The shortage of skill in the construction industry in the UK

Feb 15, 2024

The shortage of skill in the construction industry in the UK

Project proposal

Title: The shortage of skill in the construction industry in the UK.

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Contents

The title of the project clearly stated the area of interest for the research. This research is based on analysing the shortage of skills in the construction industry in the UK.

The shortage of skills in the construction sector has been under debate for the past three years as construction industries have faced a lot of issues related to the decline of the skills in the construction industry. Skilled people are always required in every field and every sector demands skilled people for carrying out smooth operations in the business.   The construction industry is considered to be one of the main sectors in the UK in which the majority of the population of the UK is employed. Different people from different backgrounds are being employed at various positions in construction companies (Díaz et al., 2021). It has been seen that in recent year’s construction industries has been facing a shortage of skills as the people who are being hired in the construction companies are not well-trained. Factors that are causing a shortage in the skill in the construction industry include no proper training to the employees by which they can enhance their skills to be a part of the construction company (Adaloudis and Roca, 2021).  According to the office for national statistics, the employment rate in the construction sector has been decreased from 2.4 million to 2.1 million in the last three years. This shows that four per cent in employment has been decreased in UK-born workers and almost forty per cent decline has been seen in EU workers. It has been also considered that the ageing workforce is one of the main reasons behind the shortage in the construction industry. When the workers reach the age of retirement, it becomes very difficult for the companies to hire new people who are equally competent and skilful as the old employees. The skills of the workers in this field are very important and it demands potential workers to compete for the tasks. Many operators in the construction sector have reported a shortage of skilled workers in the construction sector.

This research question has great significance as it will give a new dimension for the researchers to analyse the factors which can help in enhancing the skills of the workers. This research will be used by future researchers in the construction industry to develop new strategies for helping this sector in terms of the enhancement of the skills of the workers. It is really important to consider all the factors which can lead to the shortage of skill in the constriction sector as it can lead to great loss in this sector (Badi et al., 2021).

The study aims to highlight the factors which are causing a decline in the skill in the construction sector and how the skill of employees can be enhanced in the construction sector.

The research question for the research are as:

  • What are the different factors which are the main cause behind the decline of skill in the construction industry?
  • What are the different factors which must be considered for enhancing the skills of the employees in the construction industry?

The research objectives for this research include:

  • To highlight the importance the skilled workers in the construction companies
  • To highlight the factors which are causing the shortage of skill in construction companies
  • To highlight the factor which can help in enhancing the skills of the employees in construction companies.

The Construction Industry Training Board (CITB) has announced its latest predictions for how many additional construction employees the industry will need to hire. After accounting for productivity gains and changes in task mix, the total for the five years from 2021 to 2025 is 217,000. These will help to increase the number of people working in the business while also compensating for those who will quit. The economic data that underpins these forecasts are significantly more encouraging than many had predicted a year ago. Then, during the early stages of the epidemic, there was concern that rebuilding construction activity and job numbers to 2019 levels would take at least five years. This estimate predicts a significantly more robust recovery, with construction output rising by 11% this year, followed by a sustained growth of roughly 3% over the next four years (Dixon and Umeokafor, 2021).

According to CITB, as the industry grows from 2.7 million to 2.84 million workers by 2025, an annual recruitment rate (ARR) of 43,000 people will be required. This includes around 400,000 professionals who are generally classed as working in the service industry. Carpenters, bricklayers, and plasterers are among the trained tradespeople in short supply, according to builders and developers across the UK (Green, 2021). As a result of the labour shortage, construction projects are stalling and wages are rising, while material costs are skyrocketing as a result of the wider disruption to global supply networks. According to industry experts, the government’s goal of building 300,000 homes per year will be difficult to achieve without a liberalisation of migrant visas and a significant domestic training drive (Lawani et al., 2021). All of this appears to be quite beneficial, and it is in many respects. While the research acknowledges that a shortage of new hires is a problem, it does not specify how difficult it will be for the industry to retain enough skilled workers to satisfy demand. Because of the pandemic’s situation, conducting surveys has become difficult, and the results have become less reliable. Meanwhile, it’s difficult to separate the consequences of the epidemic from those brought on by Brexit. Even though the fog of confounding factors obscuring a stormy ocean of data, the outline of what could prove to be an iceberg on our way to calmer seas in the form of a huge event can be seen. Brexit has been proved to be one of the major factors in decreasing the number of skilled workers in the construction industries. It has restricted many of the workers from working in different regions as different laws were made for the workers after Brexit. Workers of the construction companies who were from the EU were having additional requirements to be part of the different organisations in the UK. This made it difficult for the employees to be part of the different construction companies in the UK.

Figure 1: UK’s builder’s costs (Source: IHS Markit)

The outbreak was exacerbated by the outbreak, which left an insecure workforce in the area entrenched amid repeated losses, and thousands of skilled workers, mostly from Eastern Europe, fled. Meanwhile, Brexit and the end of the free movement of people between Britain and Europe have shown how reliant the UK construction industry is on the work of migrants to fill gaps (Badi et al., 2021). Official government data show that construction activity dropped sharply in April and May after a surge earlier in the year. While the overall forecast for development remains encouraging, the RICS research indicates that industry restrictions are continuing to weigh on momentum. Since the United Kingdom’s exit from the European Union, which reduced the pool of trained employees, labour shortages have been particularly acute. In the last four years, the number of EU construction employees has halved, and contractors who laid-off workers during lockdowns are finding it difficult to rehire them (Turnpenny and Hussein, 2021).

Construction output is forecast to expand 13.7 per cent this year and 6.3 per cent in 2022, despite growing challenges and slowing growth in April and May, according to the Construction Products Association. After a 44 per cent drop in output between February and April last year, a rise in home building in the United Kingdom helped boost construction activity to pre-pandemic levels in the early months of 2021 (Ranci et al., 2021). According to Swain, bricklayers now earn £220 a day, sometimes more, compared to £180 before the crisis. Wages are rising all over the place. Wage increases, according to the prime minister, are a necessary adjustment on the path to the high-skill, high-wage economy that people voted for when they rejected EU membership in 2016. However, there is a risk that inflationary pressures and labour shortages would restrict demand for new investment (Fuller, 2021).

One of the main reasons for the migration of foreign labour is that recruiting and training is a major issue – not just for construction companies, but for the entire sector. The levy-funded industrial training boards established in the 1960s to enhance national skills levels were abolished in the 1980s. The CITB and its sister institution, the Engineering Construction Industry Training Board (ECITB), which covers heavy engineering workers such as those working on big energy, chemical, and process engineering projects, both survived. The need to preserve them was recognised even in the strongly market-oriented political context of the 1980s, principally to correct a market failure (Loosemore et al., 2021). The idea was, and still is, that if construction businesses are left to their own devices, they will poach rather than train the skills they require, resulting in a poorly trained and inefficient workforce. In addition, training is extremely costly, costing tens of thousands of pounds per qualified individual. Companies need worker flexibility, which explains why there is a high rate of self-employment. And potential recruits know that the uncertainty and risk of repeated layoffs comes from flexibility, which is one of the main reasons British millennials are reluctant to participate (Wallis, 2021).

Given this, it’s logical that businesses would seek out a quick supply of qualified individuals who, by their very nature, are mobile. Furthermore, according to the CITB study, employers perceive international workers as being more skilled and having a better work ethic than many domestic workers. The regulations altered as a result of Brexit, and the free movement of labour came to an end. This does not imply that the route is shut down. New hurdles, on the other hand, will deter some, if not many, EU citizens (Loosemore et al., 2021). As a result, we must assume that all other things being equal, the influx of workers from the EU will be lower. That brings us to the present day. The influx of workers hired in the 1980s is nearing retirement age. It will be more difficult to fill their shoes with talented workers from other countries. When there was previously a unified market for employment, the points-based immigration system creates a barrier for EU workers (Watkins and Hochlaf, 2021).

Supply chains have been disrupted, and some industries and locations, such as office and retail construction, are falling behind while others, such as housing and distribution, are booming. As a result, there are zones of abundance and pockets of scarcity. This helps to explain why, as of early May, there were still 166,600 construction workers on furlough in the UK, with two-thirds on complete vacation and a slew of self-employed construction workers seeking income support. The use of these programmes is disproportionately concentrated in London. Architectural design, engineering, and project management, as well as on-site trades, are all part of the construction sector (Watkins and Hochlaf, 2021). And whether it’s the design of a structure or its physical construction, all of these responsibilities necessitate specialised knowledge. In the United Kingdom, many construction employees are also migrant labourers. According to a recent report by the Construction Industry Training Board, as much as a third of construction firms in the UK now employ tradespeople who were born outside of the UK. As a result, if free movement is restricted after Brexit, the skills shortfall may grow (Wallis, 2021).

The UK construction industry is one of the country’s main economic generators, but a shortage of skilled workers is a problem for an industry that is more than most dependent on its workforce. The construction industry is considered to be one of the main sectors in the UK in which the majority of the population of the UK is employed. Different people from different backgrounds are being employed at various positions in construction companies. It has been seen that in recent year’s construction industry has been facing a shortage of skills as the people who are being hired in the construction companies are not well-trained. Construction employers and temporary employment agencies are aware of the shortage of qualified personnel; competent professionals in the craft recruitment market are always in need. While the industry remains important for employment, the economy and social development, the lack of skills to drain a recovering market threaten (Bahr and Laszig, 2021). The construction industry is one of the pillars of the UK economy. As we think back to hard helmets and a builder, the company spans a wide range of disciplines including architecture, civil engineering and even Laurence Llewelyn Bowen. Construction is an excellent indicator of how the economy as a whole is doing because of the high cost and risky side of the industry. The development of new projects is slowing in a weak economy and the recovered empire will see investment devaluation. Investments are currently on the rise. New real estate initiatives have resulted in a healthy sector with the longest growth since the last recession. Employer confidence has improved, so it’s a great time to work in construction, but skills shortages are a potential obstacle to further expansion.

According to the Department of Business, Innovation and Skills, the condition of an industry hit by the recession has had a significant impact on the number of new entrants to the profession. In the years 2013-2014, there were 8,000 students in the “construction, planning and construction environment”, a number that has been declining steadily for the past five years. The number of completed apprenticeships increased by more than 10,000 in the years 2008-2009, a decrease of 55 per cent compared to pre-recession figures (Stojanovska-Georgievska et al., 2021).

The UK population is ageing and the construction industry is expected to lose more skilled workers than any other company. The booming generation of children is nearing the end of their working lives and companies are very worried that younger workers will not be able to fill their shoes. About a fifth of construction workers are over 50, and 400,000 are over 55 to retire in the next decade. In addition, the increase in the number of employees over 60 is the largest for any age group in the industry, with the largest decrease among those under 30. While experience in all workplaces is crucial, trends show currently that the workforce is starting to attract because new employees are unable to meet the demand left by pension Professors (Torku et al., 2021).

The inevitable redundancies come with every recession and the construction sector is no exception. While skills may leave the sector in the short term, this may have long-term consequences as workers may not be available when the market improves. Construction work has changed in the last decade but reached its peak in 2007 with 2.3 million people. However, after the 2008 crisis, numbers fell sharply, with around 400,000 jobs lost due to a market crash in the late 2000s. Construction was one of the hardest-hit industries, with a large number of skilled workers leaving the UK to work in other countries (Flannery et al., 2021).

The research methodology used in this research is primary research in which the opinions of the different business analysts in the construction sector are analysed and the results are based on the data collected from the opinions of these people. Primary research is considered to be an efficient technique for research purposes. The researchers need to use the correct methodology for the research purposes so that effective results are made.

In this method, different numerical data is collected for the preparation and interpretation of the results. In this research, close-ended questions are asked in the questionnaire and different themes will be made. Quantitative data will help in analysing the depth of the research questions (Driscoll,  2011).

 In this research, data is collected from two different construction companies in the UK. The research data is collected by using a questionnaire as the research instrument. Many different types of research instruments can be used for gathering the data but a questionnaire is considered to be the most effective one and in this case, the use of a questionnaire is selected as face to face interviews require much protocol and additional requirements to be fulfilled. For face to face interviews, the researcher has to travel to a specific location whereas the questionnaire can be filled online and can be submitted any time. Moreover, this research demands quantitative data collection and it is very important to collect authentic data and this can be done by gathering the opinions of the people from the relevant field. Quantitative surveying is the best technique and it can be used for the development of the results (Pandey and Pandey, 2021).

The data collected from the questionnaire is analysed by using thematic analysis. Different themes will be made for analysing the data and based on these themes results will be evaluated. The data of the questionnaire will be analysed by using Spss for identifying the correlation between different themes. Data collection is very important for the research as based on the data collection, results and discussion for the research will be written. Data should be collected from authentic sources and primary research is considered to be the most authentic method for the research (Guest et al., 2020).

Sampling is the most important part of primary research. This research is based on gathering information from different people in the construction industry. The two main industries used in this research are Costain Group Plc and Homeserve Plc. Both these industries are located in England, UK. Employees who are working in these companies are the targeted population for the research purpose (Driscoll, 2011).

The sampling will be based on the name of the industry from which the participant is. It is expected to have 50% people from each of the companies to avoid any biasness.  

This type of sampling is based on the year of the experience of the participant in the construction company. This will show that the authenticity and validity of the opinion of the participant as experienced persons give more genuine and authentic opinions.  

Sampling based on gender is done to avoid any sort of biasness in the opinions. It is expected to have the opinion of the females and males equally so that the research could be free of biasness.

The sample size for the research should be chosen very carefully as the whole of the research is based on the opinion of the participants. The sample size chosen for the research is 100. fifty participants will be chosen from each of the companies to analyse the research questions.

The period for the research will be three months. This will be longitudinal research in which the research will be completed in a long time.

Ethical considerations are important for the research process and the researcher must focus on ethics while conducting the research. Following are some of the ethical considerations which are required for the research (Brittain et al., 2020).

This research will involve the two companies and their employees therefore it is important to take consent from the organisation to perform the research there. There are many different considerations that need to be taken care of while researching any organisation. The researcher should guarantee the organisation that none of the personal information will be used anywhere else. Consent of the organisation is an important factor to be considered while carrying out the research.

Consent of participants is very important for the researcher and every participant should be asked before conducting the research. If the participant is not willing to be a part of the research then the research should not force them for giving their opinion. A consent form should be designed and the participants should fill the consent form before they are recruited in the research process (Díaz et al., 2021).

The personal information of the participant should be kept safe and it should not be shared with any other person. The anonymity of the participant is very important and the researcher should not disclose the personal information of the person. The data of the participant should be protected.

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