More Than Just a Contract: The Hidden Employee Relations Crisis on Construction Sites
Image 1 — A multicultural construction team on site: managing diverse workforces is one of the most overlooked HR challenges in Sri Lanka's construction industry.
Introduction
On the surface, a construction site might look very simple — workers and machinery operating amidst rising structures. But beneath the obvious activity is a complex web of human relationships, where any breakdown can lead to an overall collapse. Employee relations in the construction industry is largely an ignored aspect of HRM, apparently addressed only when an issue occurs — at which point it is often too late.
What Is Employee Relations?
Armstrong (2020) defines employee relations as the management of the employment relationship — both formally and informally — between employer and employee regarding how work should be performed. It is not just confined to contracts and disciplinary issues. It embraces trust, equity, communication and mutual respect.
Two important frameworks help us understand this. Fox (1966) presented the unitarist perspective — suggesting a shared outlook between employees and management where conflict is seen as exceptional. In contrast, the pluralist perspective argues that divergent interests inevitably lead to conflict, which must be actively managed. In Sri Lanka, most construction contractors appear to hold a unitarist view — workers are expected to follow instructions without question. But the reality on site is far more complex.
Figure 1 — Fox's Frames of Reference (1966): Unitarist vs Pluralist
| Feature | Unitarist | Pluralist |
|---|---|---|
| View of interests | Shared — everyone has the same goal | Divergent — different groups have different interests |
| View of conflict | Abnormal — sign of poor management | Normal — must be managed, not eliminated |
| Role of trade unions | Unnecessary — seen as troublemakers | Legitimate — represent worker interests |
| Management style | Command and control | Negotiation and consultation |
| Construction reality | How most Sri Lankan contractors operate | What the multicultural site reality demands |
Source: Adapted from Fox (1966)
Video 1 — Employee Relations: Unitarist and Pluralist Perspectives Explained
Source: YouTube
The Reality on Construction Sites
Managing employee relations on a construction site is far from easy. The workforce is often large, multilingual and multicultural. Workers come from different nationalities, professional backgrounds and cultural expectations — what is considered normal in one culture can easily be perceived as disrespectful or unfair in another.
Communication gaps may pose the most significant challenge. When supervisors and workers cannot communicate in the same language, directions get misunderstood, grievances go unheard and small problems escalate into serious disputes. CIPD (2022) highlights that effective communication is the foundation of positive employee relations — without it, even well-intentioned management decisions can appear unfair.
Another major issue is equity and fairness. On multinational construction sites, workers sometimes perceive that certain employees receive preferential treatment — better tasks, lighter workloads or faster career progression — based on personal connections or nationality rather than performance. Adams (1965) Equity Theory explains that when workers feel there is an imbalance between their inputs and outcomes compared to others, motivation drops and resentment builds. These workers may not only underperform but also constitute a safety risk on site.
A further issue is skills misrepresentation. Some workers overstate their qualifications during recruitment, only for their inability to perform assigned duties to become clear once on site. This creates additional workload for other team members, increases the risk of incidents and becomes a serious source of workplace conflict.
Image 2 — When workers from different cultural backgrounds share a site, communication and fairness become critical HR responsibilities that cannot be left unmanaged.
The Sri Lanka Context
Migrant and local workers are frequently recruited for construction sites in Sri Lanka, making the management of multicultural workforces one of the most commonly cited HR challenges among construction firms. Hofstede (1980) identified that cultures differ fundamentally in their attitudes toward authority, hierarchy and workplace relations. What works as a management style in one cultural context may create serious conflict in another. On sites where workers from multiple nationalities operate side by side, these cultural differences are felt daily — yet few Sri Lankan contractors have formal HR policies to address them.
A Fair Criticism
It is important to acknowledge the genuine challenges of managing a formal employee relations framework on a construction site — primarily due to the project-based nature of the work, constantly changing staff and the absence of a dedicated HR professional on site. CIPD (2022) recognises that smaller organisations often lack the resources for structured employee relations management.
However, the absence of formal systems does not excuse the absence of basic fairness. Clear communication, consistent and impartial treatment of all workers and transparent grievance channels cost nothing to implement. They simply require leadership commitment.
Conclusion
Employee relations in construction is not a back-office HR function. It is an intrinsic part of everyday site life — experienced directly by every worker in every instruction given, every dispute handled and every grievance heard or ignored.
Sri Lanka's construction sector cannot continue to defer addressing this critical issue. A workforce that feels respected, treated fairly and given clear communication will invariably outperform one that does not. That is not just good HR. That is good business.
References
Adams, J.S. (1965) 'Inequity in social exchange', Advances in Experimental Social Psychology, 2, pp. 267–299.
Armstrong, M. (2020) Armstrong's Handbook of Human Resource Management Practice. 15th edn. London: Kogan Page.
CIPD (2022) Employee Relations: An Introduction. London: Chartered Institute of Personnel and Development.
Fox, A. (1966) Industrial Sociology and Industrial Relations. London: HMSO.
Hofstede, G. (1980) Culture's Consequences: International Differences in Work-Related Values. Beverly Hills: Sage.
Insightful article! It clearly highlights how hidden employee costs go beyond contracts, including productivity loss, inefficiencies, and turnover . Do you think organisations are doing enough to identify and manage these hidden costs effectively?
ReplyDeleteThank you Ashan! That is a very important point. In my experience, most construction organisations in Sri Lanka focus almost entirely on direct costs — wages, materials, equipment — while completely overlooking the hidden costs of poor employee relations. Productivity loss from disengaged workers, absenteeism, rework caused by demotivated teams and the cost of replacing experienced workers who leave — these are rarely measured or even acknowledged. Until organisations start treating employee relations as a financial issue and not just an HR issue, these hidden costs will continue to erode project profitability. The irony is that investing in basic fairness and communication costs very little — but ignoring them costs a great deal.
DeleteExcellent point..!! many construction firms ignore employee relations until conflict damages the workplace. When workers feel unheard or unfairly treated, productivity and safety will suffer. How can companies demand commitment from employees while failing to provide basic fairness and respect?
ReplyDeleteThank you for this. That disconnect between what organisations demand and what they provide is at the heart of most workplace conflict. Fairness and respect are not rewards that workers earn — they are the baseline conditions of any functional employment relationship. When that baseline is missing, the resulting disengagement and resentment are entirely predictable. The surprise is not that workers disengage — it is that management consistently seems surprised when they do.
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