By Ed Monaghan, chair of Construction Scotland and CEO of Mactaggart & Mickel Group

Scotland has a productivity problem – not just in construction, but across our whole economy. We have a lower level of productivity than many smaller EU countries and we sit in the third quartile of OECD countries. Nobody doubts that we’re all working really hard, but it seems that we’re just not working smart.

Why is this so important? Well, in order to compete, not just at an international level, but at home as well, and have sustainable economic growth, we need to improve our productivity. The more productive we are, the more competitive we become and the more profit we make – individually, collectively and as part of the wider economy.

Low productivity is a problem not just for the housebuilding and construction industries, but for us all. In fact, it is such an important issue that some businesses have started to do radical things to tackle it. Productivity is not improved by putting in longer hours – just look at the news recently and you will see a Glasgow company hitting the headlines for introducing a four-day week with no loss of pay. Many companies in Sweden have even introduced a six-hour working day and both of these report boosted productivity as a direct result of these changes. Perhaps it is time for the construction industry to start thinking outside of the box too and making changes that can make a real difference to productivity and, ultimately, profit.

Being an eternal optimist, I believe that lack of productivity in our sector is a challenge that we will successfully address. As a direct response to the issue, at our conference last month Construction Scotland launched a new initiative to help Scottish construction businesses improve their productivity, efficiency, and ultimately their profits. The Profit Through Productivity programme kicked off this month, covering topics from manufacturing and operational efficiency to organisational development and leadership.

So what’s stopping us housebuilders being more productive? Antiquated technology is often blamed for poor productivity, and I agree it plays a major part. The construction industry can be a bit of dinosaur when it comes to technology. We need to embrace digitisation and take advantage of things like BIM to do things differently. A shortage of skilled workers has a negative impact too, as do regulations - I don’t shy away from saying that half of my team is up to its knees in treacle battling the regulatory process – we need to work better at getting projects through planning and consents.

In my opinion, if there is one key to improved productivity in housebuilding, it is offsite manufacturing, where elements of homes are built in a controlled factory environment and transported to site. We have talked about this for a long time but now we need to deliver 50,000 new affordable homes and the estimated 75,000 private homes Scotland needs over the next 5 years and deliver them quickly. Offsite fabrication and modularisation can speed up housebuilding, because while the building components are being manufactured offsite, preparatory works onsite can proceed at the same time. Costs can be lower because using a controlled offsite environment can reduce the impact of adverse site conditions on the project and also enhance safety.

A lot of people, especially architects, worry about modular construction. They think it means that we’ll soon all be living in identikit boxes and that we’ll lose design flair. But once you delve more deeply into the issue, you realise it doesn’t have to be that way. The idea of offsite construction doesn’t appeal to everyone, so it’s important that a company setting off down this road brings any doubters along on the journey. People are the key to innovation and everyone within a company needs to be on board with new ideas in order for them to work. Board members have a clear incentive – improved profits – for a company to become more productive, but what about the apprentice on the ground?

John Forster, Group Chairman at roofing company Forster Group, spoke very eloquently at our recent conference about the importance of learning from the people on the ground and giving them the opportunity to tell management how things can be done better and more efficiently. His company has had great success in improving productivity by analysing their data, learning from the whole team and by introducing a new set of motivations to bring the team on board. The results of this are reflected in their profits.

We also need to think about how the planning system will cope – there’s a review currently under way and I will be interested to see the findings. We need to be bolder in our ambitions, we need to see real movement on Combining Consents. That alone will improve the whole sector’s productivity and eradicate the industry’s frustration with continuous re-work. The new homes Scotland needs also have to be supported by the right infrastructure and currently there is a mismatch between where people aspire to live and the infrastructure to support it – we need to make sure that these two things join up.

Construction Scotland’s Vision for 2030 is for an industry which is recognised internationally as leading the delivery of innovative, quality projects; which year on year delivers increasing client satisfaction and value for money; and which delivers sustained industry growth and company profitability. Through our new Profit through Productivity programme we are taking clear steps to make that a reality.

The Profit through Productivity programme is a collaboration between Construction Scotland Innovation Centre (CSIC), Scottish Enterprise, Scottish Manufacturing Advisory Service, Zero Waste Scotland and Skills Development Scotland.

For more details of the full Activity Programme, visit www.cs-ic.org/productivity.