Steady march: The workforce is strong but requires skilled labour

Competition in the construction sector begins long before the final product hits the market. The key lies in skilled labour, which is scarce in Lima and even more so in the rest of Peru. This has not hindered growth, but has compelled developers to either pay higher wages for workers with keenly sought-out trades or invest in specialised training for their employees.

As in most countries around the globe, construction work in Peru is sporadic. Some labourers work for a week while others make a career out of the job. At both ends of the spectrum – casual labourers and full-time employees – attract competitive salaries. At the end of 2010 the average monthly salary for an unskilled labourer on a building site was PEN1426 ($522) as compared to the current minimum wage of PEN675 ($247).

WORKFORCE: According to José Ayllón, director of the Construction and Development Institute at the Peruvian Chamber of Construction (Cámara Peruana de la Construcción, CAPECO), manual labour grew by about 3.5% in 2011, which is not much but reinforces the stability of human resources. The workforce totalled 3.7m in 2010, a steep increase compared to the 2.3m in the sector in 2003. With a population of around 30m the percentage of construction workers is significant.

However, when it comes to specialised projects involving skilled labour there is quite a deficit, which can be explained by the lack of technical institutes. As a result, many companies have trained their own workers. This was the case in the preparatory works for the Camisea gas fields. No steel welders were available in the local area and the consortium in charge of the project spent significant efforts and financing to compensate.

BRIDGING THE GAP: More education is needed to close the gap between skilled and unskilled workers. However, aside from isolated events and company initiatives, little advancement has been made in this area. Marco Paz, secretary-general of CAPECO, told OBG that much skilled labour is imported from neighbouring countries such as Chile or Argentina and even from other industrial sectors not related to construction.

Other industries have made strides to improve technical training. The National Society of Industry has been running an industrial work service programme, SENATI, for the past 50 years, which has helped to add efficiency to production by linking education directly with work experience. Such initiatives could be used in the construction sector to tackle specific demands.

INDUSTRY UNIONS: Construction unions in Peru are strong but do not present problems for the industry. According to figures published by the Ministry of Housing, Construction and Sanitation, only four strikes occurred in 2010, down from 14 the previous year. Paz told OBG that these strikes mostly involved smaller projects and were spurred by specific situations rather than government policies or larger issues.

Positive relations between workers and the private sector have been improving over the years due to more direct contact. Every year since 2004 the Federation of Civil Construction Workers (Federación de Trabajadores en Construcción Civil del Perú, FTCCP) presents a list of complaints to CAPECO, giving the issues a hearing and often having an impact on companies’ policies.

One problem the sector has had to confront in terms of labour involves the persistence of extortionist groups, referred to as pseudo unions. According to CAPECO, these are groups of unemployed people who, using the excuse of labour demands, have occupied construction sites and halted all activity until either given a job or security services are brought in to keep them away. Most of the people involved are not related to the sector or specific projects, according to Paz, who attributes the origins of these groups to factors including continued migration to Lima and the fact that construction has grown so quickly. However, Paz does not believe the pseudo unions have enough influence to jeopardise the sector since the government, along with the private sector, has taken steps to manage the issue. “It is a slow matter and ultimately the roots of these problems lie elsewhere, in social disparities which encompass much larger issues than labour,” he told OBG.