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From a job to a career

AGENDA

Once again Ray O'Rourke is raising eyebrows across the industry.After paying just £1 for Laing then setting £5 billion turnover targets, the man in charge at Laing O'Rourke is now planning a cultural revolution at his business - one that will have far-reaching implications for others. Sophie Kernon reports

DOCUMENTS seen by Construction News show that by the end of 2005, O'Rourke's 6,000 UK-based site operatives will work a maximum 48-hour week, be paid monthly rather than weekly and enjoy a range of standard benefits including accident cover, life cover and better holiday pay.

It shouldn't be, of course, but what is being planned is revolutionary stuff and something the construction unions have been demanding for years.

According to the firm's new pay and conditions blueprint, the idea is to employ happy, talented and hard-working staff in stable careers that 'challenge and change' the very traditions of the industry.

It looks like the men won't be out of pocket working fewer hours, either.

A normal working week of 39 hours will be topped up with nine hours of overtime for those who want it, paid at time and two-thirds.

Research carried out by the company at the £3.7 billion Heathrow T5 site showed that staff were actually more productive working fewer hours.

One source said: 'With a skills shortage in full swing the set-up at Terminal 5 actually is better than any.What they have found is that working fewer hours, the workforce is happier and just as productive, if not more so.'

This national overhaul of the company's systems will take up to 18 months to complete.

The plan makes good commercial sense and aligns it with its new bigleague rivals.One union source said: 'They must be aware of what companies like Amec are up to, which is a very different but a highly organised operation.'

Laing O'Rourke is one of the fastest-growing businesses in the UK with a turnover now close to £1.7 billion - almost 10 times what it was three years ago, when it was just under £180 million.

Writing in the company's 2004 review, Mr O'Rourke said: 'We are determined to grow as a learning organisation, embracing change and creating change, ready to seize opportunities whenever and wherever they arise.'

Mr O'Rourke is heralding the latest plans as a 'spring clean' ahead of the introduction of new rules due to come in as part of the European Working Time Directive.

The UK secured an opt-out of the maximum 48-hour week in 1998, which it now may lose if Eurocrats have their way.The first draft of the amended directive was due to be published yesterday (Wednesday) and may mean that a 48-hour week is calculated as an average over a set period of time.

Laing O'Rourke is getting its house in order, standardising its systems and making the switch once and for all to the premier league of contracting.

One source close to the firm said: 'There has to be a clear commercial advantage in standardisation. Anybody who wants to grow bigger in construction is getting involved in the Private Finance Initiative.You have to be organised, with a directly employed workforce and local labour. And you really need to set yourself apart in the eyes of the client.'

In the payroll document, the company explains that it pays its operatives through 18 different structures with 100 different variations on terms and conditions. In the world of lean construction, this is inefficient.

The company wants a national standard set of terms and conditions with pay rates worked out on a regional basis.All administration will be carried out electronically.

According to one source, the company is planning to phase out the use of subcontractors on CIS 4 entirely, with all its workers directly employed instead.

The source said: 'The company has now grown sufficiently not to be running small contracts between £1 million and £2 million, where a lot of the CIS 4 work is.'

But what sets Laing O'Rourke apart from any other growing operation doing exactly the same thing? The answer is simple: Heathrow T5.

Laing O'Rourke realised how much power it had and what it was capable of changing when it agreed the £55,000-a-year pay deal on Britain's biggest building site. It was also shown how BAA, one of construction's most influential clients, works.When the two got together a spark was ignited in Mr O'Rourke and his team.

Earlier this summer it was clear big changes were under way when former deputy chairman of the Competition Commission Denise Kingsmill was appointed to head an independent advisory forum for the company.

This is charged with driving change through Laing O'Rourke and turning it into a world-class construction leader.

The T5 project has been instrumental in changing the perception with which the public at large regards construction and apparently how we all feel about our children working in it. Stable income, no debts and excellent job prospects. Beats a media studies degree any day.

Now Mr O'Rourke may be ready and willing to throw off the shackles and mindset of a concrete subcontractor paying its men a daily rate and working all the hours God sends - and into the bargain returning the industry back to the good old days of its skilled craftsmen being considered as vital to the society we live in.

But Mr O'Rourke will also have to get over what one union official called the 'pathological fear' among workers of not getting paid every week.

He said: 'At any one time I can have 30 tribunal claims on my desk from members who have not been paid.There is no other industry where staff are scared their boss isn't going to pay them.

'A lot of men have never worked as an employee before and will be petrified.They think: 'I work out in the mud and the heat and the cold and I might get killed and what if my boss doesn't pay me this week?' It's ludicrous.'

The new ideas at Laing O'Rourke are about getting rid of this shocking attitude. One employee said: 'A few years ago if you had told me a major contractor wanted to develop its workforce's skills and make them all staff, I would have told you that you were mad. But it is happening.'

Mr O'Rourke is banking on his regional management teams putting the plan into practice.

The firm's Midlands regional director, Aran Verling, who before had the mammoth task of running T5, has already given presentations to Ucatt regional officials at sites up and down the country. And he is now due to brief contract managers and project leaders.

The reception seems to have been good but nobody knows for sure what the pay rates will be in each of the regions or how men will be transferred from site to site.There is talk of a different contract for each job.As usual the company is making no comment.

One union official admitted the lack of information was worrying but added: 'To give the company the benefit of the doubt, I think that they are tentatively testing the water to see if the workforce will accept it as is.

'Consultation beforehand may have been preferable because the men need continuity.

'But they must be applauded for making a sincere commitment to permanent direct employment and aligning themselves as a market leader.They know what their product is and they want to be the best.'

Mr O'Rourke has become something of a pioneer.