Human Resource Allocation for Remote Construction Projects

Abstract

As the construction industry expands from local markets to global markets, many construction and engineering firms have acquired tenders remotely from their home base. When allocating human resource for the management team of distant project sites, these firms have the strategies between assigning regular staff and hiring local temporary employees. Since management expenses and project risks may vary for these two strategies, it is important to make a favorable decision between the choices to mitigate project risks and achieve maximum benefits during the global expansion of construction companies. This paper first proposes a decision-making model for human resource allocation in remote construction projects by estimating “total project cost,” which is the sum of total project expenses, expected project loss, and direct construction cost. Next, this study provides a case study of three remote construction projects to illustrate the usefulness of the proposed model. The case study results show that regular project administrators, who are able to reduce managerial flaws and cut down project losses, are favored over local ones. Regular site engineers, who hold lower level managerial responsibility, on the other hand, apparently lose their edge to local employees because of their high wages and relatively minor impact on overall project performance.