During 2014, based on the Philippine Constructors Association research, the Philippine construction industry contributed 5.8% (at constant prices) to the total GDP of the country. At constant prices, the gross value in construction for both the public and private sectors grew to $14.455 billion, which was equivalent to P641.8 billion. It also accounted for 6.6% of total employment as of end of October 2014. Furthermore, growth is expected to increase in succeeding years due to the Housing and Land Use Regulatory Board (HLURB) setting a target to construct 1 million housing units by 2016, and also announced the construction of over 300 condominium projects in Metro Manila, most of which will be allocated to the mid-market segment. Despite the large contributions to the country’s GDP and the forecasted construction boom to come, the Philippine construction industries quality standard remain subpar.
“The most dangerous phrase in business – ‘We’ve always done it this way’”
Reconstruction efforts have been driving the surge after the tropical cyclone “Yolanda”, hit the Visayas islands in November 2013. One of the strongest typhoons ever recorded in terms of wind speed, it caused total losses estimated at $12bn-$15bn. Thus it has become no surprise that Construction is the 3rd largest economic growth sector in the country and will continue be as government and consumer spending make it a key in developing economic strength. But despite the increased demand for construction projects, contractors, still lack quality management and still continue to operate on outdated quality procedures.
Thankfully, during a recent (January 2015) Senate legislative hearing, the Department of Public Works and Highways Secretary Rogelio L. Singson announced that the agency is going into a scenario where “only ISO-certified contractors or companies will be allowed to participate to bid and work on government-funded projects.” Secretary Singson revealed that based on their agency’s project review and analysis, projects completed by non ISO-certified contractors pale in comparison to projects completed by companies with ISO certifications.
ISO-certified companies are not just certified for show. They are certified because they exercise international standards for health and safety, management, security, environment friendly manufacturing, productions and a lot more. Not only does it improve and promote quality practices, but it also eliminates wasteful processes, which in turn, results in savings. Attaining ISO Certification, particularly in construction companies, helps improve different sectors of the company such as, Construction Operations, Human Resources, Administration and Safety.
In commitment to ISO Standards, documentation is a must. ISO’s rigorous documentation process often exposes significant shortcomings in various operational areas. When these problems are brought to light, the company can take the appropriate steps to improve its processes. These improved efficiencies can help companies garner savings in both time and money. Badoc Builders and Supply, an ISO Certified Ilocos based contractor and one of AGF Consulting Group’s clients, reported to have savings of a monthly average of up to PhP100,000 monthly average while improving construction operations through efficient manpower and machine utilization and on-time delivery of projects. Another contractor and also one of AGF Consulting Group’s clients, RRC Construction, based in Isabela, also reported to have a monthly average savings of up to PhP100,000 due to an improvement in their construction operations, specifically due to minimal incidents.
Based on the Labor Statistics Survey of 2007, a period in which ISO accreditation was not a compulsory choice, there were over 838 cases of injuries in the workplace, and 370 cases of diseases such as bronchial asthma, infections, and work-related musculoskeletal sicknesses such as arthritis and bone and joint pains. These cases contribute to workdays lost resulting in project delays and overruns.
Creating a safe work environment is critical to the success of any business, and is one of the best ways to attract/retain staff and maximize productivity. The ISO QMS and Procedures ensures that procedures are strictly followed within safety regulations, and also requires construction employees lacking in safety training (to be determined by the Human Resources) to attend basic, company sponsored or third party trainings to address needs such as, BOSH (Basic Occupational Safety and Health Training) or COSH Training (Construction Occupational Safety and Health Training). By educating and adhering to strict safety rules, ISO aims minimize incidents and reduce accidents to zero.
ISO has an emphasis on quality, and quality never ends. Through ISO’s requirement of constant dedication to continuous improvement, it is the task of the Human Resources to analyze the skills needed for each employee in order to meet their potential and be fully utilized. Below are a few listed potential benefits when ISO Standards are applied to the Human Resources department –
- Better internal talent mobility
- Decreased employee turnover
- Better workforce alignment to overall business strategy
- Improved workforce productivity
- Faster on-boarding (time-to-productivity)
By process of ISO’s continuous improvement policy, Human Resources are tasked in fostering a mentality of “always-learning” towards the employees in order to improve employee personal development on a rapid scale.
ISO focuses on improving administration through a revision of its procedures such as, billing and collection, purchasing and bidding in projects. BMJ Construction, reported to have a monthly savings average of Php20,000 due to an improvement in their purchasing procedures due to an improved and efficient document filing system. ISO also serves to refocus company priorities on pleasing their customers in all respects, including customer service areas which also helps heighten awareness of quality issues among employees.
By being ISO accredited, not only are you helping your organization achieve high quality standards while increasing profits, but you are also increasing your company’s marketability and ability to attract investors. Make your organization a forefront in the construction industry by being ISO Certified.
Philippines Construction Articles & Analysis. 2015. Oxford Business Group
Competitiveness: Catching the Next Wave – The Philippines. 2014. Deloitte
Asia Construction Outlook. 2014. Aecom
Construction Statistics from Approved Building Permits. 2014. Philippine Statistics Authority
The Philippine Construction Industry. 2012. Philippine Constructor’s Association