A construction project has a long list of potential stakeholders.

Stakeholder Variation Between Project Types

Not every project will involve every stakeholder type. A large project will require more stakeholder input and engagement than a smaller one. For example, a small renovation may not need input from the city council. Project management may be conducted by the lead builder rather than by a separate project manager.

The stakeholders involved in a small residential project will differ from a large commercial project. The image below shows possible variations between residential and commercial stakeholders.

Both residential and commercial projects	Residential only	Commercial only
Construction staff Architect Administrative staff Contractors The public City council Suppliers Trade unions Regulators	Residential client – likely to be a private citizen Private neighbours	Commercial client – likely to be a corporate organisation Project manager Consultant professionals Investors Mana whenua Neighbouring businesses Competitors End users

In this subtopic we will explore the roles and responsibilities of some of the main stakeholders for construction projects. The expectations of each stakeholder will be investigated along with the impacts that stakeholders can have on the success of the project.

Construction Employees

These are permanent staff members employed by the organisation to perform construction tasks. These stakeholders are the mainstay of the building site. A builder will perform a range of construction tasks. They will oversee work done on the site, coordinate with contractors and provide quality control.

Stakeholder Impacts

Construction employees will have a major impact on the success of a project. A skilled, motivated employee will produce a quality product that meets all requirements and ensure that other contractors do the same. If a construction employee does not have the required skills and training or is not provided with the correct information, this can lead to mistakes and poor workmanship.

Stakeholder Expectations

As mentioned earlier, part of stakeholder engagement is determining what stakeholders expect from the project. Unrealistic expectations must be managed early, to avoid disappointment.

Employees will have the following expectations when working for the construction company:

• They expect to get paid a regular wage. Therefore, they have an interest in the financial wellbeing of the construction company. They have an incentive to work well so they keep their job.
• They may expect to progress in their career. To do this, they may seek opportunities for upskilling.
• Most employees expect to take pride in their work. They need to be kept informed about project requirements and changes. They will want feedback on their performance, both positive and constructive.
• Employees have a legal right to be safe while on the job site. They will expect health and safety legislation to be adhered to.

Contractors and Subcontractors

Contractors are temporary staff members brought into the project to perform a specific task. For example, a glazier, plumber, electrician, roofer, painter and machinery operator may be employed as needed.

Subcontractors are workers hired by the contractor to perform some of the labour.

Stakeholder Impacts

The benefit of a contractor is that they are only employed for the time they are needed. This helps with finances, as they are not permanent employees. Another benefit is that they should have specialised knowledge about their trade. It is vital to hire contractors who have the required skills for the required task. They also need to be provided with specific instructions as to requirements, materials and timeframes. If contractors are employed for tasks that they are not skilled at, project quality can be compromised, or work may need to be redone.

Contractors need to be scheduled very carefully. In many cases a contractor’s task can only be started after another contractor has finished their task. If contractors are scheduled in the wrong order they may not be able to start their task. If a previous task is running late, the subsequent contractor may need to be delayed. If one contractor cannot complete their task on time, all subsequent contractors may be impacted.

Stakeholder Expectations

• Contractors will expect to get paid for the work they complete in a timely manner.
• They will expect the building project to be at the correct stage when they arrive so that they can get on with the work they are contracted to do.
• Any equipment or materials need to be supplied as agreed.
• The work required needs to have been described accurately.
• The time required for the job needs to have been accurately forecasted. The contractor may have another job to go to once this one has been completed.
• As with permanent employees, contractors have a legal right to be safe while on the job site. T

Client

The client (project owner) is the person or organisation commissioning and funding the project. They want a building that meets their expectations.

Stakeholder Impacts

The client is the ultimate arbiter; if they are not satisfied with the final product then the project has failed. A satisfied client may lead to more projects. A dissatisfied client may tell others or leave negative reviews, potentially leading to fewer new projects.

Stakeholder Expectations

• Quotes and information provided to the client need to be accurate.
• All required permits and permissions are applied for and approved.
• All people working on the project have the required skills and knowledge and have been vetted to ensure client safety.
• The building will be constructed as planned and to the required quality.
• The client hopes that the project will be completed on time; if there are delays, new timelines need to be provided.  
• If changes need to be made to the project after kick-off, decisions are made collaboratively.
• Cost overruns must be explained, and budget change decisions must be made collaboratively.
• People living in a building being renovated expect to be kept safe and have disruption kept to a minimum.

Suppliers

Suppliers provide goods (such as building materials) or services (such as electricity) to the construction project.

Stakeholder Impacts

Without raw materials, a project cannot proceed. Good relationships with suppliers are essential to ensure that the correct goods are provided in a timely manner.

Stakeholder Expectations

• Suppliers expect to receive accurate ordering information.
• Orders need to be received early enough to ensure that they can be fulfilled, delivered and on-site when required. It may take some time to source or manufacture your required supplies.
• If there is an error with the order or quality defects, the supplier expects to be informed straight away so the issue can be addressed promptly.

Mana Whenua

Mana whenua are the local Māori who have historically lived on the land where the construction project is taking place. Note that mana whenua are only likely to become involved in large projects, where resource consent is required. If the construction project has the potential for mana whenua to be impacted, consultation is required.

Mana whenua are likely to get involved if the construction will impact ancestral land or sensitive ecological areas or if discharge may impact the environment (Ref: Auckland Council).

 Stakeholder Impacts

Consulting mana whenua can have a positive impact on a project. If issues are identified, If the end users of the building will include Māori, mana whenua will be well placed to provide information on making it welcoming to Māori. If consultation is undertaken poorly, or with the wrong people, it can lead to anger and even protest.

Watch

Video Title: Fletchers faces off with mana whenua in Ihumātao - one of New Zealand's most historic sites
Watch Time: 15:34
Video Summary: This video demonstrates some of the complexity that arises when planning a development that may impact mana whenua. It discusses a housing development that was planned in Ihumātao, in Auckland. Māori were concerned about the loss of an important historic site. They also claimed the land was wrongfully confiscated from mana whenua.
Pre Watch Question: What do you know about Ihumātao and the protests that took place in 2018?
Post Watch Task: 

1. Do some research: what happened to Fletcher Building’s planned Ihumātao development?
2. How might this outcome impact Fletchers?
3. How might this outcome impact the community?

Stakeholder Expectations

• Mana whenua expects engagement to be ‘early, continuous, and constructive (Otter, Roothan & Meares, 2019)’.  
• They expect meetings to be conducted in a culturally appropriate manner, e.g. preferably face-to-face and using Māori tikanga (culturally appropriate practices).
• They expect all engagement to be undertaken in good faith.
• They expect their input to be taken seriously rather than consultation being seen as a box-ticking exercise.

City Council

Any construction activities classified as restricted building work will require building consent. This consent must be applied for and issued by the local territorial authority, usually the local district or city council, before construction commences. During construction and after the project is complete, the council will conduct inspections to ensure that the building meets all requirements.

Stakeholder Impacts

Being granted permission to go ahead with a construction project is not guaranteed. The council can reject the proposal and prevent a project from going ahead. They may request additional information or demand changes be made to the planned project. This may involve getting additional information from the designer or engineer or undertaking an environmental impact study.  These additional requirements can increase the project time and cost.

Stakeholder Expectations

• That documentation will be completed correctly and submitted in a timely manner.
• That the planned project has been described correctly and all potential issues identified and addressed. This will help determine the impact the project will have on others.
• That any significant changes made to the project are communicated to the council in a timely manner.
• That the community, as represented by the council, are inconvenienced as little as possible by the project.
• That only appropriately qualified and licensed people, such as licenced building practitioners and registered electricians, will perform tasks as required.

Watch

Video Title: Stores seek compo for disruption from Auckland's City Rail Link project
Watch Time: 3:38
Video Summary: Auckland’s City Rail Link (CRL) is a large construction project that began in 2016 and is due for completion in 2025. It is adding rail tracks under the Auckland CBD leading to increased train travel efficiency. If you are interested in the project, you can read about the CRL at their website. This video describes disruptions to businesses caused by the CRL.
Pre Watch Question:   
Post Watch Task: Imagine you are a business which is located near one of the trenches that has been dug to facilitate the creation of the CRL.

• How could you be impacted by the CRL?
• As a stakeholder in the CRL development, what would your expectations be?

Source: YT

Contributing Professionals

Most construction projects will employ one or more external professionals who bring their specialised knowledge to the project.

• Architects
• Surveyors
• Structural Engineers
• Civil Engineers
• Geotechnical Engineers
• Health And Safety Advisors
• Urban Planners
• Interior Designers
• Fire Protection Engineers

H5P here

Stakeholder management refers to the process of analysing and documenting stakeholder information. Documentation is essential for large projects to ensure that nothing is missed. Small projects may not need a formal stakeholder management plan, although stakeholders will still need to be communicated with.

Stakeholder Engagement Plan (SEP)

A SEP is used to list your project’s stakeholders and document their involvement. The specific format of the SEP will vary depending on the project, but it may include the following:

• The stakeholder role.
• The level of power the stakeholder has in the project.
• The level of interest the stakeholder has in the project.
• Frequency of stakeholder engagement.
• The method of communication that will be used.
• What information the stakeholder requires.

The SEP must be completed in conjunction with each stakeholder. Liaising with stakeholders will help to determine their interest level in the project, how often they want to be communicated with, and what communication method is most suitable.

The SEP is a ‘live’ document, meaning it should be reviewed at regular intervals and modified as needed throughout the life of the project, adding additional stakeholders, and adjusting communication preferences when and as often as required.  

Power and Interest

The power of a stakeholder is the amount of influence the stakeholder will have on the project. The project decision makers, such as the client, have a large amount of influence on the project.  Suppliers, while important, do not make decisions about the project, so are considered to have low power.

The interest is the degree to which the stakeholder is affected by the project. Clients and end users have a high degree of interest in the project. Members of the public who may be minorly inconvenienced by building work have a low degree of interest.

The engagement with stakeholders will depend on their degree of power and interest. The power-interest grid defines this engagement.

Engagement Details

Consulting the power-interest grid will help to determine how often each stakeholder should be communicated with, the communication method, and what information they are likely to need. You do not want to over-communicate with someone who has a low interest in the project. But you also do not want to under-communicate with high interest stakeholders.

SEP Example

Stakeholder	Power	Interest	Comm Frequency	Comm Method	Information Required
Client	High	High	Weekly	Email/Zoom	Project status updates, costing information
Project Manager	High	High	Daily	Email	Daily and weekly project updates
Contractors	High	High	Daily	Toolbox meetings	Daily and weekly task lists
Subcontractors	Low	High	Daily	Daily standup meetings	Daily and weekly task lists
Architect	High	Low	Weekly	Email Meetings	Design information, revision requests
Key Suppliers	Low	Low	As needed	Email	Supply requests, payment information
Mana whenua	Low	High	Fortnightly	Face-to-face meetings Email	Design plans, environmental impact reports
City Council	High	Low	As needed	Via web portal Meetings	Permits, progress updates, inspection requests
Financial Backers	High	High	Monthly	Meetings	Financial reports, progress updates
Community	Low	High	Monthly	Bulk emails, letterbox drops	Progress updates, details on how concerns are being mitigated

Engagement Logs

Engagement logs are used to record interactions with stakeholders, including meetings, calls, emails, and other forms of communication. It helps in tracking engagement activities and follow-ups.

An example of a stakeholder engagement log is shown below.

Date	Stakeholder	Communication Method Used	Summary of Interaction	Action Items/Follow-ups
01/07/2024	Client	In-person Meeting	Discussed project timeline and milestones. Client requested additional landscaping options.	Provide landscaping options by 07/07/2024.
02/07/2024	Architect	Meeting	Discussed current state of the build and requested confirmation of design compliance.	Report back confirmation of compliance by 05/07/24
03/07/2024	Local Council Inspector	Phone Call	Clarified compliance requirements for building consent.	Submit revised compliance documents by 08/07/2024.
04/07/2024	Contractors	Daily standup meetings	Reviewed current progress and provided instruction on today’s tasks. Addressed delays in plumbing material delivery.	Expedite delivery of plumbing materials.
05/07/2024	Project Manager	Weekly Team Meeting	Discussed current project status, upcoming tasks, and potential risks.	Prepare risk mitigation plan by 10/07/2024.
08/07/2024	Supplier (Aluminium Joinery)	Email	Confirmed order details and delivery schedule for aluminium joinery.	Confirm delivery date by 09/07/2024.
12/07/2024	Interior Designer	In-person Meeting	Finalized interior design selections. Discussed furniture layout options.	Provide final design mock-ups by 14/07/2024.
15/07/2024	Neighbours	Email	Updated on project progress. Neighbours asked to report any noise disruption.	Address any reported noise disruption.

Activity

For this activity you are required to read a scenario and then complete a SEP and engagement log.

Summary

In this topic, you identified potential stakeholders for different types of construction projects. The roles, responsibilities, impacts and expectations of these stakeholders were considered.

You learned about stakeholder management including how to determine power and interest. Stakeholder analysis was documented using stakeholder engagement plans and engagement logs.

If you have any questions about this topic, add them to the Topic questions thread in the forum.

In the next topic, you will be introduced to contracts in the construction industry.