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International Journal of Project Management 33 (2015) 889 – 900
www.elsevier.com/locate/ijproman

Workforce-related risks in projects with a contingent workforce

Karen Becker ⁎, Michelle Smidt
Queensland University of Technology, 2 George St, Z Block, Level 9, Brisbane 4000, QLD, Australia

Received 20 June 2014; received in revised form 24 October 2014; accepted 29 October 2014
Available online 14 November 2014

Abstract

Our research examined how projects can draw together the fields of human resource management (HRM) and risk management (RM) to consider
workforce-related risks on projects; particularly those with a large contingent workforce. It is argued that RM frameworks could be enhanced by a more
comprehensive understanding of the specific potential non-technical “people risks” in projects. The study focussed on the Oil and Gas industry and
undertook interviews with experts in the field. The findings are considered within the framework of key HRM areas; Management Practices, General
Employment Practices, Staffing, HR Development, and Compensation and Benefits, along with Project Completion. Drawing together RM and HRM
in a project environment, our research provides a unique opportunity to identify critical workforce-related risks. Such identification is the first step
towards a more comprehensive approach to risk assessment and planning for mitigation of such risks in projects.
© 2014 Elsevier Ltd. APM and IPMA. All rights reserved.

Keywords: Risk management; HRM; Workforce-related risk; Contract workers; Project risk; Non-technical risk; Risk identification

1. Introduction organisations often occur without a formal HRM function (Bredin

Risk management (RM) is increasingly recognised as a critical
activity for all organisations, and in the project management (PM)
arena it has certainly been a focus of research (Bowers, 1994; Carr
and Tah, 2001; Chapman, 1997; Chapman and Ward, 2003; Dey,
2002; Floricel and Miller, 2001). Potential risks cover a wide range
of areas, from operational and financial risks, to less tangible risks
referred to as internal non-technical risks, organisational risks or
personnel risks (Belout, 1998; Dey, 2002; Jaafari, 2001; Pinto and
Prescott, 1988). Likewise, the important role that human resource
management (HRM) can play in projects has also been a subject of
interest to those in the PM sphere (Bredin, 2008; Huemann et al.,
2007; Keegan et al., 2012; Popaitoon and Siengthai, 2014). Whilst
effective HRM is critical for all organisations, it has been argued
that a project-oriented organisation may face additional and unique
challenges in relation to its workforce (Huemann et al., 2007),
particularly because operational HRM activities in project-based
⁎ Corresponding author. Tel.: + 61 7 3138 2743.
E-mail addresses: Karen.Becker@qut.edu.au (K. Becker),
M.Smidt@qut.edu.au (M. Smidt).
and Soderlund, 2011).
Typically these two fields, RM and HRM, have co-existed
without necessarily recognising the potential intersection and
unique perspectives that could result from drawing them together.
In fact, there have been calls for the “forging” of these two fields
with one author arguing, “Risk management is about mitigating
risk and protecting resources. What is the most valuable resource of
any company? Its people.” (Nickson, 2001, p.25). Therefore our
research aimed to study how HRM could be considered through a
RM lens, and how RM frameworks could be enhanced by a more
comprehensive understanding of the potential “people risks” in
projects.
The mainstream HRM discourse, and even the literature
focussing specifically on HRM in PM, typically focusses on the
added value HRM practices can bring, emphasising their critical
importance to organisational success (Belout and Gauvreau, 2004).
We argue however that a deeper understanding of the risks inherent
in ineffective or inappropriate management of human resources
will provide further imperative for managers to consider the critical
nature of human factors within their projects. Our intent is to use

http://dx.doi.org/10.1016/j.ijproman.2014.10.014
0263-7863/00/© 2014 Elsevier Ltd. APM and IPMA. All rights reserved.
890 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
the lens of RM to address this gap and to analyse the critical
workforce-related risks in a project environment. To allow for an
in-depth analysis of risks within projects, the Oil and Gas industry
was chosen as a focus for the research. This industry represents a
large and growing international industry (International Energy
Agency (IEA), 2013a) built largely on projects, comprised of a
tiered system of international oil companies, national oil companies
and a range of contracting organisations and individual contract
workers. This heavy reliance on a contingent workforce raises the
potential for workforce-related risks beyond those in projects with
a predominance of full-time employees. Therefore, the research
question that guided our research was, “What are the potential
workforce-related risks in Oil and Gas projects that rely on a
contingent workforce?”
2. Literature review
The literature critical to this research relates to two key
areas: risk management in projects and HRM in projects. Each
research area in its own right offers insights into the issue of
workforce-related risks in projects however very few authors
have drawn together these two areas in a comprehensive way.
Prior to an in-depth exploration of the literature in these two
fields it is necessary to articulate the focus of our research and
the definitions applied; particularly in relation to projects and
project-based organisations.
Many contemporary organisations make use of projects
however the extent to which an organisation's work is based on
projects versus more permanent structures is of key concern.
For the purpose of this paper, we adopt the term project-based
organisation (Hobday, 2000; Project Management Institute,
2013; Sydow et al., 2004), to denote organisations that carry
out the majority of their work through projects in order to meet
client demands.
It is suggested that in project-based organisations “knowl-
edge, capabilities and resources are built up through the
execution of major projects” (Hobday, 2000, p.875) and that
such organisations are most typically found where “complex,
non-routine tasks require the temporary employment and
collaboration of diversely skilled specialists” (DeFillippi and
Arthur, 1998, p.125) and therefore many of those individuals
working on the projects are contract workers who move
amongst different employing firms (DeFillippi and Arthur,
1998, p.125). Oil and Gas is one industry that relies heavily on
projects and often employs a large number of highly skilled
contract workers who move between projects and employers;
referred to by Redpath et al. (2009) as contingent knowledge
workers. In particular, our research focusses on projects as the
unit of analysis rather than on the organisation that may be
managing a range of major projects, recognising that there may
be variation in workforce-related risks even between projects
managed by the same organisation.
2.1. Project risk management
RM has predominantly focussed on managing potential
threats to organisations' operations and costs by taking a very
technical approach to strategy, tactics, operations and compli-
ance requirements (Culp, 2001; Elahi, 2013; Hopkin, 2013).
This is not surprising, as technical risks have typically been
viewed as having the biggest influence on profitability and
ultimate success. The importance of RM in the overall
management of projects is increasingly being recognised (del
Caño and de la Cruz, 2002; Zhang and Fan, 2014), most likely
due to the increase in project-based work (DeFillippi and
Arthur, 1994). In the field of PM, one important source of
information is the 2013 Project Management Body of
Knowledge (PMBOK) guide 5th edition (Project Management
Institute, 2013). This guide outlines ten knowledge areas for
PM, one of which is PRM (Project Management Institute,
2013). Because projects operate in an ever-changing and
complex environment, the need to systematically and formally
identify risks and uncertainties is critical to ensure cost,
schedule, and quality targets are met (Zhang and Fan, 2014).
Although not always explicit, the primary reason for the
adoption of PRM appears to be first and foremost to prevent
budget overruns (Williams, 1995). Whilst managing financial
risks is fundamental to ensuring project continuity, there is
growing recognition that other risks may also present
significant challenges to the ongoing viability of projects.
Even with the growing recognition of the significance of
RM, there is some disagreement between practitioners and
academics concerning the definition of risk. In reviewing the
many perspectives on RM, there appear to be two predominant
approaches to defining risk (Lehtiranta, 2014). The first (and
most traditional) definition describes risk in terms of the
possibility of negative impact and outcomes (Barber, 2005;
Chapman and Cooper, 1983; Dey, 2002; Lehtiranta, 2014) and
aligns with the dictionary definition of risk (Ward and
Chapman, 2003). The second, and more recently advocated
definition takes a broader perspective and includes both
negative and positive sources of impact also referred to as
opportunities and threats (Lehtiranta, 2014; Ward and
Chapman, 2003). For this research we have defined risk, in
line with the traditional approach, as any threat to the planned
project outcomes whilst recognising that risk often co-exists
with a level of uncertainty that may lead to either positive or
negative consequences.
The majority of publications relating to PRM focus on
methodologies and processes available, the calculations, scales
and theories behind these, and how these should be used or
adapted by organisations (Raz and Michael, 2001; Ward and
Chapman, 2003; Williams, 1995). Most of these PRM methods
consider a range of risk types including: external (market,
environmental, political), technical (operating), legal (integration,
force majeure) and internal non-technical (organisational, sched-
ule, cost estimate, financing) (Jaafari, 2001; Wideman, 1992).
Although the last variable (internal non-technical risks) often
includes management issues, when specified this often encom-
passes a broad range of challenges and inadequacies including
inadequate coordination or PM, or changes to senior staff
(Wideman, 1992). Whilst this variable could be assumed to also
include risks relating specifically to the workforce, these have not
been detailed sufficiently to provide a clear understanding of the
 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
range of potential risks inherent in the workforce and its
management.
A variety of PRM processes and frameworks have been
developed by practitioners and researchers in the field. Some of
the more widely recognised frameworks are outlined in Table 1.
The range of frameworks demonstrates at least a level of
agreement on a number of critical steps in PRM, although the
number of steps or details of activities differ (Raz and Michael,
2001). In all of the frameworks one of the first steps is
identification of risks and it is here that workforce-related risks
should be identified along with other types of risks. In most
cases, however, it has been argued that the identification phase
may lack rigour and detail in classifying and examining the less
tangible non-technical risks (Lopes and Flavell, 1998). Until
such time as potential workforce-related risks are more
systematically identified, the first step of RM in relation to
the HRM aspects will be compromised. Therefore, it is
pertinent to consider whether the literature relating to HRM in
projects offers some more definitive workforce-related risks
that might be considered within the identification phase of
PRM.
2.2. Human resource management in projects
Similar to RM, the PMBOK (Project Management Institute,
2013) also acknowledges HRM as a key capability for effective
PM. However, unlike PRM which comprises six elements in
the PMBOK, the HRM element remains as a single item; ‘Plan
Human Resource Management’ (Project Management Institute,
Table 1
Project risk management frameworks.
PRM frameworks
Project Risk Analysis and Management (PRAM)
(Chapman, 1997),
Risk Analysis and Management for Projects (RAMP)
(Institution of Civil Engineers (ICE), 1998)
Shape, Harness, and Manage Project Uncertainty (SHAMPU)
(Chapman and Ward, 2003)
Project Management Body of Knowledge (PMBOK)
(Project Management Institute, 2013)
891
2013). This would indicate a need to further refine and
delineate the key elements required for effective HRM in
projects and project-based organisations.
It has been argued for some time that project-based
organisations face unique challenges due to the unstable and
temporary nature of the work processes and environment and
that they require specialised HRM practices and processes,
however this area has yet to be fully explored (Bredin and
Soderlund, 2011; Huemann et al., 2007). Based on their review
of research into HRM in projects, Huemann et al. (2007)
propose a model of HRM in projects which includes two
separate HRM processes; one occurring at organisational level
and one at project level. However, even this model assumes that
the workforce is largely permanent and simply moved between
projects until such time as they leave the organisation.
In many organisations like the Oil and Gas industry where
large-scale projects are the mode of operation, this may not be
the case. In these projects, a small number of key personnel
may be employed by an operating organisation and therefore be
full-time permanent employees rotated amongst projects.
However, a large part of the workforce on individual projects
may be contract workers employed specifically for a single
project or as temporary specialists. Storey et al. (2002) identify
that contingent workers are often used as technical experts and
managers on projects and can be employed on either fixed-term
or temporary contracts, moving beyond a contract workforce
for lower skilled positions towards the use of contingent
knowledge workers (Redpath et al., 2009). These temporary
employees may be working side by side with core, ongoing,
Steps/phases
Define,
Focus,
Identify,
Structure,
Ownership,
Estimate,
Evaluate,
Plan,
Manage.
Multi-level break down structure. Top level processes: process launch, risk review, risk
management, and process closedown. These are broken down further in the lower level
processes according to (Carr and Tah, 2001)
Project definition,
Focussing the uncertainty management process,
Identifying sources of uncertainty,
Structuring issues,
Clarifying ownership,
Estimating variability,
Evaluating implications of uncertainty,
Harnessing plans,
Managing implementation
6 elements within the risk management component:
Plan risk management,
Identification,
Qualitative analysis
Quantitative analysis,
Plan risk response,
Control.
892 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
full-time, permanent employees (Storey et al., 2002). Whilst
Burgess and Connell (2006) argue that the growing use of a
temporary workforce introduces the potential for unique HRM
challenges, these have not as yet been the subject of extensive
research and analysis. This research aimed to analyse in more
depth the risks associated with a contingent workforce particularly
focussing on what Redpath et al. (2009) call contingent
knowledge workers. For the purpose of this paper ‘contingent
workers’ covers temporary workers employed on a contract,
through an employment agency or who are self-employed but
contracting to the project.
Regardless of the nature of employment in a project, it is
argued that many of the mainstream HRM practices such as
career development, performance evaluation, and appraisal are
applicable to projects (Huemann et al., 2007), even if there is no
dedicated HRM function within the project. Furthermore, it is
recognised that other traditional HRM practices such as
recruitment and selection, performance standards/management,
training and development and workforce planning are crucial to
project success (Belout and Gauvreau, 2004). A wide range of
activities can be considered within the realm of HRM, however
Rynes et al. (2002), identified the core areas of HRM as
Management Practices (motivation, leadership, performance
management, employee involvement, and HRM roles); General
Employment Practices (legal issues, performance appraisal and
employee attitudes); Staffing (recruitment, selection, and career
planning); HR Development (training and development, evalu-
ation of training effectiveness), and Compensation and Benefits
(job pricing, pay structures, compensation strategies and
effectiveness), and we have chosen to adopt these dimensions
in this research. In addition to these areas, we have also added
Project Completion. Most of the traditional HRM literature
assumes an ongoing working relationship however in
project-based organisations the end of a project often means the
completion of employment contracts and may therefore present
unique workforce-related risks.
Whilst consideration of HRM and PM is widespread (Fabi
and Pettersen, 1992; Huemann et al., 2007; Nickson, 2001), the
links between HRM in projects and PRM have not been
extensively researched. When examining the overlap of HRM
and RM the main focus has been occupational health and safety
including discrimination and harassment (Nickson, 2001).
However, other areas of HRM also involve risk; if not to the
health or physical safety of employees, at least to the effective
operations of the business particularly when a large section of
the workforce is contract workers. Therefore, using the HRM
framework provided by Rynes et al. (2002), the research
question guiding this research was:
“What are the potential workforce-related risks in Oil and
Gas projects that rely on a contingent workforce?”
3. Research method
Given the exploratory nature of the research question, and
the limited number of studies considering HRM in projects
from a risk perspective, a qualitative methodology was
considered to be most appropriate.
3.1. Research context
In order to examine the workforce-related risks likely to be
encountered on projects our research focussed on the Oil and
Gas industry for a number of reasons. First, the Oil and Gas
industry relies heavily on major projects in order to carry out
their work and in particular they rely heavily on a contingent
workforce. Second, according to the International Energy
Agency (IEA) the demand for Oil and Gas is predicted to
increase steadily through to 2035 (International Energy Agency
(IEA), 2013b). Such growth is certain to put a strain on project
and HR managers to manage the risks this ever-increasing
workforce brings. For these reasons Oil and Gas projects
provided an ideal setting to investigate workforce-related risks
in projects with a contingent workforce.
3.2. Data collection
An interview study was determined to be an appropriate way
to gather data about potential workforce-related risks from a
wide variety of perspectives. Interview studies allow for the
collection of a range of experiences (DiCicco-Bloom and
Crabtree, 2006), and in the case of the Oil and Gas industry it
was determined that those who have been exposed to a range of
projects will be able to offer unique insight into the potential
workforce-related risks. In particular, convergent interviewing
was chosen as it can be utilised as a form of both data collection
and data analysis (Dick, 1990). Convergent interviewing is an
iterative process where the content of the interview is limited in
structure, but across multiple interviews, the process used is
relatively structured and involves an iterative review of
outcomes from each successive interview in order to continue
to refine questions as data collection progresses. As interviews
progress, the interviewer is seeking convergence both within
the interview and across interviews. Interviewing should
continue until subsequent interviewing is not likely to raise
significant new data (convergence) and any divergence
amongst interviews can be anticipated and explained.
The interviews were undertaken by a single researcher
however checking occurred during the process to provide rigour
to the process (Baxter and Eyles, 1997). A second researcher was
involved in a pilot of the questions and two subsequent interviews
to ensure consistency of application of questions and probing. The
questions were structured around the HRM areas identified in the
literature review to guide the interview but were sufficiently broad
to allow new themes to emerge e.g. “What do you consider to be
the risks associated with staffing a project?”, “What do you
consider the workforce-related risks when reaching the comple-
tion of a project?”. In line with a convergent interviewing
approach, these stem questions remained stable across interviews
but with each successive interview, prompts were added to be
used when necessary, whilst being cognisant not to lead the
participant.
 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900 893

3.3. Participants data rather than being predetermined. Analysis was undertaken
by one researcher and checked by the second researcher to
In order to access a wide range of perspectives purposeful enhance the trustworthiness of the findings.
sampling was used. Palinkas et al. (2013, p.3) advises that
when variation is preferred, a strategy that focusses on “intense
4. Empirical findings
examples of the phenomenon of interest” can be appropriate to
give a deep understanding. In this research, this variation was
This section presents the findings from the interview study and
achieved by identifying, through industry networks, a range of
outlines the key people-related risks when managing projects with
interviewees who had worked internationally across multiple
a contingent workforce, particularly in the Oil and Gas industry. It
types of projects in the Oil and Gas industry. After interviews
should be noted that when referring to this contingent workforce,
with 13 participants it was determined that no significantly new
the most common term used in the industry is “contractors”
data was emerging and a number of key themes were evident
although this term can also be used to describe large contracting
(convergence was occurring). An overview of the roles and
firms that operate within the industry or individual contract
experience of interviewees, along with the locations in which
workers. For the purposes of the research, we referred to the use of
they have worked, are shown in Table 2. To comply with
contract workers however some of the interview excerpts may
ethical clearance requirements, no participant can be identified
refer to “contractors”. In all cases, references are intended to refer
and therefore quotes from interviewees use the interviewee
to individual contract workers and not the contract organisation.
number as a unique identifier.
In our analysis, people-related risks were grouped into the
five dimensions proposed by Rynes et al. (2002): Management
3.4. Data analysis
Practices, General Employment Practices, Staffing, HR Devel-
opment, and Compensation and Benefits, with Project Com-
Data analysis was undertaken in two stages or “rounds”
pletion/Demobilisation added as a sixth dimension to recognise
(Saldaña, 2013). In the first round of coding, referred to as
the unique nature of projects. Table 3 provides an overview of
descriptive coding (Wolcott, 1994), broad topics of interest
the key themes emerging in each of these dimensions and the
were identified, particularly in relation to the HRM function of
following sections provide further detail and discussion.
reference, for example, recruitment and selection. Importantly,
this stage did not analyse actual content but allocated responses
according to the function or topic to which they were referring. 4.1. Management practices
The second round of coding (focussed coding) reviewed the
content within each of the codes from the first round coding There were three key risks identified within this dimension:
(Saldana, 2009), and identified themes relating to risks within loyalty and engagement, management support and attitude, and
those initial codes. This allowed for risks to emerge from the managing performance and behaviour of contract workers.

Table 2
Details of interview participants.
Interviewee No. Current role Experience Locations
001 Project risk and loss prevention 20 years' oil and gas exposure in varying roles: Norway, Kazakhstan, Australia,
coordinator Project risk & loss coordinator, technical director,
safety and environment consultant
002 General manager 20 years' experience, geologist, technical/operational UK, PNG, Australia, Yemen, Kazakhstan
roles,
003 Human resource manager 25 years' experience, resources sector, workforce Australia, USA
management
004 Contract advisor 5 years' experience, contract administration, Australia, Scotland
portfolio management,
005 Drilling manager 5 years' experience in oil and gas drilling Australia
006 HSSE manager 18 years' experience, Engineer, Manager, Safety Arab Emirates, Middle East, Libya, Egypt, PNG
007 Associate director and Global 25 years contract recruitment in power and oil and gas UK, Middle East, Africa
account manager industry,
008 Human resource manager 9 years' resourcing and recruitment for large LNG Asia Pacific
projects,
009 Project manager 3 years' oil and gas contracting, Shipping industry, Australia, Singapore, Vietnam, Philippines, the Asia
managing director 15 years, Pacific region, Nigeria, the United Kingdom and Europe,
and the Americas
010 Strategic advisor 5 years' operational informer LNG and commercial PNG, Australia
operations, consulting,
011 Project manager 14 years' oil and gas experience, Middle East, Australia,
012 HSSE manager 20 years' safety experience on mega projects, Middle East, Asia, Australia, North America, Canada,
013 Engineering manager 25 years' oil and gas experience in variety of Australia, USA, Canada
engineering, ops and commercial leadership positions
894 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
Table 3
Summary of key findings according to HRM dimensions.
Dimensions Key risks
Management Loyalty and engagement
practices Management support and attitude
Managing performance and behaviour of contract workers
General employment Cultural alignment
practices Country compliance
Clarity of responsibilities between operating company and
intermediaries
Compliance with company employment policies
Staffing Project appeal
Skills shortage
Poaching
Clarity of skill requirements
Filling critical roles
HR policies and processes
Mobilisation time
Setting expectations
HR development Induction
Approach to upskilling
Career development opportunities for contract workers
Compensation and Remuneration and benefits
benefits Equity in contract worker vs staff pay and benefits
Project completion/ Retaining skills for project completion and future projects
demobilisation Capturing, retaining and securing knowledge
The first finding relates to both creating and retaining loyalty
and engagement from the workforce, particularly with a large
number of contract workers working on a project: ‘There's a small
degree of loyalty’ (007). The explanations given for this risk were
twofold. First, it was claimed that contract workers are
predominantly motivated by extrinsic rewards, for example higher
rates or longer contracts, which can easily be duplicated by
competitors: ‘Just pay them [the contract workers] more and they
stay. They will go down the road for 50 cents more …’ (003),
‘Typically, we see individuals moving because they [competitors]
[offer] longer durations’ (008). A second explanation provided by
interviewees was that temporary work often attracts individuals
who enjoy being independent and having the freedom and
flexibility to move according to their interests and circumstances
at any given time. As interviewees explained: ‘…that is the nature
of those types [contract workers]; they like to move around.’
(006), ‘Because contractors, particularly, tend to be always
looking for the next big, exciting thing’ (010).
In addition to loyalty within this dimension, the risks inherent
with a lack of engagement were also highlighted during the
interviews. Although not entirely separate from loyalty, engage-
ment related more to reducing the risk of turnover by ensuring that
those working on the project were fully engaged. Often this might
be achieved by providing stimulating tasks that engender
commitment to the goals of the project in a way that motivates
and encourages the workforce to see these goals achieved: ‘… you
have to make sure that they [the contract workers] identify with the
goals of the company and the project; and that they are motivated
well to see the project succeed; they are not just time servers’
(009). From a management point of view this involves alignment
between the individual, the goals of the operating company and
the project: ‘…certainly with contract workers, there's a lot about
motivation; having to understand what the project is about, what
the company is about, and making them support that and become
aligned with that. That's important…” (009).
In combination with alignment was fostering a willingness to
look beyond immediate tasks and role requirements and instead
consider the wider issues of the project. One interviewee
explained: ‘they [the contract workers] don't have the same
ownership as the company people. So if you give them typically a
specific task, they will take care of it, but not as proactive about
going outside the additional scope that might be required for the
job…’ (013).
The second risk within the management practices dimension
was that of management support and attitude. One aspect of this
risk was the extent to which support is offered by managers
through sharing information, giving advice, providing interesting
tasks as well as autonomy (intangible benefits), empowering and
creating trust: ‘[some organisations] have more of a nurturing,
support to help the team, help the contractor to deliver what you
want them to deliver and that culture is different, depending on the
project manager that is driving it.’ (007), ‘That is one of the other
general challenges of these sorts of projects is maintaining
management support over the longer term’ (009).
Another aspect was the attitude of management on the project,
which was seen as a more collective concern than support by
individual managers. Generally, management could either view
contract workers as integral to the operating company or as
separate from the company and therefore engaged in a
transactional relationship for the purpose of completing the
project, as illustrated by the following interviewees: ‘…for them
[the contract workers] is how you treat them and how you want to
include them in your business, how that fits in your model.’ (003),
‘…they [the contract workers] feel like they are not treated equally
… as staff employees’ (011). As such, the view which prevails in
the company will greatly influence the extent to which the project
workforce is seen as a “whole” or comprised of staff and contract
workers as separate groups. Interviewees explained that this
manifests in several ways such as whether contract workers are
invited to company functions such as Christmas parties, whether
the HRM function or the procurement function manages contract
workers, and generally whether they are treated equally to
permanent staff of the organisation.
The final element of this dimension relates to the risk
associated with managing the performance and behaviour of
contractors to ensure the workforce is meeting expectations,
especially if there is no standard procedure for doing so,
particularly in the case of contract workers. The interviewees
reported; ‘I think it's performance managing, really, is the key
one [risk]’ (006), ‘[a risk is] performance management. It's a
different world where you have got all of these people who are
day raters.’ (010). If the company views the contract workers as
‘separate’, this in turn means that he or she is not included in usual
performance management processes. As a result, if performance
and/or behaviour is not being consistently monitored, this could
lead to a higher likelihood of unwanted behaviours and less than
optimum performance.
In summary, the workforce-related risks found within the
dimension of management practices related to three elements
that are highly interconnected. First is building loyalty and
 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
fostering a sense of engagement on the project. This may be
more or less of a risk depending on the level of management
support offered to contract workers by the individual manager
and whether contract workers are viewed as part of the greater
workforce and treated as such (the second element of this
dimension). The treatment of contract workers will also more
specifically influence the extent to which the performance and
behaviour of contract workers is managed. Lack of appropriate
approaches to any of these three elements were considered to
present risks to effective PM.
4.2. General employment practices
Under the general employment practices dimension, the
potential risks identified include: cultural alignment, compliance
with country legislation, establishing clarity of responsibilities
with intermediaries, and compliance with company employment
policies.
A critical risk reported in this dimension was that of not
creating effective cultural alignment particularly when consid-
ering a workforce comprised of both permanent and contract
workers. This involved ensuring that contract workers demon-
strate the values of the company through their behaviours
which is reportedly very difficult to achieve. In addition to
cultural alignment, contract workers also had to fit within the
project team. Creating such alignment on multiple levels was
reported as challenging because contract workers often come
from a variety of previous projects each with their own unique
culture, as one interviewee explained: ‘[…] you have to take an
individual who has been drawn from a wide range of diverse
cultures and technical experience and try to bring them into
your culture or into the way that you want to operate’ (012).
The general employment practices category also includes
country compliance risks. Our research revealed that not
staying abreast of the legislation of the country in which the
project is operating to ensure that all employment requirements
are met presents substantial risk to the project. This especially
relates to ensuring that the appropriate visa and work permits
are obtained and current immigration legislation is adhered to.
It was emphasised by the interviewees that compliance could be
particularly difficult if the company was setting up a project in a
location for the first time and would therefore be unfamiliar
with the legal system within the country. Moreover, some
locations were identified as requiring continued efforts to
ensure compliance regardless of previous experience in the
country: ‘[…] at the moment we have had a lot of challenges
with the Philippines, for example. They seem to change their
immigration policies almost on a fortnightly basis’ (008). It was
reported that meeting some of the requirements of particular
countries could add significant time to the process of obtaining
an appropriate project workforce and this was seen as a
significant risk to timely acquisition of key skills for a project.
An additional risk was identified in this dimension related to
the prevalent use of intermediaries in the employment of
contract workers, and ensuring clarity of responsibility between
operating company and intermediaries. In addition to the use
of freelance or individual contract workers on projects, the use
895
of labour hire agencies is a common practice. The challenge in
these situations is creating clarity very early in the project
concerning the division of responsibilities and liability between
the intermediary or the individual contract worker (often with
their own legal entity) and the operating company of the
project. In relation to establishing such clarity one interviewee
explained: ‘It's down to having those open communications
[with labour hire providers], the sort of compliance piece. I
don't think a lot of people have that as part of their upfront
discussion. … [having] a good dialogue early in the piece to
establish the ground rules’ (002).
Another reported risk under general employment practices
was ensuring compliance with company employment policies;
in particular ensuring contract workers are aware of and follow
company policies such as health and safety polices and bribery/
corruption policies. Under the broader theme of health and
safety, various aspects were mentioned including, ensuring
fitness for work (physical fitness, compliance with drug and
alcohol policies), preventing harassment, and ensuring sick
contract workers do not attend work. The need to address these
risks was raised by many of the interviewees: ‘… we often have
a lot of challenges around our fitness for work issues and that
could be things from alcohol-related policies through to actual
physical fitness, to be working on site’ (008), ‘They [the
contract workers] tend to not want to take sick days, even when
they are sick as a dog because they won't get paid if they don't
come in. There is a lot of people coming in…germs everywhere
and people get upset’ (012).
In summary, the risks relating to general employment
practices were related significantly to compliance (both at the
country and organisational level), aligning contract workers
with the organisation and ensuring an understanding between
all stakeholders in the employment relationship, particularly
when intermediaries were involved. The inability to address
these risks represents the increased possibility of breaches of
either legislative requirements or company policy and resultant
financial sanctions or at least disruption to work as these are
addressed.
4.3. Staffing
An area presenting significant risks for projects, is maintaining
appropriate staffing. The findings in the area of staffing related to
appeal of the project, skills shortage, poaching, clarity of skill
requirements, filling critical roles, HRM policies and processes,
mobilisation time, and setting expectations.
Lack of ability to attract an appropriately skilled workforce
for a particular project was seen as a substantial risk for
projects. Interviewees reported that project appeal was a
critical factor in the attraction of an effective workforce. In
particular, the project location, size, duration, timing, state and
operating company all played a vital role when attracting the
necessary skills. The observation made by a number of the
interviewees was that contract workers generally prefer to work
in locations that are regarded as safe and where taxation
legislation is less onerous. One of the interviewees explained,
‘The tax rate in various countries is one of the main barriers to
896 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
being able to source individuals in a particular location’ (008).
In addition to location, it was reported to be easier to attract
contract workers if the project is of a larger size and in the early
stages of operation, making the duration of the project longer
for those who join: ‘[…] you won't always get the guy you want
because if, for example, [Company name] has got a big
lucrative job going’ (004) and another reported: ‘Typically, we
see individuals moving because there are longer durations’
(008). Another element of project appeal is that of timing: ‘[…]
it's all about timing, there's a timing window when other
clients, other projects are going to be in a situation where they
[the contract workers] will have available slots’ (007). More
skilled candidates will be available if the project is recruiting at
a time when few other projects are hiring or when other projects
are in the completion phase.
Summing up how the overall makeup of a project can affect
recruitment, one interviewee reported: ‘…it's about how you
articulate/sell them [the non-monetary elements of the project];
but that's around things like the culture/structure of the
organisation that you have, how many tiers of management
are there, what opportunities are there for progression and for
new roles; what locations the individual is going to be working
in; what's the cultural mix of individuals within your
organisation; all of these types of things create unique selling
points for organisations and it is not so much about the dollars’
(008).
Another key risk in this dimension was skills shortages and
the difficulty that can arise in finding sufficient individuals with
the required skills for the project when these are of limited
supply and in high demand: ‘There seems to be just not a lot of
people in the marketplace that have operating…skills right now’
(013), ‘We are all in that same space, looking for much the
same skills’ (003). Poaching is very closely related to skills
shortage as it relates to the retention of skilled workers in an
environment where competing projects may be offering
attractive packages in order to encourage contract workers to
‘jump ship’ as one interviewee reported: ‘So you have got a
constant situation where companies are trying to entice your
best people off the project.’ (007), ‘[…] you are always at risk
that that person could leave, if someone came headhunting and
had a better offer tomorrow’ (010).
Another staffing risk identified was a lack of clarity about
the capabilities required for particular positions, in terms of
both technical and soft skills. It was reported that a lack of
understanding of the necessary capabilities can lead to
appointment of inappropriate individuals and risk premature
turnover or at least a lack of critical skills. In the haste to
appoint individuals, sometimes roles are not sufficiently
detailed to brief either internal or external recruiters on specific
project needs: ‘[…] it's understanding what you need, what
stage your business might be at.’ (003), ‘[…] having a clear
understanding of scope of work and what it is that we are
looking for somebody to do is really critical […]’ (008).
Filling critical roles was also mentioned as a staffing risk, as
some roles will be more central to the success of a project and
therefore have a greater influence on the project: ‘I think getting
the right people in half a dozen key boxes is fundamental. If
you get that wrong, you are setting yourself up for internal
issues and those are the biggest risks […]’ (002)
On a more systemic level than those mentioned previously,
the lack of, or inconsistent application of, sufficiently rigorous
and effective HRM policies and processes, was seen as another
key risk in the staffing dimension. As illustrated by the
following quotes, this includes having standard procedures for
reference checking, contract finalisation, and consistent and
errorfree payment: ‘I am also intrigued by the lack of formal
reference checking.’ (002), ‘And they [the contract workers]
will move because you stuffed up their pay once.’ (010), ‘Our
biggest challenge is making sure people actually have a
contract when they walk in the door’ (004). Interviewees
reported that a lack of thorough reference checking has
previously led to inappropriate appointments, and that issues
relating to pay and contracts have often meant the loss of highly
skilled workers.
Moreover, whether or not policies and procedures are in
place, interviewees reported that another risk was the time it
takes to source, hire, and upskill contract workers before they
can contribute fully to the project. Thus mobilisation time was a
risk reported by numerous interviewees: ‘Lead-in time has been
much longer than I would have envisaged. So we are basically
under-resourced because we can't get the people in place
quickly enough.’ (005), ‘I don't want to recruit them today and
spend three weeks with them until they are actually delivering
something back’ (006).
Finally, in regards to the staffing dimension was the issue of
setting expectations and ensuring a realistic picture was
provided to potential workers relating to the position, the
specifics of the project, and information about the location of
the project. As two of the interviewees explained: ‘Quite often,
the people who come in are not given the correct image of what
we are actually asking […]’ (002), ‘And that's very important,
to be sure that people come here with the right understanding of
what is required of them and what is put in place to look after
them’ (009).
In summary, the staffing dimension received a significant
amount of focus from the interviewees and the risks within this
dimension ranged from external conditions such as lack of
appropriately skilled workers in the labour market, to internal
risks such as a lack of clarity of needs or inadequate application
of HRM policies and procedures. Each of these risks was seen
as having the potential to slow the progress of projects through
either the loss of capable workers or the inability to attract them
in the first instance.
4.4. HR development
The main risks identified in the HR development dimension
related to induction, approaches to upskilling, and career
development opportunities. The first risk in this area related to
the processes for induction, often referred to in this industry as
‘onboarding’. In particular, it was identified that even though
induction is critical for integration of all new workers onto the
project, often contract workers in particular were not given
appropriate inductions: ‘[t]he first challenge with on-boarding
 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
is that it's not there’ (004). As another interviewee explained,
when these processes are present, effectiveness is enhanced: ‘If
you invest and have an on-boarding process which is quite
detailed, then I think you get a faster return.’ (012). It was
recognised that it does take time to get contract workers up to
date with technical skills and familiarise them with policies and
procedures, but it was also emphasised that it is critical to
induct for culture: ‘establishing the way we work’ (006) and
aligning contract workers’ values and behaviours with the
culture of the project: ‘[…] it's always the soft stuff that is the
hardest to get going’ (004).
When inducting individuals on a project it is essential that
they are equipped to function in the intended role; often
requiring upskilling of contract workers. Frequently it was
assumed that individuals would have all the necessary
competencies but this was often not the case: ‘Not a lot of
people have specific technical experience. We end up getting
someone who is close and having to invest a lot of time training
them’ (013). Reportedly, ensuring that contract workers possess
the needed skills and competencies was of increased difficulty
due to skills shortages in the industry and in times of high
competition from other projects. According to one interviewee
this sometimes resulted in ‘promoting people into levels
beyond experience because we [the company] don't have
enough people to fill the roles with qualified people’ (005).
Interviewees also pointed out that career development
opportunities on projects often do not extend to contract workers
and this presents a risk to retaining these critical individuals: ‘[…]
you are often not looking at career progression. You know that
you are there to do a job, to get paid and finish and that's it. When
you are in a staff role, there is a whole different set of expectations;
training, advancement, pension’ (004). It is often not seen as
necessary or appropriate to consider the career development of
contract workers: ‘…at the end of the day the project is a finite
period of time that, in the order of two/three years usually, and so
it's very much a “here and now, this is the job you need to do” and
the contractor will manage their own career move as to where they
go next’ (010). However, the consequence of not providing these
opportunities was recognised by some: ‘[…] it just gives you [the
manager] a lot less ability to secure the person, I suppose, and to
use those intangible benefits to motivate them’ (010).
In summary, not appropriately inducting contract workers
who join the project and getting them up to speed both
regarding technical and non-technical aspects is seen as a risk
to projects, and it is reported that there is often a lack of
procedures for doing so. Ensuring contract workers possess the
necessary capabilities required, or are sufficiently upskilled is
problematic and only made worse by the skills shortage and
competition from other projects. Moreover, career development
and progression is also a risk as contract workers are often not
offered such opportunities due to the less permanent nature of
their employment.
4.5. Compensation and benefits
As is the case for most organisations, interviewees reported
remuneration and benefits to be a major risk, along with risks
897
relating to equity in the rates and benefits of contract workers.
The remuneration of contract workers was a topic raised
consistently in the interviews, and was reported as being of
great importance to effective operations and a large potential
risk for retention of those employed on a contract basis. In the
first instance, the remuneration or compensation offered highly
influences whether contract workers will join the project as it is
one of first criteria upon which contract workers will judge a
project: ‘[…] when you are talking about a contingent
workforce of a big project, it will depend on how much you
are paying. Money is very influential; salary is very influential;
much more so than in a normal environment’ (010).
However compensation is not just of critical importance in
the early phases of the project. It was reported that the rates
paid will continuously influence the retention of contract
workers, and that strategies need to be in place to retain these
workers: ‘the best people will leave, because we don't put
retention bonuses, we don't put short-term/long-term incentives
in our contingent labour hire packages’ (004).
The other dimension of the findings concerns the establishment
of perceived equity in the rates of contract workers; between
contract workers under differing arrangements (various labour
hire agencies, individual contract workers) and between contract
workers and permanent employees. It was reported that the lack of
equity in rates paid for similar roles can create problems and foster
negative feelings in all those working on the project: ‘[…] ensuring
that we keep parity between the individuals that we have in place’
(008), ‘As a manager, I think that's where you need to work
with the staff on understanding the intangible benefits that they
have – and they are things like career development and future
opportunities – and to express that; that they are being looked after
and there's benefits there that the contract people don't have’
(010).
In summary, compensation and benefits was seen as one of
the key sources of risk in terms of both attracting the necessary
workforce for the project and retaining individuals working on
the project. There was both an absolute and comparative focus
in this area; that what was on offer was attractive and that it was
also perceived to be equitable within the project and between
individuals. The lack of equity was reported to be a source of
labour turnover and of reduced morale with the potential to
impact the success of the project overall.
4.6. Project completion/demobilisation
Because projects are by definition temporary in nature,
another dimension was added to the Rynes et al. (2002)
framework to capture the risks presented by the last phase of a
project, the demobilisation phase. Interviewees reported two
primary people-related risks in the final stages of projects:
retention of skills for project completion and for future projects
and knowledge management.
The risk of not retaining the necessary skills to complete the
project was reported to be a critical risk: ‘I think if your project
is coming to an end, then contractors start looking for other
jobs, which is understandable, so that they can leave before the
end of that contract.’ (005), ‘So the greatest risks to a project are
898 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
losing people in the final throes.’ (007). Retention was viewed
not only as critical for the current project but also for the benefit
of future projects. For example the need to identify where
contract workers can be utilised upon project completion was
often mentioned: ‘the biggest challenge is how to find them the
next job; that's their biggest concern at that time’ (11).
Second, at the demobilisation and completion stage of projects
was a specific risk relating to knowledge management and
capturing the knowledge of contract workers before they leave,
whether their departure is planned or due to unexpected
circumstances: ‘The biggest issue with the contractor stuff, you
are not retaining the corporate knowledge, the experience
in-house, obviously’ (002), ‘But it's always a risk that as different
people leave, you are going to have that corporate knowledge go
out the door’ (010). In particular, knowledge management also
relates to securing any confidential information: ‘So there is
always a tendency or inclination, temptation, call it what you like,
for contractors to take with them information about how they did
the project they just left or finished on; what they did, what was
involved, what it cost, schedule information, procedures’ (009).
So it is clear that as a project draws to completion it is
critical to consider the increasing risk of turnover, even though
it is a risk throughout the project, and to also consider how to
capture, retain and secure the knowledge assets of the operating
company that will be required for future projects.
5. Discussion and conclusion
The need to effectively manage risks in projects is certainly
acknowledged, and Barber (2005) argued that internally generated
risks are an important risk category to consider, but they are
difficult to quantify or classify and require further investigation.
This research has provided a unique opportunity to identify
internal risks, particularly those relating to a workforce comprised
of a large proportion of contingent workers. The significance of
the workforce to project success has been previously acknowl-
edged (Belout, 1998; Huemann et al., 2007; Popaitoon and
Siengthai, 2014), however in this research we have argued for a
new way of thinking about workforce-related risks and have
considered these within a framework of key HRM areas, where
specific risks were identified.
Whilst each HRM function was considered separately, it was
also evident that there were relationships between functions and
between key risks identified. For example, remuneration and
benefits was a key theme in and of itself and had ongoing
implications for management of the project, but also played a role
in the appeal of a project for the purposes of talent attraction in the
first instance. Likewise, the level of support and the attitude of
managers within the management practices area could certainly be
linked to elements of cultural alignment in general employment
practices; managers set the tone that enables effective alignment of
all workers within the organisational and project objectives. In this
respect our findings reinforce the calls in the mainstream HRM
literature to consider the configurations of practices rather than
practices in isolation (Verburg et al., 2007).
It is acknowledged that many of the risks identified as critical
for project-based organisations may apply to other forms of
organisations however our research reinforces the importance of
consideration of these risks in this particular context. Indeed, our
research may also assist to dispel beliefs that some HRM practices
are not necessary for contract workers; a claim currently being
questioned (Popaitoon and Siengthai, 2014). In fact it was found
in our research that issues such as career development and
performance management were expected to be appropriately
applied to these workers, and their absence presented risks of
turnover and lack of engagement.
Project-based organisations represent a unique organisational
form however even these organisations can configure themselves
in a range of different ways. A critical issue for most projects is the
creation and utilisation of knowledge (Hobday, 2000) and this
becomes a particular challenge when a large component of the
workforce is contingent. Maintaining knowledge both within and
across projects is critical, and recent research argues the
importance of developing absorptive capacity in these projects
and the critical role HRM practices can play in developing this
critical capability (Popaitoon and Siengthai, 2014).
Ultimately, the risks identified by this research represent
significant threats to a project in terms of cost overruns,
inability to meet project schedules, and financial, legal and
reputational damage. As a result of this research, an approach is
offered to expand the single HRM element in the PMBOK
(2013) by documenting specifically some of the HRM aspects
that may need to be managed and addressed on projects,
particularly with a contingent workforce.
Most importantly, we have drawn together the two areas of
RM and HRM in projects; an outlook that has been argued to be
essential for some time (Belout, 1998; Belout and Gauvreau,
2004; Nickson, 2001), but not addressed to any large extent.
Our research advances ‘a more holistic picture of project risks’
as called for by Lehtiranta (2014, p.11), and in turn increases
awareness and ability of managers to act on and mitigate these
risks. Whilst the paper refers to HRM functions, it is critical to
note that we are not necessarily referring to the role of specific
HRM professionals or an HRM function within a project.
Indeed, it is often the case that an HRM function does not exist
within a project, and HRM practices are implemented by
project managers and operational managers (Bredin and
Soderlund, 2011). In fact, a recent study by Medina and
Medina (2014) emphasises the importance of project managers
understanding HRM issues, particularly in relation to selection,
training and development, performance measurement and
internal promotion. Indeed, as a part of this understanding we
also argue that knowledge of the risks associated with these
HRM functions is equally important for project managers.
As with all research there are limitations of our study, and
opportunities to build upon our findings. The information
gathered relates specifically to the perception of the inter-
viewees and in the future, the impact of identified risks could be
further validated by quantitative approaches to measuring their
impact on project outcomes. Likewise, this research was
conducted in a specific industry context and therefore any
application to alternate industries would need to be undertaken
with care. However, even though the research was conducted
in a single industry with a large contingent workforce, it is
 K. Becker, M. Smidt / International Journal of Project Management 33 (2015) 889–900
possible that many of the risks identified may be relevant to
other industries and workforces, and future research should
seek to explore these different contexts. Furthermore, a
relationship is likely to exist between the different risks
identified and future research could more fully explore these
relationships. It is also critical for future research to go beyond
the identification of risks and continue on the journey of RM to
identify appropriate risk mitigation strategies. Whilst a
significant number of risks emerged, it is likely that mitigation
strategies may serve to address more than one risk and reinforce
the complex interactions between HRM functions.
In conclusion, it is clear that although the importance of
HRM and RM in projects has been recognised, we believe that
these two bodies of literature could well be enhanced by
looking for the interplays between them. This research has
served to build a level of detail into the identification of
workforce-related risks in projects that has previously been
absent. However this is just the first step. Project-based
organisations need to be prepared to not only identify these
internal risks, but to begin to build mitigation strategies into
project planning for the long-term success of projects.
Conflict of inrterest
The authors declare they have no conflicts of interest.
Acknowledgements
This work was supported by the Australian Government's
Department of Industry's Researchers in Business Program in
conjunction with Air Energi.
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