Addressing the skills shortage in the construction and engineering sector remains a difficult challenge, but is it one that can be overcome? PBC Today discusses…
The government is pushing for more homes and more infrastructure, but the construction sector is in the throes of a very real skills shortage that could hinder progress.
In a bid to tackle this the government announced at the start of the week Lord Adonis—a former Labour peer—would be leading a new committee. His role will be ensure the country is able to keep building, irrespective of which party is in government.
There is no doubt the construction sector is under significant pressure. Last month the government announced plans to increase its housing target to one million. Given the fact the Conservatives failed to meet any targets set between 2011 and 2014 under the former coalition administration, it seems this goal might be an overreach anyway, but building that many home requires significant numbers of skilled workers.
The problem is the sector is woefully underrepresented. There simply are not enough skilled workers to meet growing demand from the housing sector, as well the transport.
Last week, an analysis warned up to 100,000 new construction workers would be required to meet the £411bn worth of upcoming infrastructure schemes.
The National Infrastructure Plan for Skills report, which was put together by Infrastructure UK, was published by the Treasury. It warned around 250,000 workers will also need to be retrained for the 564 projects scheduled between now and 2020. The sector will also need to find around 150,000 more engineering construction workers by the end of the decade.
These figures alone illustrate the depth and desperation of the problem. It is highly unlikely the vast number of workers needed can be found between now and the end of the decade.
The issue is further compounded by the fact around nine per cent of employees are set to reach retirement by 2020. This will see an increased demand for younger construction workers, meaning apprenticeship programmes will need to work even harder to bring in fresh blood.
The analysis, which will be used to examine how the skills shortages within the construction sector can be fixed, is a case of too-little, too-late. With a massive shortage of workers, it is difficult to see how the sector can successfully keep up with growing infrastructure demands without urgent action.
Speaking at the time of the report’s release, Commercial Secretary to the Treasury Lord O’Neill said: “It is crucial we have the right people with the right skills in place to build and maintain our first-class infrastructure, essential to rebalancing our economy.
“This report is just the first step in addressing how we can work with industry to ensure our workforce’s competitiveness for the future.
“We’ll now develop a clear action plan, set to not only strengthen the economy by delivering our most ambitious projects from transport to energy, but improve the quality of citizens’ lives too.”
However, this doesn’t fix the immediate issue: 100,000 extra workers are needed—not to mention the quarter of a million employees who will need to be retrained.
The shortage of skilled workers has been an ongoing issue since the sector picked back up following the recession. According to the analysis one of the main reasons behind the shortage is a fragmented approach to skills planning. Other issues include firms tailoring training to their specific needs. This, the research suggested, was making it difficult for workers to move between construction projects. Additionally, the rapid growth of the sector meant recruitment could not keep pace.
One area the government has focused on is apprenticeships. There is no doubt this group have a significant role to play in the construction sector. In a bid to encourage more firms to take on apprentices, the government is looking to change the apprenticeship levy, giving more control to employers. The consultation on this ended on 2 October and will no doubt be followed by significant discussion.
Whether amending the levy would change anything is difficult to say, but there is little doubt something has to be done. The Recruitment and Employment Confederation (REC) said today that shortages in construction and engineering has now reached “critical” levels, with employers finding it increasingly difficult to recruit skilled staff.
Chief Executive of REC Kevin Green said: “As politicians make their big pitches to workers and to business at the party conferences, the UK jobs market is entering a new phase.
“Talent shortages are making it increasingly difficult for employers to find quality candidates.
“This is now at a critical stage in the construction and engineering sectors, constituting a major threat to planned rail upgrades and housebuilding projects.”
Additionally, REC warned government policies such as the new National Living Wage of £7.20 per hour, which will be implemented from next April, could place even more stress on the sector.
“The planned introduction of the national living wage is causing businesses to consider alternatives to hiring more staff and this could lead to greater automation in some sectors,” he said.
The National Living Wage, while seemingly problematic for the sector, is coming. In six months’ time, the increased pay will be implemented across all industries—not just construction—and will need to be tackled.
With major road and rail infrastructure projects planned over the next five years, the shortage of skilled workers is set to become a major issue.
Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union, said: “There is already a massive skills shortage on rail infrastructure which is contributing to delays in delivering essential upgrade and renewal projects and that problem is set to grow over the coming years, compromising works crucial to keeping pace with surging passenger demand.
“The problem is worsened by fragmentation and casualisation in the rail industry which puts the critical issue of workforce planning as a very low priority against the demands to slash budgets and cut corners.”
Dave Hulse, national officer of the GMB union, said: “We have been warning every employer connected to construction for a very long time that there was a need to recruit young apprentices into the industry.
“This report shows that these warnings were not heeded. The Government cannot afford to leave training for skills to chance.
“Higher nationally agreed rates of pay are needed to bring highly talented and skilled people back to the industry and encourage young people that there is a career in construction.”
However, a Government spokesperson said the government was working to ensure the country has the skills needed.
He said: “This includes supporting construction firms to deliver courses from steel-fixing to digital engineering.
“Employers in different industries, including construction and rail, have been designing apprenticeship standards for the roles they need, as we deliver three million apprenticeships in the next five years.”
The shortage of skilled workers will undoubtedly remain a major barrier to construction growth. Without the right workers in place the sector cannot hope to meet demands set by the government. Overcoming these difficulties will be challenging and while some of the measures being implemented by the government are certainly welcomed it is a case of too-little, too-late. Finding the required number of workers needed to fulfil these contracts will be next to impossible unless radical action is taken.
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