Skills crisis: Facing up to the numbers

22 February 2017

The figures relating to the construction skills gap are worrying enough, but if migrant workers are lost in a 'hard' Brexit, the situation is serious indeed, says James Bryce.

James Bryce

UK construction must recruit more than 400,000 people each and every year between now and 2021 if it is to create the homes and infrastructure the nation needs, according to the latest report from Arcadis.

Failure to address the skills gap could even result in the earnings of some tradespeople sky-rocketing inside a generation, leading to the rise of the “Minted” workforce – the Most in Need Trades Earning Double.

To measure the true extent of the skills crisis across the infrastructure and house building workforce, Arcadis has developed a “Talent Scale”.

In house building alone, the scale shows that if the UK is to increase output to 270,000 new homes over the next five years, it will need to employ in excess of 370,000 new people. Meanwhile, when it comes to meeting forecast national infrastructure requirements, an additional 36,500 people will need to be employed every year.

In terms of individual skills, the greatest need is for carpenters and joiners, where demand accounts for nearly a sixth of all national resource requirements. Plumbers, electricians, and bricklayers are also in high demand, particularly in the labour-intensive house building sector. Meanwhile, the report identifies a need for more than 7,400 civil engineers and 7,300 quantity surveyors.

London and the south east will need to employ more people than any other part of the UK, accounting for nearly 30% of total demand (110,000 people). With major national infrastructure programmes such as HS2 and Crossrail 2 already in the pipeline, it is expected that companies will need to draw heavily on the common talent pool of transferable skills if delivery targets are to be achieved.

Net loss of EU workers to house building and infrastructure to 2020

*Based on assumed 2016 house building and infrastructure workforce of 1.5m

Outside of London and the south east, the highest skills requirement is in the East of England and the south west, where more than 43,000 and 41,000 additional workers respectively are needed to meet projected regional housing and infrastructure requirements. At the bottom of the table is Northern Ireland, where employment demand accounts for just 3% of the national total.

These figures are independent of the impact of any eventual Brexit deal, which is likely to further increase the strain. In the event of a “hard” Brexit scenario – for instance, extending the points-based system currently in place for non-EU migrants – the number of EU construction workers entering the UK could fall at the rate of attrition.

If this were to play out, 215,000 fewer people from the EU would enter the infrastructure and house building sectors between now and 2020, further exacerbating the existing labour shortage.

What we have is not a skills gap – it is a skills gulf. Systemic underinvestment in the nation’s workforce has contributed to a reduction in UK productivity. Construction employment is already down 15% on 2008 and, quite simply, if we don’t have the right people to build the homes and infrastructure we need, the UK is going to struggle to maintain its competitive position in the global economy.

However, overcoming a skills shortfall as vast as the one we now face can’t be achieved through education and technology alone. Of course, we need to bring more new talent into the industry but, in the short term, construction will also need to look at those currently working in other industries and dramatically improve its efficiency.

On top of this, as part of any Brexit deal, the government can help by looking to secure the rights of EU workers currently operating in UK construction, simplifying the visa system and minimising the tax burden on workers and business. If this fails to happen, many of the projects that the government has earmarked for economic stimulus could prove more difficult and costly to resource. In the worst case scenario these projects could fail to be delivered at all, reducing our ability to grow the economy and limiting investment in the industry.

James Bryce is director of strategic workforce planning at Arcadis

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