With the UK continuing to face a chronic shortage of skilled tradespeople, leading building engineering and fit-out specialist, JCA, looks at the changing landscape for the construction labour market and its future prospects.
A healthy construction sector is hugely important to the UK economy. It generates over £110 billion annually, equivalent to 7% of GDP and employs approximately three million people, a figure that’s representative of 10% of the nation’s workforce.
Construction is a high cost, high risk, long-term activity, so its performance is a good yardstick for the general health of the wider economy. When economic growth slows or declines, therefore, construction investment can dry up quickly but when the economy begins to recover, the industry can overheat just as fast.
Having shed over 140,000 jobs in the 2008 recession with a further cull during the 2012 dip, the sector has found itself in dire need of a range of both professional and practical skills, as the industry has begun to expand once more. It is thought that around 20% of all vacancies in the wider construction sector are persistently hard to fill. This is because businesses are finding it extremely challenging to recruit staff with the right skills, qualifications or experience but demand for such roles is forecast to rise even further this year. The impact of Brexit on the labour market could also weigh heavily on businesses, as around 45% of the UK’s 270,000 migrant construction workers are from EU countries.
Research by the Royal Institute for Chartered Surveyors (RICS) shows that skills shortages are holding back the sector, with 62% of surveyors citing this issue as the major impediment to growth. That figure is up from 40% in 2012 when RICS began its quarterly UK Construction and Infrastructure Market Survey. To compound matters, the retirement rate is on the rise, as 22% of the sector’s workforce is over 50 years old with 15% in their sixties. In recent years, the industry has also lost out to competing sectors, where work is perceived to be more stable.
In tackling this major obstacle to future growth, we must also consider the image of the construction sector within the labour market and perhaps crucially, amongst the next generation of workers. Data from the Construction Industry Training Board shows that the overall appeal of the construction industry as a career option for young people is low, scoring 4.2 out of 10 in the 14 to 19-year old age group.
The Government’s introduction of the new Apprenticeship Levy in April 2017, paid at a rate of 0.5% by employers with a payroll of more than £3million per year, expects to raise over £3 billion a year by 2019-20 in order to fulfil its commitment to increasing vocational opportunities. The funds collected will be accessible to employers who want to purchase Apprenticeship training, regardless of whether they paid the levy or not.
For its part, JCA is exploring the possibility of introducing its own Apprenticeship and potentially graduate-based programmes with the objective of developing ‘home grown’ skills. The Stevenage-based building engineering and fit-out specialist has expanded significantly in the past two years and now employs almost 200 staff.
JCA strongly believes that apprentices have the potential to be the entrepreneurial, motivated business leaders of the future. The company acknowledges that there is a powerful connection between high-quality vocational training and employability but accepts there is a lot of work still to be done to achieve the parity of esteem between academia and Apprenticeships, in order to attract the brightest talent into our sector.
Carol Pape, JCA’s Human Resources Manager, said:
“We need to get young people interested in the sector or the skills gap will widen further. Investing in apprentices and graduates will bring skilled, home grown workers into the market, so we need to work together to appeal to both ends of the spectrum of construction employment. On one side, convincing skilled professionals to see the rewards of working on projects that build a sense of legacy. On the other, encouraging young people to commit to Apprenticeships secure in the knowledge that there is a clear pathway for personal and professional development within a dynamic industry.”
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