The British construction industry has exploded in recent years. The immediate and high jobs-to-skills ratio has caused a critical state of worry to the future of UK employment.
According to figures from the Construction Industry Training Board (CITB), 180,000 construction workers are needed in line with the growth of the industry. This demand has been ‘fuelled by the demand for 245,000 new homes across the UK each year.’
Now the industry is growing rapidly, the demand for these workers is excessive, resulting in construction industry experts calling for Business Secretary Vince Cable to hold a crunch summit meeting.
Additionally, to help address the immediate crisis, 120,000 apprenticeships are needed by 2019; approximately 25,000 per year. This faces a huge challenge to the UK government and needs to be addressed as a matter of urgency.
Insufficient government investment in construction training and industry has been blamed for the current shortage. The private building industry growing at a time when training has slackened, has resulted in major shortages of qualified and experienced construction staff.
A recent report by the Prince’s Trust confirmed that “32 per cent of organisations report skills shortages at entry level” and “72 per cent believe that the recruitment of young people into the workforce is vital to avert a skills crisis.”
Aiden Sharpe. Midlands Regional Manager, of specialist construction recruiters Alpha Recruitment said “Since the beginning of the recession in 2007, contractors haven’t had the opportunity to employ apprentices and train candidates to a suitable industry standard. Due to the lack of construction funding within this period, many contractors were forced to make redundancies which as a result, some tradesmen retrained in other industries.”
As the Construction Skills Network report also suggests, the construction industry was “…hit hard by a combination of public sector spending cuts and a lack of investment in the private sector. With 60,000 jobs lost, and a 9% fall in output, 2012 saw UK construction tip back deep into recession.”
This year has witnessed huge growth for the construction industry. Its expansion is due to a plethora of new developments across the UK. The Markit/CIPS UK Construction PMI for August 2014 has stated that the UK has seen its “…sharpest rise in housing construction since 2003.”
The report also states that “The rate of job creation across the construction sector was the fastest since the survey began in April 1997.” In line with the rapidity of job creation, there were concerns in the report about “…sub-contractor availability.”
82% of respondents in a 2013 survey from the Chartered Institute of Building believe there is a ‘severe’ skills shortage. In 2011, 77% of respondents felt this way, depicting a 5% increase in just two years. According to the report this is a “…particularly worrying statistic given the pronounced decline in construction output and the lasting effects of the recession upon the construction industry.”
According to research from the Construction Skills Network, Blueprint for Construction 2013-2017, the construction industry employs 2.47 million people (across its supply chain) and contributes 8% to GDP; and by the third quarter of 2013, job creation was at its highest in six years.
The UK construction industry is overwhelmed with new developments and the government’s sustainability initiatives, such as Green Deal. These initiatives require more skills in modern methods of construction, such as carbon efficiency and IT skills to use automated design tools.
The UK is currently being driven by strong growth in the commercial and industrial sectors. In some regions, growth rates are exponential, heightening immediate demand for workers. In the midlands, workloads have risen at a record pace of 57%.
According to Simon Girling from specialist construction recruiters Girling Jones “We have seen the demand for UK construction workers soar over the last 12 months. The positions with the most requirements are: Quantity Surveying, Estimating, Site Engineering, General Foreman and Design Engineering.”
Aiden Sharpe added “We are witnessing drastic shortages of site engineers, bricklayers, scaffolders, joiners and CPCS operatives.”
“The construction industry within 2014 has seen drastic improvements with many long term projects commencing also, however due to the shortage of qualified candidates, it’s a much longer process to source the required labour required for contracts.”
Specialist Construction Recruiter Kate Cross from Harvey Jacob feels that problems in the industry are “When the recession and boom cycle occurs, construction suffers first and the hardest. This consequently puts individuals off entering the industry therefore when we enter a boom a skills shortage occurs.”
She also feels that due to the immediate crisis, construction recruiters may see a rise in talent acquisition from overseas and the challenges could also include the “Quality of talent in the industry. Contractors will be stretched to resource projects effectively. Harvey Jacob are already looking to source talent from abroad I anticipate we will see an influx of overseas talent.”
Having an immediate focus on fast-track training and development in the construction industry is vital to the survival of the industry. Without these skilled workers, construction projects will take a long time to be completed or in severe cases even cease. This situation will not only cause problems to the construction industry, but to the economy as a whole.
The latest employment figures show that bricklayers claiming out-of-work benefits have dropped sharply to just 1,775 in August this year from 15,425 in March 2009.
Construction wages are up 4%, highlighting the strength of the sector in contrast to other sectors struggling to meet inflation.
It’s bad news for permanent recruiters as contractor pay rates are soaring. Simon Girling added “The increase in demand has meant many permanent employees have taken the leap to contract work as they feel confidence in the market and long term work. We have also seen contract rates increase by up to 50% in some areas as clients fight to staff up their new and existing projects.”
Never has there been a time when the demand for skilled construction has been so high. Whilst the skills shortage in construction hits crisis level, employers will literally be in a talent war and will have to employ strategies to survive in an attempt to bring contracts and projects to completion.