Optimising social procurement policy outcomes through cross-sector collaboration in the Australian construction industry

Abstract

PurposeSocial procurement policies are an emerging policy instrument being used by governments around the world to leverage infrastructure and construction spending to address intractable social problems in the communities they represent. The relational nature of social procurement policies requires construction firms to develop new collaborative partnerships with organisations from the government, not-for-profit and community sectors. The aim of this paper is to address the paucity of research into the risks and opportunities of entering into these new cross-sector partnerships from the perspectives of the stakeholders involved and how this affects collaborative potential and social value outcomes for intended beneficiaries.Design/methodology/approachThis case study research is based on a unique collaborative intermediary called Connectivity Centre created by an international contractor to coordinate its social procurement strategies. The findings draw on a thematic analysis of qualitative data from focus groups with 35 stakeholders from the construction, government, not-for-profit, social enterprise, education and employment sectors.FindingsFindings indicate that potentially enormous opportunities which social procurement offers are being undermined by stakeholder nervousness about policy design, stability and implementation, poor risk management, information asymmetries, perverse incentives, candidate supply constraints, scepticism, traditional recruitment practices and industry capacity constraints. While these risks can be mitigated through collaborative initiatives like Connectivity Centres, this depends on new “relational” skills, knowledge and competencies which do not currently exist in construction. In conclusion, when social procurement policy requirements are excessive and imposed top-down, with little understanding of the construction industry's compliance capacity, intended social outcomes of these policies are unlikely to be achieved.Originality/valueThis research draws on theories of cross-sector collaboration developed in the realm of public sector management to address the lack of research into how the new cross-sector partnerships encouraged by emerging social procurement policies work in the construction industry. Contributing to the emerging literature on cross-sector collaboration, the findings expose the many challenges of working in cross-sector partnerships in highly transitionary project-based environments like construction.

How Construction Employment Can Create Social Value and Assist Recovery from COVID-19

“…[38][39][40] stated, social value is inherently 'subjective, malleable and variable' in nature and means different things to different people based on their ethics, morals, and priorities. This is especially true in construction, where the potential social value of social procurement is undermined in practice by stakeholder nervousness about policy design, stability and implementation, poor risk management, information asymmetries, and perverse incentives [22]. Social procurement in construction is also inconsistent because practices are not internalised across organisations, and projects and the people targeted by social procurement may only be hired on to comply with contractual social procurement requirements [23].…”

How are social procurement actors shaping a new field of professional practice in the Australian construction industry?

“…While this supports other research which highlights the importance of formal power in championing innovations like social procurement (Jenssen and Jørgensen, 2004), our results also raise new questions which need further investigation, about the role of business size in implementing social procurement. On one hand, this seems to conflict with Loosemore et al. (2020a) who found that smaller construction firms are more sceptical about social procurement than larger firms.…”

“…People that bring leadership qualities such as integrity, and empathy and courage and the like (R2). Finally, adding to the very limited construction social procurement research into the enablers of cross-sector collaboration of social procurement policies (Loosemore et al, 2020a), respondents also highlighted the importance of being able to identify potential partners with the necessary skills, competencies and values to be able to collaborate effectively. This was based on trial and error and experience (good and bad) of working with various partners over multiple projects.…”

“…However, the limited research in this area highlights many barriers to effective implementation at government, industry, company and individual levels (Burke and King, 2015; Murphy and Eadie, 2019; Barraket and Loosemore, 2018; Watts et al. , 2019; Loosemore et al. , 2020).…”

The Emotional Machiavellian: Interactions Between Leaders and Employees

“…Relationships within construction sites have limited time to develop before they accomplish the project and change to another project. The challenges of operating in transitionary project-based environments are distinct from stable environments (Loosemore et al, 2020 ). Construction firms in developing countries are challenged with both organisational and country-level uncertainties.…”