[Public Voices] The Need to Introduce a 'Direct Wage Payment System' for Construction Technicians

Kim Moon-gyeom, Director of the Korea Construction Policy Research Institute

The construction industry, recognized as a representative job sector, is facing a severe shortage of skilled technical personnel. The average age of construction technicians has steadily increased, rising from 37.5 years in 2004 to 50.8 years as of June 2023. The number of mid- to high-level skilled technicians, considered the backbone of the industry, accounts for only about 22% of the total workforce.

This imbalance in the supply and demand of construction technicians not only leads to decreased productivity but can also significantly impact safety and quality assurance. Active measures to attract talent are urgently needed. Until now, issues related to construction manpower have primarily focused on functional workers, resulting in relatively limited awareness and corresponding systems and policies addressing the supply of construction technicians. However, for the sustainability of the construction industry, institutional improvements targeting construction technicians are necessary, which should also involve the establishment of new legislation.

The treatment of construction technicians remains considerably lower compared to other industries. According to the Seoul National University Construction and Environment Research Institute, among 18 domestic industries, construction ranks 12th in income, and among 15 countries, excluding Romania and India, Korean construction technicians have the lowest wage levels. Furthermore, a Statistics Korea survey on the first employment fields of young graduates showed that less than 5% enter the construction industry, second only to agriculture, forestry, and fisheries (less than 1%).

The main reasons young people avoid entering the construction industry (according to an E&E Forum survey) include "low wages relative to workload" and "normalization of compensation standards." Ultimately, this indicates that without improvements in wages and other working conditions, attracting talent to the construction industry is impossible.

It is now time to consider concrete measures to improve the treatment and working environment of construction technicians. From this perspective, SH Corporation’s ‘Proper Wage Payment Confirmation System’ to secure appropriate wages for construction technicians can help improve their treatment and working conditions. This system verifies whether the wages for construction project management technicians are properly paid according to the wage prices announced by the Korea Construction Engineering Association. It ensures transparency in the payment of compensation to construction technicians.

If a more practical environment for improving treatment is possible, the introduction of a ‘Direct Wage Payment System’ by the client agency should be considered. The direct wage payment system is currently implemented for construction site workers in the public sector and is also being expanded by SH Corporation for construction project management technicians. Construction project management requires systematic and professional capabilities such as safety and quality management of construction works and review of design changes, accompanied by corresponding responsibilities. However, without guaranteed appropriate compensation for these responsibilities, it is difficult to expect the influx of talented personnel, and the sustainability of the industry is inevitably threatened.

In this regard, a system for direct wage payment to construction project management technicians, comparable to the direct wage payment for construction laborers, can play a significant role not only in ensuring transparency in the construction industry but also in establishing a foundation for attracting excellent talent. This system is expected to first improve the treatment and working environment of construction project management technicians and, in the mid to long term, contribute to creating sustainable construction by enhancing the safety and quality levels of projects.

Kim Moon-gyeom, Director of the Korea Construction Policy Research Institute