Why is there a skills shortage?

The release of the Autumn Budget and an overhaul of construction apprenticeship and training programs has brought attention to the chronic skills shortage in the construction sector.  After the loss of an estimated 400,000 skilled workers in the financial recession the industry remains on a back foot. In the CITB’s latest report on Skills & Training they revealed that 20% of business said they had skills gaps in their existing workforce, up by 12% compared to the last report.

This shortage is only set to increase as Brexit looms and the industry depends on an ageing workforce.  Research published by the Office of National Statistics shows 24% of UK construction workers aged 45–54 are set to retire in the next 10-20 years. And this ageing workforce is not being replaced.

What is being done to plug the gap?

The Government has launched a number of initiatives in recent years to try and address this problem.

Construction apprenticeships, the traditional mainstay of skilled labour supply, have been given a boost. A new government target of 3 million new apprentices by 2020 has been announced.

£34 million has been earmarked solely for construction training. The Apprenticeship Levy came into force in May, estimated to raise £3bn a year so that employers can take ownership of training, with at least 90% of the funding being supplied for smaller employers.

Aside from the traditional apprentice route, other training methods are being developed.

The newly announced National Retraining Scheme aims to retrain adults for new professions. ‘T-levels’ will streamline 13,000 qualifications into 15 good quality technical qualifications to rival the existing A-levels.

How effective are these measures?

Recent DfE figures show that the number of apprenticeships fell by close to 60% in the quarter since the levy commenced. There has been widespread criticism of the scheme’s complicated framework. Many employers are facing challenges accessing the financial resources and are even delaying the start of apprenticeships, resulting in calls for reform. These teething issues could cause setbacks from the start to the 3m target.

The retraining scheme has also attracted criticism, with Liz Jenkins, partner at Clyde & Co commenting “Retraining adults as construction workers would provide some labour but once they retire we’ll be back to square one, unless we’ve trained a significant cohort of today’s young people to fill the gap.  This initiative needs to be coupled with effective management of the CITB reform and ensuring the money received from the levy is invested to ensure future generations of construction workers will be there to build post-Brexit Britain”

In the short term these measures are unlikely to provide an immediate solution. As we potentially lose our stretched workforce to retirement and Brexit in 2019, many training schemes may not begin until 2020 so it may be a case of too little too late. The next decade could be a difficult time for our sector if we cannot meet demand.

How do we future proof the industry?

Despite these issues, the renewed focus on construction apprenticeships and training is vital to the future of the industry.  The sector deal has been welcomed by associations that consider investment and training to be at a critical point. These are all positive steps towards securing a skilled and stable workforce.

The trailblazer apprenticeship schemes have been met with widespread industry approval. Partnering companies to create construction apprenticeships, they ensure the quality and relevance of training and ensure the right sectors are being developed. Similarly, the levy concept was built around the need for employers to take control of training to ensure that it is high-quality and relevant. It makes sense to supply the industry with the tools to deliver the apprenticeships and skills it sorely needs. Once awareness of the scheme and the application complications have been improved the levy will be a vital resource for the industry’s future.

In the long term the sector will need to embrace the digital revolution that will be a vital lifeline for the centennial generation workforce.  Innovations in materials, offsite modular construction, and BIM modelling to name a few could help attract a tech-savvy workforce.

The construction industry must work to develop an image away from the hard hat and the building site, embracing innovation, diversity and expertise if it wants a strong future.