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Friday, September 18, 2015
Our members are, quite rightly, feeling buoyant thanks to a surge in orders and much better future business prospects. However, there are a couple of clouds on the horizon that can't be ignored.
The results of the latest B&ES State of Trade Survey showed that the ‘net optimism measure’ has risen to 45% (up from 39% six months ago). Members in all parts of the country and of every size and specialism are feeling more positive about their future business prospects.
They also should be congratulated for stepping up training and recruitment activities, including taking on more apprentices because this is crucial if we are to take full advantage of the growing market and improving economic picture.
However, efforts to address skills shortages and improve productivity must go further and faster in the coming months. Profitability is also under threat from soaring and unsustainable labour costs that must come as a ‘reality check’ to the overall mood of optimism.
Employers must also resist the temptation to take the easy option of cherry picking the best staff from competitors in order to resource projects.
It is clear that companies are casting around desperately looking for skilled staff and it is not uncommon for whole project management teams to be head-hunted from one contractor to another, but that doesn’t solve the underlying problem.
While it is fitting that our most skilled people are getting the recognition and financial rewards they deserve; we do need to focus heavily on increasing the numbers of skilled people available and also on equipping our workforce with the new skills required by the modern construction market.
Directly employed skilled labour from within the supply chain is the ideal solution, but employment agencies, who support investment in training, will also play their part.
Improving on site productivity is a complex issue, but it must include better co-ordination of the supply chain so that people can operate more effectively. That means delivering materials to site on time; providing accurate design drawings; and helping firms throughout the supply chain to use productivity tools like Building Information Modelling (BIM), which also makes it possible to prefabricate elements of the build off-site.
Contractors, generally, face a wider skills challenge than following previous recessions.
Technology is transforming construction. Our work now sits at the heart of the Big Data age with some of the world’s biggest companies – Apple, Google, IBM etc. – spending millions on technologies specifically aimed at improving the operation of buildings. We need to make sure we are fully engaged at that end of the project chain and have the skills to keep pace.
A recent survey carried out by the CBI showed that 73% of contractors find it difficult to recruit the ‘higher skilled’ staff they need to keep up with growing demand for quality buildings. The CBI was also concerned the government’s approach to apprenticeships would not deliver the high-quality, business-relevant training needed – possibly because they are falling into the trap of playing a numbers game rather than focussing on appropriate, quality skills.
Deputy director general Katja Hall said the government had set out its stall “to create a high-skilled economy”, but that companies had a pressing “skills emergency now, threatening to starve economic growth”. She added that it was the “high-growth, high-value sectors with the most potential [that are] under most pressure…including construction”.
From a building engineering services perspective, that has to mean putting the right people into the right jobs and equipping them with the tools they need to work to the best of their ability. This is a huge supply chain challenge because it also depends on people working collaboratively to ensure information is shared and projects are well co-ordinated.
The government also has to play its part if it wants to see its infrastructure targets met and its housing and commercial building standards reached. It has to help the industry by marketing engineering and supporting employers to invest in apprenticeships so we can attract the high calibre individuals we need.
Employers in our sector have had a tough decade and are still nervous about investing in people if they are uncertain about what the future holds. The government can bridge the gap by providing financial support to encourage employers to take on young people now so they are trained and, therefore, self-sustaining by the time future projects are up and running.
The flow of work is clearly there; it is how we manage our skilled resource to meet demand that matters now.
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