The sector has become heavily reliant on construction workers from the European Union, as it takes years to train skilled tradespeople. Last month’s Brexit decision is likely to deepen the UK’s skills shortage. Across the UK, nearly 12% of the 2.1 million construction workers come from abroad, official figures show – mainly from the EU. Experts say the actual number is even higher. The evidence is clear – a squeeze on the labour market risks turning a shortage into a crisis.
Skills shortages are a problem for various reasons, but primarily, there may not be enough people to build the houses and infrastructure we as a society will need in the coming decades. The other issue which is not often talked about is the impact of wage inflation. Any significant squeeze on the flexibility of the labour market could drastically increase the cost of wages. According to a recent report, the shortage of critical resources such as linesmen, signalling designers, and test and commissioning engineers, in the rail industry, could lead to wages increasing between 25 and 40% in the next five years. A similar trend is likely to engulf the construction sector and would present a real problem, making projects costlier and, potentially, unviable for development.
The government will need to provide assurances and a policy response that insures we retain the skills of people already working in the UK and make sure that talented people are attracted to working here. However, it is important that we act to address the construction skills shortage for the long term. As part of this the government should maintain its investment in home-grown skills, particularly funding for skills and apprenticeships, but the industry also has a responsibility to address the skills shortage – which existed long before the Brexit vote.
The construction sector as a whole must get more young people interested in working in the industry and bring on more apprentices or it will face on-going skills shortages – with a major knock-on effect to our cities, our housing provision and the wider economy. One of the most glaring gaps is a lack of millennials coming into the industry. The UK has one of the worst levels for youth unemployment in the developed world with close to one million young people not in education, employment or training. And yet we are still struggling to fill the skills gap in the construction industry.
One of the reasons for this is perception; government research shows that the construction sector has an image problem that deters people from entering the industry. This is especially true amongst millennials who tend to view the industry as old fashioned and not very dynamic. A government survey shows that the overall appeal for a career in the construction industry for young people is low (scoring an average of 4.2 out of 10 among 14 to 19 years old) and only slightly higher among career advisers (5.6 out of 10). We need to change, challenge and tackle these perceptions.
Millennials want security and variety in their career; they want to be challenged and valued; but they also want to work for a company of which they can be proud. One of the characteristics of millennials, which is often ignored, is that they are primed to do well by doing good. Almost 70% say that giving back and being civically engaged are their highest priorities. The organisations that are going to benefit most from budding talent are those that accommodate and attract them – especially given that young people are more likely to move between employers, and even from career to career, than previous cohorts.
Working practices will also have to change if this generation is going to be happy in a hard hat. Cultural change takes time, of course – but more immediately, the industry could do a much better job of communicating to young people what’s great about working in construction. For example, the industry is bad at showing the sheer variety of jobs and professions that get lumped in together under the catch-all of ‘construction’. The sector needs to better show that construction has something for everyone, from project managing a multi-million pound commercial high-rise to becoming a building informational modelling specialist, or going into one of the many essential support roles.
One way of doing this is through universities. As explored in the Universities UK and UK Commission for Employment and Skills report Forging Futures, employers and universities are now working in collaboration to create more effective routes to the highly skilled jobs crucial to the country’s economic future, including those in construction. The problem with targeting graduate-level talent, of course, is that every other sector is fighting for the same people. So the industry should also work with primary and secondary schoolchildren, explaining how exciting a career in the construction industry can be and what subjects they should study to get there.
In continental countries like Germany and Spain, construction is held in high regard and young people are actively encouraged to enter the industry, so it is possible to appeal to Millennials. In the UK, there just aren’t enough conversations around the dinner table where parents say: “Why don’t you go into construction?” With the help of a more-up-to-date culture and better communication, we may be able to finally see that change and dispel some of those lingering stereotypes of the construction industry.
This may go some way to meeting the 182,000 construction jobs which need filling by 2018.