Flexibility, labour subcontracting and HRM in the construction industry in Singapore: Can the system be refined?

Abstract

Labour subcontracting is an important labour-use strategy in the construction industry. In their search for labour-market flexibility, employers in the construction industry in Singapore rely extensively on the Kepala (labour subcontracting) system. The Kepala system offers a 'convenient' way of managing operative (skilled, semi-skilled and unskilled) construction workers. Essentially, this paper discusses the merits and demerits of the Kepala system. It is argued that, although employers in the construction industry derive some strategic benefits from the use of labour subcontracting, on the whole, the system has some adverse consequences for workers, companies, the industry and HRM functions. But, in the absence of any better system that the employers can turn to, it is necessary for the Kepala system to be refined. Thus, it is suggested that the Japanese model of labour subcontracting offers lessons, but will require modifications and adaptations before being applied in Singapore.