Without wishing to be rude – the construction industry is getting old.
Perfectly natural of course, but it’s starting to have a negative impact on the sector’s ability to deliver.
Natural ageing isn’t a problem in itself, but a lack of young people coming into the industry to fill the shoes of those who retire certainly is.
In fact, the industry is now facing a shortfall of around 400,000 new people over the next 7 to 10 years.
Apprentices are going to be key to rebalancing
The Chartered Institute of Building (CIOB) has reported that the industry will need to find 157,000 new recruits by 2021 in order to keep up with demand.
The shortfall affects all kinds of construction too – commercial and domestic. A survey from RICS found skills shortages are holding back the sector, with 62% of surveyors citing it as an impediment to growth.
That figure is up from 40% in 2012 when RICS began its quarterly UK Construction and Infrastructure Market Survey.
The Federation of Master Builders (FMB), in its quarterly report on the state of the industry, found that companies are particularly struggling to recruit bricklayers and carpenters. Demand for skilled plumbers, electricians and plasterers is also outstripping supply.
“Skills shortages are skyrocketing, and it begs the question: who will build the new homes and infrastructure projects the Government is crying out for?” said Brian Berry, chief executive of the FMB.
The problem goes far beyond simply finding bodies to fill gaps – it’s about skills and knowledge.
And that situation is exacerbated by Brexit which is already reducing the number of available EU nationals coming to work on construction sites in the UK.
One large UK housebuilder has pointed out that 50% of its subcontractors come from Europe, so Brexit could cause major problems for the business.
But let’s be honest here. It’s easy to point to Brexit as the source of yet another problem. However, we all know that the number of apprentices being taken on in the construction sector has been falling over time.
For years now, finding skilled workers in Europe was a quick (and seemingly easier) solution than training young people. Brexit and demographics have simply exposed the problem to the light.
There can be no doubt that apprentices are going to be key to rebalancing. Upskilling existing workers will be helpful, but we do need to get some young blood into the industry before it fades completely. The Apprenticeship Levy is intended to assist with this.
The Levy is paid by employers with payrolls of £3 million and above which creates an estimated pot of around £3 billion. This money can be access by all companies – not just those who pay the levy – to subsidise apprentice recruitment and training.
The idea is that large companies can in theory claim back all of the money they pay into the Levy be accessing funds for training, while also supporting the wider industry.
What’s more, the larger employers can transfer up to 25% of their levy funds to smaller supply chain partners from April 2019.
This is a good move for the construction industry, given its structure of large contractors using smaller sub-contractors to deliver skills at the front line.
Modernise or die
The RICS report refers to ‘lack of sufficiently skilled workers’ as an obstacle for many businesses. And Mark Farmer’s ‘Modernise or die’ report referred to labour shortages as a ‘ticking time bomb’.
Most SMEs probably consider our uncertain political and economic times as something they can’t do much about but taking on an apprentice (or more than one), with financial support from government, seems like a good way to make the future a bit more predictable.
Not only do apprentices offer a way to ensure you have the current skills required for the business today, they will embed the new knowledge required for the construction sector of the future.