industry-wide initiatives Small and medium-sized enterprises account for more than two-thirds of construction-related organisations, and any initiative that is not embraced by them is unlikely to succeed.

Widespread uptake of the RICS Inclusive Employer Quality Mark should foster improved inclusion (http://bit.ly/1qZEBJ0), while the APM has included diversity and career-break questions in its annual survey to help benchmarking and future strategy development.

The Construction Industry Council also recently published A Blueprint for Change on diversity in the sector (http://bit.ly/1p7vjcZ), and this contains some interesting case studies, while the government is introducing legislation to make larger employers publish pay and gender parity data from 2017.

Inspiring Women (www.inspiringthefuture.org) is a campaign that arranges for professionals to visit schools to inspire the next generation. Women in Project Management encourages its members to join this initiative, and last year it produced a film and associated factsheet

for 11–21-year-olds to promote project management as a career (http://bit.ly/1S8Faw6).

RIBA has launched a Role Model initiative including a wide range of inspiring women (http://bit.ly/1Vew9lH), while a scholarship launched last year at the Saïd Business School for an MSc in Major Programme Management addresses career development and the low representation of women at senior levels.

Embracing diversity There is a renewed endeavour across the industry to make a thorough difference on diverse talent and inclusion, with a greater focus on women. While there is also an ethical aspect to this, the impending skills shortage, the implications for project outcomes as well as professional and corporate self-interest are also relevant. To move forward in a coordinated manner and reflect a more holistic approach, every organisation and individual has to embrace the diverse skills that women represent. b

Teri Okoro is a director of Toca Architects, Chair of Women in Project Management and a member of the CIC Diversity Panel teri@toca-uk.com

Atkins’ report, The Skills Deficit http://bit.ly/1N6fcHs Arup case study Developing staff networks and leaders http://bit.ly/1Sw5OsT Women in Property www.womeninproperty.org.uk

Related competencies include Sustainability, Managing people

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11

RICS CON ST RU CT I O N JO U RN A L

P R O J E C T M A N AG E M E NT

Your behaviours and emotions can have a huge impact on your team’s performance, says Eleri Evans

Best behaviour

T Team leaders face many challenges when delivering a project. Some of these are around timescales, budget or the supply chain. These are visible, and hard, quantifiable information is usually available to assess any impact these may have.

Other challenges are not so easy to see or quantify.

All team leaders seek to have healthy, engaged and high-performing teams – however, this is not always easy to achieve. But if you can create an environment that helps your team flourish and be happy in their work then they are likely to be more productive, which can help ensure project success.

The flip side is trying to avoid team members getting frustrated, discouraged or anxious. If this happens they can be distracted from their responsibilities, which can lead to poor judgement and poor quality of work.

There are many external factors that influence a project’s success but an important element is the impact you have on the team’s performance. Your behaviour

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affects how other team members behave and react to situations. Your influence is far-reaching and affects every team member by shaping their behaviours, now and in future.

Create the right environment and your projects have a greater chance of success, which will allow you to progress your career and receive the appropriate rewards. Your projects will run more smoothly for the following reasons. b You get better at managing your behaviours when asking the team to do things, questioning whether they are on track or when you are investigating issues with delivery. Taking an approach that is aligned to the mix of the personalities in the team can increase engagement and improve results. The team’s confidence grows. b When you handle problems objectively and support those involved, issues are brought to your attention – your team learns that, when they highlight issues, you are good at managing your emotions and will not over-react. They do not need to fear you and are therefore more open to raising concerns and discussing options. b A calm, consistent leader has gravitas and builds trust with the team. The trust you build is returned, and when you are not there, the work still progresses.

Your journey as a team leader will also be smoother and less

of a roller-coaster ride as a result, because: b when problems arise you handle them calmly b when someone makes a mistake you work things through with them to identify a solution b your frustration levels are low.

Focusing on your team is an ongoing activity and takes effort. When the team see you behave in ways that foster their cohesion, they will start behaving in the same way. So where do you start?

A lot of work has been done around how behaviours and emotions affect your success, under the banner of ‘emotional intelligence’.

As a team leader, what you do and the way you behave affect the way people measure you. People who can regulate their emotions pay more attention, work harder and achieve more. Improving your emotional regulation can lead to benefits in all areas of your work, including your judgement, decision-making and leadership.

Image © Alamy

People who regulate their emotions are also better at motivating others, resolving conflicts and being more caring towards others.

However, regulating your emotions does not mean that they go away; they are real and valid, but should not overwhelm you. For example, being anxious before an important meeting is understandable, but you should use the energy from that anxiety to be better prepared, not create a self-fulfilling prophecy in which you fail.

Neuroscience has shown that you can train your brain by repeatedly practising new behaviours. Your brain builds the pathways needed to turn behaviours into habits. Just as when you are exercising your other muscles, repetition and changing the load allows those pathways to grow.

Your challenge as a team leader is to change, although personal change is not always easy. Here are some pointers.

1. Pick an area to change; for example an emotion you

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Emotional intelligence [is] a subset of social intelligence that involves the ability to monitor one’s own and others’ emotions, to discriminate among them, and to use the information to guide one’s thinking and actions.

Peter Salovey & John D. Mayer, “Emotional Intelligence”, 1990

wish to manage better or a behaviour you would like to change. It may be that you wish to manage your levels of frustration, how you handle fear when you make a mistake or your low confidence in certain situations. Look for any emotion that is pulling your focus away from your day-to-day work.

2. Identify why you would like to change. What outcome do you want? What is the benefit? For example, your frustration may distract you from the task in hand and you may pass this on to your team, meaning they may also get distracted. You may worry you are not seen as being a leader in control, which may affect your confidence. You want to change to show gravitas and be a leader who people will follow. You want to maintain the team’s focus.

3. Understand why the emotion or behaviour serves you as it is. Does your emotion or behaviour provide a distraction from the real issue? Does it allow you a get-out from looking at the real problem? For

example, if you are frustrated because someone constantly fails to deliver, what could this be covering? Could your frustration be hiding the fact that you do not understand how to change this situation?

Is this person failing to deliver in order to retain some power over you as the manager? As a leader and manager, your role authorises you to own the power of managing the team.

How do you change what you do in order to get the balance of power back to where it should be?

4. Decide what you are going to do the next time you are faced with the same behaviour or emotion. Decide on the goal and the action plan. Is it time to tackle this issue head on and reclaim the power from this person? Or is it time to put some actions in place to discharge anything that is causing tensions and prompting this person to behave the way they do? Or does this person need some help to get up to speed?

5. Learn ‘the new way’.

As you start trying new approaches you will find

yourself in a position where you know the ‘old way’ is not the right way. You may also be confused about what to do next. What is ‘the new way’? Have the courage to continue through this uncertain phase – knowing that you will reach a point where you realise that getting frustrated can use up energy that you can direct into other areas. Use the energy initially to find a different approach. You may feel very uncomfortable and frustrated because managing your emotions may take a lot more effort. Follow this discomfort and use it to understand better how the old behaviour was serving you.

6. ‘The new way’ becomes ‘the way it is’. Follow steps 3, 4 and 5 until the new approach becomes normal and ‘the old way’ feels like something others would do.

Once you have found a way to manage your frustration in this scenario, you will take the learning into other situations.

Personal change takes time and ongoing effort. Change is also incremental and you should focus on one behaviour or emotion at a time. There are two ways to achieve the change you want: on your own or with the guidance of others. As with any project: b you pick an area to work on, then set a goal and define the actions to get there

b if the goals are small and achievable you can do this through managing the change yourself (self-coaching); for larger or more complex changes, or for areas that you find difficult to manage on your own, you can work with a coach b whatever your approach, the key focus is the goal and you need to monitor progress to make sure you keep on track; obstacles will arise and you may need to revisit what you are doing and plan again if necessary b focusing on the goal and working towards it tirelessly will deliver the results that you want.

It can be exhilarating to do something in a way you would never have done before and see that you have changed in a positive way. Knowing that you are now different brings a sense of achievement and will boost your confidence. This is reflected in the way others see you. b

Eleri Evans is Director of Trans4rm and Secretary of the APM’s People Special Interest Group eleri.evans@trans4rm.org.uk

Related competencies include Communication and negotiation, Team working, Leadership, Managing people

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13

RICS CON ST RU CT I O N JO U RN A L

O F F- S I TE M A N U FAC TUR E

Built at a factory near you

F

Kim Vernau argues the need for off-site manufacture or the UK to overcome the chronic housing supply shortage, the industry needs to look beyond traditional forms of construction.

The requirement to fill the supply and demand gap of more than 100,000 homes a year has to be met with housing that is both sustainable and of the highest quality. A solution can be found if the industry embraces off-site or non-traditional forms of construction.

Non-traditional construction systems are also known as off-site manufacturing (OSM) or modern methods of construction (MMC). They essentially refer to any non-traditional form of construction methodology. Prefabrication in a factory setting is by no means a new concept and the benefits are clear: speed of construction, reliability of materials and manufacture, improved performance and potential reduction in construction costs if units can be delivered at scale and to repeatable design.

According to a report from the Union of Construction, Allied Trade and Technicians, Constructions skills shortages a result of 30 years of failure (http://bit.ly/1KoWh3Y), the UK is facing its biggest skills shortage for a generation, with estimates showing that the construction industry needs 35,000 new entrants just to stand still. With a huge shortage of skilled workers in the UK, building firms have been forced to double the wages for tradespeople from abroad, increasing the cost of traditionally built homes. Of course, some OSM systems will not be immune from these issues, particularly where there are elements of on-site works such as brick claddings.

Conventional housebuilders know what their customers want and are unlikely to move fully to non-traditional forms of construction, although a number are trialling various off-site solutions. While they may engage with the concept on the periphery, the real growth area for off-site methods will be the burgeoning private rented sector (PRS). At a seminar

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hosted by BLP Insurance and the British Property Federation in February 2015, Brian Kilroy, BLP Business Insurance Development Manager, said: “A quarter of Londoners are already living in the PRS and this figure is expected to overtake the owner-occupied sector in the next decade”(http://bit.ly/1OHPnrh).

Most of these PRS developments coming to market can be replicated and this model is suited to the off-site industry. Furthermore, funding in this sector will come predominantly from institutional investors looking to invest in secure large-scale developments, where the economic benefits will be matched by the consistency and sustainability that OSM provides.

Concerns One of the main advantages of OSM is quality. An article in the January 2016 issue of Planning and Building Control Today (http://bit.ly/1ZJMKB2) confirms that buildings in the UK currently fall short by up to 30% in terms of how they were originally designed to perform, while properties built in a factory will have a higher level of quality control compared with a construction site, improving the performance of the building over time.

This improved performance from off-site techniques should translate into reduced energy and maintenance costs.

While the benefits of MMC and OSM are clear, they do not come without challenges. Concerns about systematic

To overcome the chronic housing supply shortage, the industry needs to look beyond traditional forms of construction Images © Regal Homes; Greencore Construction; Urban Splash

1 failure, fire spread and water ingress, have been raised around the use of off-site techniques, both during and after construction. These concerns are being addressed by the Buildoffsite Property Assurance Scheme (BOPAS), which provides long-term assurance to mortgage lenders, valuers, funders, landlords and homeowners that properties built using non-traditional forms of construction will be durable for at least 60 years, without the need for disproportionate maintenance.

BOPAS, which was launched in March 2013, was developed by Buildoffsite, Lloyds Register and BLP Insurance with RICS, the Council of Mortgage Lenders and the Building Societies Association. The BOPAS process gives an independent assessment of quality and reassurance from inception through to construction for investors, developers and owners.

Case studies We are now seeing schemes being built using off-site systems that have been through the BOPAS accreditation process. One built by Regal Homes

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2 m1 B & K cross-laminated timber solution built by Regal Homes

3

k2 SIG Insushell volumetric system developed by Urban Splash n3 Hempcell system designed and developed by Greencore Construction

and completed in 2015 provides 51 new homes, including many for the Islington and Shoreditch Housing Association.

It uses the BOPAS-accredited B & K cross-laminated timber solution and benefits from a BLP Insurance 10-year structural warranty.

Running parallel to the structural warranty assessments, BOPAS accreditation addresses the concerns of funders and valuers alike. It combines both the design checks undertaken as part of the BOPAS assessment and site-specific design with the workmanship checks forming part of the BLP Insurance Structural Warranty.

Of course, it is not always obvious that a home has been built using off-site techniques. Behind the brick facade and thatched roof shown in image 3 lies the BOPAS-accredited Hempcell system, designed and developed by Greencore Construction. This system comprises a breathing, timber-framed wall panel incorporating 120mm of Hemp-Lime Bio composite insulation and 180mm natural-fibre insulation. The solution combines high-energy performance with natural low-carbon materials. This

property also benefits from a BLP Insurance Structural Warranty, which alongside the BOPAS accreditation provides a robust and seamless risk management approach aimed at reducing defects and improving quality.

Volumetric approach This is much more familiar in terms of off-site fabrication. The SIG Insushell volumetric system has been through the BOPAS process and comprises factory-completed modules that are transported to site and stacked on site-constructed foundations. These are site-specific and may typically comprise concrete pads or pile-and-ground beams, depending on ground conditions. The whole is structurally interconnected to provide composite action to comply with the UK codes and is specifically designed for each structure. A drained-cavity external-cladding system is added on site to complete the building.

Given the reassurance that BOPAS provides, OSM systems and other innovative construction methods can provide a sustainable, cost-effective solution to the increasing shortage of

housing supply and there is currently a surge in interest from manufacturers seeking accreditation.

Government support for OSM is essential in keeping the momentum going, and in its Residential Policy paper (http://bit.ly/1PEt7zf), RICS urges ministers to support non-traditional construction and endorses BOPAS as an independent assessment process to ensure that such systems are durable for at least 60 years. b

Kim Vernau is CEO at BLP Insurance kim.vernau@blpinsurance.com

Related competencies include Construction technology and environmental services, Project administration, Sustainability

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15

RICS CON ST RU CT I O N JO U RN A L

I N F L ATI O N I N D I C E S

Looking at the index In the first of two articles on the new price adjustment formulae indices for civil engineering and related specialist engineering, Joe Martin reviews the development and consultation process

P

rice adjustment formulae indices (PAFIs) have been the industry standard for use in index-linked inflation adjustment clauses in the UK since their introduction in the early 1970s.

The 1970s and early 1980s were periods of high inflation. In the 10 years from 1973, the annual average increase in building cost inflation was nearly 16%, whereas over the past 10 years it has averaged less than 3% (see Figure 1).

PAFIs were introduced to help deal with high levels of inflation, and in 1974 two-thirds of building contracts were let on a fluctuating basis. But with more moderate rates of inflation in recent years, the use of fluctuating contracts for buildings has almost disappeared.

However, the longer periods involved in civil engineering contracts and the more volatile nature of the costs have meant that inflation adjustment clauses are still prevalent in this sector. BCIS estimates that they are used on £2.5bn worth of UK work annually. Index-linked inflation clauses are also still widely employed in longer framework and maintenance-term contracts, both for buildings and for civil engineering projects.

Industry need After the development of a new series of PAFIs for highways maintenance and discussions with the Civil Engineering Contractors Association (CECA), the need for a review of the civil engineering series became clear. It is important that the range of indices provided reflects the techniques, materials and specialisms used in current infrastructure projects – both those representing a large portion of the costs and those subject to large price movements. It is also important that the indices’ movement reflects inflation pressures outside contractors’ control. It was agreed that both the indices’ scope and calculation should be reviewed.

On large infrastructure contracts, it is apparent that indices from the 1 6 J U N E / J U LY 2 0 1 6

Building, Civil Engineering and Specialist Engineering series are used in combination, so the review covered the Specialist Engineering indices that are used on civil engineering schemes as well as the Civil Engineering series itself.

Commenting on the review, CECA Chief Executive Alasdair Reisner said: “The fair allocation of risk is key to achieving the best value on a contract. Requiring contractors to take responsibility for risks they cannot assess or manage will result in either a high risk premium or commercial pressures caused by insufficient provision. The availability of PAFIs allows the inflation risk to be modelled to the contract. We therefore welcome this review.”

Steering group While the PAFI series is produced by BCIS, the indices ‘‘belong’’ to the industry as a whole, so we were keen that the consultation embraced all organisations whose members may be affected.

BCIS established an industry steering group to help direct the review and production of the indices. This included representatives of CECA, the Institution of Civil Engineers, the Chartered Institution of Civil Engineering Surveyors, the Association for Consultancy and Engineering, the Construction Products Association, the Highways Agency, Crossrail, the Highways Term Maintenance Association, the Office for National Statistics (ONS), the Cabinet Office and the RICS Infrastructure Forum, as well as individual contractors, sub-contractors and consultants.

The review looked at the indices’ scope to ensure that all appropriate costs were covered, and at the compilation of the individual indices to ensure that they were representative of the resources included.

Consultation BCIS carried out an online survey of PAFI subscribers and other stakeholders to establish how the indices were used and identify any gaps in the information.

A question about the size of contracts on which the indices were used saw a

mixed response – ranging from £100,000 to billions of pounds – but it seemed that contract length was more important than value, where responses suggested the indices were used on individual contracts in excess of two years and on contracts let under a longer-term contract or framework. It also showed that the indices were used internationally.

The results showed the indices were most widely used on NEC contracts (66%), with ICC/ICE/CECA contracts (24%) and FIDIC contracts (10%).

The survey asked about the use of the indices in sub-contracts. This seemed to be fairly common, but some respondents said the sub-contracts were often subject to the same indexation as the main contract rather than indices directly relating to the sub-contract. This is to be avoided, as the inflation adjustment is unlikely to reflect the sub-contractors’ cost inflation, thus introducing a risk that the sub-contractor will need to price.

Responses to a question about how indices were weighted on contracts suggested that, in most cases, this was predetermined by the client, but where there was early contractor involvement, indices were agreed with the contractor during the competitive dialogue. The consultation also showed that, on most projects, weightings were set for the contract, effectively applying a single index to all valuations. Fewer than 10% of the respondents reported that they worked on contracts where the individual resource indices were applied to the work in individual valuations, which was the prevalent method of application when the formulae method of index-linking contracts was introduced.

The survey also found that the indices were used for purposes other than calculating price adjustment for inflation in contracts, including contract administration, estimating, cost planning, inflation guidance and rent reviews in mineral agreements.

We asked too which indices other than PAFIs were used in inflation adjustment clauses. This received limited response, but showed that general inflation indices

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Figure 1 Construction cost inflation – annual percentage change

30 25 BCIS General Building Cost Index BCIS General Civic Engineering Cost Index

15 10 5

-5

– the retail price index (RPI) or consumer price index – are the most common alternative, with some use of other ONS and BCIS general construction cost indices. There was also reference to the British Electrotechnical and Allied Manufacturers Association’s specialist indices for electrotechnical equipment.

We have previously commented on the use of RPI in these articles, because this introduces a double risk for the contractor: the risk of retail price inflation and the risk due to inflation in their own costs. The introduction of such risks will result either in a risk premium being incorporated in the initial price, or in pressures on the contractor due to insufficient provision for inflation.

There was a suggestion that we might produce predetermined combined indices by trade or sector as well as the resource cost indices, but the steering group felt this might be confusing and that the most flexibility would be provided by publishing the resource cost indices alone.

Suggestions for expanding the scope of the indices fell into three categories.

1. Indices that reflected the changing role of the contractor in modern procurement methods such as professional services, administration and

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991

PERCENTAGE

20

YEAR

management, and overhead items such as site accommodation and transport.

2. Indices for additional materials; there were not many suggestions for these, however, as the issues raised were generally dealt with in the review of the indices calculation.

3. Specialist engineering; in the existing series, the specialist engineering indices related mainly to buildings so we have introduced a whole new section of specialist engineering indices related specifically to civil engineering contracts covering structural steelwork, electrical engineering (including cables), mechanical engineering, sprinklers, and lifts and escalators.

The consultation process was a splendid example of the industry coming together with the RICS to improve working practices. Engagement from the infrastructure sector, particularly from contractors and from clients who are the contracting parties to inflation adjustment clauses, brought industry experience and expertise to the exercise. It was sometimes difficult to match the desire for more detail with the practicalities of applying the indices, and some specific requests could not be generally applied

Figure 1 © Source: BCIS General Building Cost Index and General Civil Engineering Cost Index

or matched with available data. However, the enthusiasm of the steering group helped us concentrate on the art of the possible, setting us a realistic task in producing the new series. b

Joe Martin is BCIS Executive Director jmartin@bcis.co.uk

The new series is available to current subscribers to the PAFI online service (http://bit.ly/1PFdzyu) and the RICS Infrastructure Information Service (http://bit.ly/1BQwhZW) The second part of this article will look at the detail of the indices themselves.

Related competencies include Data management, Commercial management of construction, Contract practice, Procurement and tendering, Design economics, Cost planning

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17

RICS CON ST RU CT I O N JO U RN A L

CH A N GE M A N AGE M E N T

Expecting the unexpected

T

Andrew Byrne and Emma-Kate Ryan advise quantity surveyors and project managers on how to implement an effective change management system

he construction and operation of infrastructure is affected by many things – from the volatile global economy and multi-jurisdictional operations to joint venture projects and the size and scope of contracts. Managing change in a structured and controlled manner is therefore essential.

Change is mentioned regularly in boardroom discussions and is an everyday concern for quantity surveyors. They are increasingly challenged to ensure their contractual change management practices mitigate project risks and avoid extra complexity. Diligent practices can improve collaboration and help achieve the increasingly rigorous targets that are set in programme business cases.

The number of interfaces between parties that are required to manage large-scale infrastructure projects can run into many thousands, so every error may potentially cause a financial or logistical nightmare. Enhanced cooperation is therefore crucial.

Poor management of change can lead to decreased productivity from contractors, sub-contractors and the client, which inevitably leads to programme delays. It may also cause contractual relationships to fail, and affect related parties.

One symptom of poor change management can be an overly optimistic culture, where the key players cannot foresee the future impact of changes. If an overly optimistic culture is allowed to prevail in the project team, warning signs that things are not going to plan may be ignored.

Managing change The industry recognised the need for a comprehensive contract that managed change effectively; the result was contracts such as PPC 2000 and the NEC3/ECC suite of contracts, which advocate more formal collaborative working. The Institution of Civil Engineers publication Managing Change suggests that the steps to manage change are to identify, to assess and to manage. The NEC3/ECC contractual mechanism for change is the ‘compensation event’, and this article will refer to change in that context.

Identifying the change Changes can stem from anything, such as an error or omission in the contract documents to abnormal weather conditions – but determining the validity of the compensation event is crucial.

A helpful way to do this is by using the four-point test from Managing Change, as follows.

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The compensation event is valid if: 1. the event does not arise from a fault of the contractor 2. the event has happened, or is expected to happen 3. the event affects defined cost, key dates or completion 4. the event is one of the compensation events that is stated in the contract.

If these four criteria are satisfied, then the change can be identified as valid. The contractor can then submit quotations for this event.

Assessing the change The change owner should check the contract to determine how changes should be processed. A collaborative approach requires organisations to report changes early and work together to reduce any negative impact on a project. This includes providing all evidence to support the change, enabling its fair and proper assessment.

Most changes in infrastructure stem from the use of lump-sum price contracts, and will affect time and materials.

While the change is being assessed, the contractor should, if possible, be given permission by the change owner to proceed with the works. A fixed price for change-related works can be agreed once sufficient information on its scope and impact is available. A standard process is then generally followed to check material quotes and invoices so as to ensure they align with the quantities claim. These should adhere to any agreed rates in the contract: either day rates or pro-rata rates forming the original contract sum.

A change control register should categorise and manage incoming changes, and record open or closed events.

Changes should always be assigned to an owner and classified according to the potential impact on the project.

This allows the change owner to review and escalate issues early, and avoid creating a culture where such issues are allowed to develop.

Implementing the change In the case of NEC contracts, a compensation event is implemented when one of the following occurs: b the project manager notifies their acceptance of a quotation b the project manager notifies the contractor of their own assessment b a contractor’s quotation is treated as having been accepted by the project manager (if after two weeks the project manager has not responded to the compensation event notification from the contractor).

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Implementing the change includes considering the effect on the programme. Submission of a new programme incorporating the change is required to demonstrate any of the concurrent and consequential effects that it will have on other elements.

Going further

A change will always incur cost, so assessing, monitoring and managing it effectively is vital

Change management is intrinsically linked to project governance, which ensures that additional instructions contributing to change are made with the proper project authority, usually reserved solely for the project manager. If senior management realises that changes being processed indicate problems, they can put those changes on pause.

A change will always have a change owner, but it should be associated with or escalated to a senior manager who can review its potential impact. Where the escalation contact has been agreed by the sponsor, it should be included as a key decision point in the governance of a project.

Public sector account audits Record-keeping will include final accounts. Most public sector contracts contain clauses that mean the accounts of clients, contractors and sub-contractors are subject to audit. This is especially prudent with infrastructure projects because of the large amounts of public funding and the high risk of change driven by inherent project complexity. A change will inevitably incur a cost â&#x20AC;&#x201C; if not directly related to the change, such as through fees â&#x20AC;&#x201C; so assessing, monitoring and managing a change effectively is essential.

Practical advice

Conclusion

Using an incident-based system Rather than managing specific changes, quantity surveyors on complex infrastructure projects should use an incident-based system for managing change. This is where the initial change is split into several elements, with each element affecting several components of a works package. For example, a change to a railway station specification may affect several stations along the line.

Once the core change is logged, the varying impacts of the sub-changes should be assessed. For example, a change may be given one overall title, but pricing the costs for each station will be affected by different designs. Works driven by larger changes may also be contracted to different suppliers under different terms.

Separating sub-changes allows the quantity surveyor to monitor their impact, such as delays to the project, while ensuring that all costs are assessed. It also allows the client to gain a better understanding of the time, cost or quality impact of proposed changes before instructing a contractor to proceed with any changes to the scope of their work.

The impact of poor change management can be vast. There is clearly still scope for major public-sector contracts to fail, so we must implement the basics diligently and consistently; although contracts may define practices, these may not be implemented as thoroughly as required. Key players should impose a control structure and be aware of any warning signs. A simple method of managing and escalating change, linked with configuration management, is crucial to ensure contract management practices avoid the pitfalls that lead to failures on public-sector contracts. They will also allow clients to trust quantity surveyors to deliver projects under budgetary and time constraints.

While the above commentary covers the fundamentals of change management, the key message is that the parameters through which change is monitored, managed and valued should not vary â&#x20AC;&#x201C; regardless of the size of the project. The most important aspect of change management is sticking to the basic principles, as these apply no matter what the value of the change or project. b

Timescales for agreeing change The project manager has a short time frame of two weeks to respond to a compensation event. Maintaining a register of incident-based change allows the quantity surveyor to adhere to timescales on agreeing a change, just as they would with contractor payments; it is another tool to ensure good cash flow and productivity among sub-contractors.

Record-keeping Keeping detailed records up to date is crucial to ensure the quantity surveyor receives a full breakdown of the change and that any associated outstanding documents are promptly received. A full record of change assessments should also be kept, which is particularly important when managing complex changes because the quantity surveyor may make multiple assessments as more information is provided.

Andrew Byrne is an associate with Gardiner and Theobald a.byrne@gardiner.com Emma-Kate Ryan is a director of Ursus Commercial emma-kate.ryan@ursuscommercial.co.uk

Related competencies include Contract practice, Project administration, Project audit, Project financial control and reporting

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RICS CON ST RU CT I O N JO U RN A L

L E GA L

Will social media lead to a new wave of dismissals, asks Helen Crossland?

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Anti-social media

The unprecedented growth of social media has changed the face of business. Platforms such as Facebook, Twitter and LinkedIn have become essential marketing tools for organisations, which can reap dividends by increasing their profile, contacts and customers. But employees’ use of social media can also put them on a legal collision course with their employers.

Personal and professional lives now intertwine thanks to the dominance of IT in both, as well as increased time spent at work and the expectation that some staff will have to deal with work matters out of hours.

The press regularly entertains us with accounts of employees finding themselves in hot water by tweeting colourful insights about their boss or posting snapshots of a wild night out when supposedly laid up in bed with flu.

From a legal perspective, social media has prompted a new breed of claims, not only from employees’ candid posts about their work and private life, but by publishing confidential work information, 2 0 J U N E / J U LY 2 0 1 6

or things that could damage their employer’s reputation.

Employees can also come unstuck by persistently tweeting or posting updates in work time, which may call into question their productivity and their value to the company.

Misuse of social media by employees during or outside work can therefore create serious risks for businesses, and may also constitute gross misconduct. An employer is in a prime position to commence disciplinary action where an employee has misused social media, whether during office hours or outside work.

Case studies There are now numerous cases in which employees’ inappropriate use of social media has been ruled by an employment tribunal as justifying dismissal.

In one such case, an employee made derogatory comments about his employer on Facebook, which included “that’s why I hate my work… its not the work its the people who ruin it nasty horrible human beings” (sic) and “on standby tonight so only going to get half pissed lol”.

In this case, the tribunal was satisfied that summary dismissal was within the reasonable range of responses. It is not always as clear-cut as this, however. In another case, an employee was found to have been unfairly dismissed for posting the following on Facebook:

“I think I work in a nursery and I do not mean working with plants.” The tribunal found that the comments were “relatively minor” and there was nothing to suggest the employer had suffered any embarrassment, or that its relationship with clients had been damaged.

The employee, who had a clean disciplinary record, had immediately apologised for her conduct as well.

Social media policy The lesson to be gleaned from the above is that each transgression must be assessed on the basis of the facts and considered holistically. That said, a well-drafted social media or communications policy can be instrumental in setting benchmarks for employees’ use of these channels and will also bolster an employer’s ability to act when a member of staff deviates from those rules.

While some employees’ roles may never bring them into contact with email or the internet at work, a

A well-drafted social media policy can be instrumental in setting benchmarks for employees

communications policy can still cover the use of social media by staff on their own devices, and also apply to social media use outside of work hours.

Disciplinary policies should be used in tandem with social media and communications policies, and match stated examples of misconduct or gross misconduct.

In any situations involving misdemeanours with the use of social media, the employer must conduct any disciplinary procedure in accordance with its own policy or the Code of Practice from the Advisory, Conciliation and Arbitration Service (Acas). Any offences should be handled consistently in order to avoid claims of disproportionality, of there being a ‘witch hunt’ to dismiss a particular employee, or of unfair leniency.

RI CS CONST RU C TIO N JOUR NAL

But where an employee is found to have made derogatory or offensive comments, conducted themselves in a way that has or could have damaged the organisation’s reputation, or breached company policy by excessive personal use of social media during work time, dismissal is likely to be a justifiable sanction.

Are employers free to snoop?

It has been well publicised that employers have free rein to view employees’ personal messages on work equipment and to use any damning discoveries against them.

However, this is not strictly true. Evidence obtained by chance or that at face value may reasonably be considered work-related – for instance, Image © IStock

messages that are found on the company’s email system or on an account permitted by the employer for business use – can be used by the organisation, provided that it has a policy permitting its internet and email facilities to be monitored.

Viewing data that is obviously personal, such as that found on an employees’ password-protected email account, does not constitute acceptable monitoring and could amount to a breach of privacy. An employer is also permitted to read postings on social media that are accessible to the public or where the employees’ connections include colleagues and work contacts.

The employer’s position will always be strengthened, however, if it has a written policy stating that use of its internet and email facilities is monitored and this policy is actively communicated to staff.

In addition, employers may wish to consider taking the following steps: b blocking access to social networking websites from work computers to reduce risk to IT systems from breaches of security, viruses etc. and preventing employees’ use of social media in work time b imposing a blanket ban on using personal mobiles or devices during working hours: the gain derived from this needs to be weighed against creating a potentially unhappy and disaffected workforce

A balancing act

Viewing data that is obviously personal does not constitute acceptable monitoring b allowing employees to use social media at work with certain restrictions b allowing staff to access permitted internet sites from computers in designated areas only, such as the canteen, and during defined periods, for instance, lunchtimes and before and after work b training employees about internet and security issues, as some may not appreciate how their actions could bring the organisation into disrepute; they may also not know how this can embroil their employer in a legal claim, where their social media posts amount to defamation, discrimination or harassment of a colleague or business contact, or where they have divulged commercially sensitive or confidential information b ensuring that users understand how IT system privacy settings work so that they do not inadvertently make company information known more widely than intended.

When addressing the use of social media by their staff, employers must be careful to temper their duty to protect their business with entrusting employees to behave responsibly when they use social media.

All staff enjoy a right to privacy and freedom of expression, but the law will back employers where an employee’s conduct undermines the business or the unwritten relationship of trust and confidence between the parties, provided that the evidence for such has been lawfully obtained.

Employers should not ignore the possible damage that employees’ misuse of social media can cause. However, this can for the most part be managed and controlled by educating employees and maintaining an effective communications policy. b

Helen Crossland is a Partner at Seddons helen.crossland@seddons.co.uk

Related competencies include Conduct rules, ethics and professional practice, Managing people

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RICS CON ST RU CT I O N JO U RN A L

AS S E S S M E N T

Assessing online

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The RICS is revamping its online APC process to offer candidates more support, to enable easier access for counsellors and to expedite submission, says Kirsty Gould

e constantly review our process for assessments to ensure their objectivity and rigour is maintained, any potential confusion over routes to membership is avoided, and they are globally consistent. Based on RICS’ most recent analysis, our assessments continue to evolve so that they are fit for purpose.

Our research has revealed some areas in the assessment methodology where processes could be improved, however, together with opportunities to increase rigour and consistency.

The evolution of the membership assessments plan has been defined to ensure that RICS assessment procedures remain reputable, cutting-edge and relevant around the world.

The plan is based on seven pillars of work. One of these is for us to provide greater candidate support, and the project team want to share how we are doing this.

Currently, the assessment process for the majority of candidates is manual, with limited support and connection for candidates or counsellors throughout the process. It also includes around 6,000 candidates who are no longer engaged, and have stopped working towards their assessment; lack of support has been identified as a reason for this by both candidates and employers. Our stakeholders have said they need the process to be simpler, clearer and available online.

Online pilot test We introduced an online application for enrolment in the UK last July, as a pilot test. More than 3,000 people had used this facility by the end of October, with 1,400 progressing to become fully enrolled candidates or student members. As this functionality is integrated into the RICS systems, we can now see those who part-completed the application, allowing us to contact them on an individual basis to help and support them through the process.

The assessment environment is not simply about having a system or an online presence, but improving the entire experience. Success will lead to: b personalised candidate communication b improved stakeholder satisfaction b greater understanding of candidates’ experience throughout the process b increased global performance b reduction in administrative tasks, with greater resources invested in engagement and support b increased data security b increased quality and reduced duplication of content for candidates.

2 2 J U N E / J U LY 2 0 1 6

Counsellors As part of the online facility there will be a dedicated area for counsellors, with a dashboard offering full tracking and audit of their candidates’ progress. Counsellors receive notifications when a candidate has added experience against their competencies or submitted their case study for sign-off.

Counsellors can also send messages regarding key dates and material, as well as 121 templates for meetings and virtual training for their role.

The assessment environment is designed to cover the enrolment and progress of candidates and combine the various elements of the submission and information that are required for them to apply for final assessment. Only when all the key elements are complete – including mandatory competencies, technical competencies, ethics module, ethics test, case study, relevant education and employment history – and signed off by the counsellor will the option to apply for final assessment become available. The candidate’s work will then be merged into a pdf, pulling together their profile and submission documentation ready for assessment.

Assessors will also have an area where they can provide details of their availability, the pathways in which they can assess, and access to the latest marksheets and guidance notes. They will also be able to download the candidate assessment submissions if they wish.

Global roll-out It is expected that the online assessment process will be available globally in August and become mandatory for all new candidates. Transitional arrangements will be introduced for those candidates already working on their APCs. In the meantime the project will include all new candidates from the RICS School of the Built Environment in India, all current and new candidates from the North America and Caribbean region and between 100 and 200 UK candidates, which will cover students on a mixture of pathways and assessment types and at different stages.

The simple step of moving assessments online increases the security of the candidate’s information and documents, streamlines the process, obviates the need to post hard copies to all assessors and saves on the assessment panel’s paperwork. C

Kirsty Gould is RICS Global Assessment Operations Manager kgould@rics.org

www.rics.org/uk/apc, www.isurv.com/APC

STA NDA R DS

By the book Ellie Scott summarises the Black Book and its relationship with the ICMS

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he Black Book is a suite of guidance notes defining good technical standards for quantity surveying and construction professionals. It is a vital tool for younger professionals doing their APCs, and a useful guide to best practice for more experienced members.

The suite provides certainty and consistency in quantity surveying, with clear guidance so surveyors can perform their duties professionally and eliminate ambiguities. It also helps ensure clients receive objective, consistent advice, allowing for services to be benchmarked.

All guidance notes follow the same structure and are divided into three levels: 1. general principles – level 1: knowing 2. practical application – level 2: doing

3. practical considerations – level 3: doing/advising.

Written by experienced professionals, each guidance note is rigorously reviewed by an expert panel to ensure the advice is balanced, objective and of high quality.

Members and the public can comment on the guidance prior to publication. To register your interest, please visit iConsult (http://bit.ly/1zVm43S). The Black Book is available at http://bit.ly/1S7r0VZ.

How will ICMS fit with the Black Book guidance?

The International Construction Measurement Standards (ICMS) aim to harmonise high-level construction cost definitions across buildings and infrastructure, and at project and national reporting levels. They have been

RI CS CONST RU C TIO N JOUR NAL

prepared by a coalition of non-profit global professional bodies, including RICS. Publication is expected next spring.

When the ICMS take effect, RICS will regulate them on a worldwide basis.

Accordingly, all ICMS coalition bodies will be required to amend and adapt their existing national and international guidance to incorporate these standards.

RICS will need to revise the Black Book and the New Rules of Measurement, both of which are currently UK-only guidance. These will be incorporated into a regulated professional statement, which will support and augment ICMS on a global basis. The precise form and content of this professional statement is still to be developed and will depend on the agreed ICMS framework. b Ellie Scott is Senior Product Manager, RICS Standards Publishing

escott@rics.org

For more information, please contact Alan Muse, RICS Global Director of Built Environment Professional Groups on amuse@rics.org.

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LEG A L

RI CS CONST RU C TIO N JOUR NAL

Getting what you pay for

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Shy Jackson summarises a recent court decision that reminds us of the importance of having and adhering to a schedule of services

lients depend on quantity surveyors for many different services, but surveyors are usually retained to ensure that costs are monitored and controlled. William Clark Partnership Ltd v Dock St PCT Ltd [2015] EWHC 2923 (TCC) concerned the services provided for the construction of a primary healthcare centre for the North Lancashire Teaching Primary Care Trust.

The claimant, William Clarke Partnership (WCP), provided quantity surveying and project management services for the defendant, Dock St PCT Ltd (Dock St). WCP claimed £174,500 for professional fees, but Dock St argued that WCP failed to provide the services specified, leading to an overspend of £733,395. Dock St also claimed £195,000 for sums already paid as abatement and £214,557 for unnecessary variations.

Provision of services and causation In its claim, Dock St listed the appointed services to be provided at each stage and sought to identify those that WCP had failed to perform. In the pre-contract phase, for example, it argued that WCP had failed to advise on the option for a guaranteed maximum price contract and did not provide a cost plan or a full final account analysis, which prejudiced the final account negotiation.

The judge rejected many of the allegations, but found that WCP did not provide monthly reports on either the actual or projected costs and valuations, or cost estimates for proposed changes. He also found that advice on the cost implications of changes resulting from the design process and project management was poor, and that the RICS Black Book guidance note on Cost Reporting had not been followed.

However, he held that Dock St failed to prove the loss caused by such failures, especially as it would have often proceeded even if it had received the full advice from WCP. He observed that: “establishing causation in construction-related professional negligence claims … is notoriously difficult precisely because of the difficulty in showing how things would have turned out differently even if the professional had not acted negligently.”

Dock St was successful in some items. For example, in two variations the judge held that if WCP had provided cost information then Dock St would not have proceeded. WCP was therefore liable for the cost of these variations.

Abatement Dock St argued that it was entitled to make deductions due to the poor service it had received from WCP. The judge noted that abatement is not available as a defence to a claim for payment

regarding professional services. Dock St could, however, defend itself by demonstrating that all, or some specific part, of those services were either not performed or executed so poorly that they were worthless.

Dock St’s claim regarding advice on the final account settlement therefore failed because some advice was provided and it was not entirely worthless. Dock St was, however, successful in its claim for the complete failure to provide cost reports, which the expert witnesses agreed had a value of £25,000.

Global claims The judge observed that Dock St’s argument had the characteristics of a global claim because it identified numerous breaches said to be potential or actual causes of the overrun, but without providing any details of the causal connection between the two. In his view, such a claim failed because Dock St did not prove, on the balance of probabilities, that some overrun would not have been incurred in any event. He also thought there were other plausible explanations for the overrun.

Conclusion This decision highlights the difficulties in pursuing claims against quantity surveyors when there is a cost overrun. The judge did, however, find that there was a failure to provide the contractual services, and some failures did cause a loss. The outcome was that WCP recovered £42,977.

Extensive schedules of services are often included in professional appointments, but can still be ignored, with the quantity surveyor providing what they believe are the required services. It would be good practice to review the schedule of services throughout the works to ensure that they are all performed or, if they no longer apply, that the client is informed and agrees that these are no longer necessary. This will help reduce the risk of claims for failure to provide services. b

Shy Jackson is a Partner at Pinsent Masons shy.jackson@pinsentmasons.com

Related competencies include

Conduct rules, ethics and professional practice, Client care, Contract practice, Project administration, Project processes and procedures

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RICS CON ST RU CT I O N JO U RN A L

A DV E RTI S I N G

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RI CS CONST RU C TIO N JOUR NAL

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Diversity & Inclusion Conference 29 June 2016, Hilton London Bankside One year on from the launch of RICS Inclusive Employer Quality Mark (IEQM), this event signals a crucial shift in conversation from theory to practical application. The conference combines inspirational keynotes and leading case studies, offering attendees critical insights into improving and structuring their business to attract and retain talent.

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