Construction Industry Skills Shortage

From Apprentices, Brexit and an ageing workforce through to Equality, Diversity and Generation Z. The UK Construction industry faces an increasingly challenging decade when it comes to filling the right vacancies with the right people.

No politician worth their salt will miss a photo op with a hard hat and a high-vis jacket - ask them what they're doing to address the skills shortfall however and you're not likely to get much in the way of specific policy.

Whilst there are certainly things government can do to help, the best companies are looking for their own solutions.?

The Scale of the Challenge

Estimates for skills shortages in construction are startling.?Just shy of a million extra people are needed over the next decade just to fill the gap (according to the UK Trade Skills Index).

That's based on current projections.?Add in potential additional investment in public infrastructure and (fingers crossed!) strong economic growth over the next decade - to make up for the dismal economic performance of the last 15 years - and the challenges of a skills shortage becomes even more stark.

The impact of the credit crunch and great recession of 2009 caused significant shortage of skilled individuals with 10-15 years experience in the industry.?Unless things change the industry is on the same trajectory of skills shortages for the next 15 - not least because Brexit has meant the end of free movement so government and business can no longer rely on European workers filling the gap.

Some Solutions

Immigration – the Hot Potato

One solution as mentioned above is immigration of skilled workers. But given the hot-potato that immigration is for a government of either political persuasion it looks like a distinctly unattractive proposition for politicians and central government.?

Last year the government added several trades to the SOL (Shortage Occupations List) including bricklayers and plasterers but the likelihood is that immigration of skilled labour will get more difficult in the medium term.

Equality and diversity

Another part of the solution that would inevitably increase the number of people entering construction in total would be to improve equality and diversity across the industry.

There have been significant strides in the last 20 years but women still account for only 15-20% of the workforce (depending on which survey you use). Ethnic minorities are underrepresented to the tune of 33-50% compared to the overall UK population. And almost 1 in 4 working age people in the country also report that they have some form of disability with around half being unemployed - with many saying that stigma and unconscious bias are a barrier to their entry into the work force.

It doesn't take a mathematical genius to work out that making construction more attractive to those groups could dramatically increase the total workforce.

Making construction more attractive to women and minorities isn't easy, the industry has certainly made progress, but surely more can be done.?

A young person told me recently of a careers fair at her school - a company (that will remain nameless) had gone with a stand, some leaflets and free pens. The three guys running the stand were all white and male - this is a careers fair at an inner-city, all-girls school.

Study after study (and common sense!) has shown that people are attracted to careers when they can see people like them being successful in those industries.

Study after study has also shown that companies with greater diversity also make better decisions and perform better financially.

Greater involvement with local communities by contractors - particularly schools, colleges and universities - certainly helps. Offering flexible working arrangements will certainly help some too.

Showcasing the positive impact buildings have on communities and add in the work the industry is doing on social value and the environment and construction looks even more attractive.

Social Value

What do young people care about when looking for a career?

Recent studies have shown that young people are interested in jobs that have value, that help people and communities and that offer work/life balance above money.

Social value and the environment are things that come high on the lists. The latest college and university leavers are looking for an employer and an industry that doesn't just offer high salaries (which construction certainly can!).

Many people outside of construction are unaware of the vast range of career options available and tend to think only in terms of trades and labour when they think of construction. There are myriad new career options opening up too - with Environmental Advisors and Social Value Managers being unheard of only 20 years ago.

Community engagement by firms at a local level will certainly raise the profile of the business, will help in attracting staff at all stages of their career and can be a great addition to business development.

Modern Apprenticeships

There are numerous ways that Apprenticeships can be brought into a business with significant funding from government. The Apprentice levy is charged to all businesses with an annual pay bill of ￡3 Million and above charged at 0.5%. There are various ways that employers can use that levy to fund investment in training. Whilst the levy must be used to fund apprenticeships this can mean a very broad range of things – there are 650 different types from GCSE level up to degree level training.

Larger organisations can even pass part of the funding on to smaller businesses in their supply chain. So for small contractors and sub-contractors there can be funding available that they may not be aware of.

There are also a number of financial incentives such as no National Insurance is paid for Apprentice’s wages if they are under 25 and 100% of the training costs are paid by government for smaller businesses (less than 50 employees).

Learning & Development - Upskilling Faster

One way in which the best employers are identifying and addressing skills gaps is to implement Learning and Development programmes (L&D) to upskill their staff more quickly.

Identifying skills gaps in their workforce at both an individual and company wide level is a fundamental starting point. Creating a culture of training and development by getting buy-in from managers and tools such as L&D platforms will also drive change.

Companies that invest in an L&D strategy are more agile, have a more satisfied workforce and greater staff retention.

But fundamentally they don’t experience the same level of headaches as companies that have to constantly buy-in or replace highly skilled people in their business.

There are certainly things that central and local government could do better to address skills shortages across the whole of the UK economy but the best companies are also working on their own solutions.