The market-driven skills pipeline isn’t delivering

Sean Tompkins, chief executive of RICS, says the industry needs a Construction Skills Investment Charter to future-proof its skills pipeline. 

Judging by the research produced by a number of leading construction organisations, the UK industry has a lot to be positive about as it heads into 2015. In fact, RICS’ own Construction Market Survey reflects this positive outlook and shows that a lot of the growth the industry is currently experiencing is down to the pick-up in the private housing and the commercial construction sectors – these both growing at a rate not seen since 1994.

As we recover from an unprecedented recession, everyone seems to be in good spirits with confidence returning to the sector as a result of a surge in UK housing demand, and the government’s commitment to investing £36bn in more than 200 infrastructure projects.

However, even though the predictions for growth over the next year are positive, we should take a step back and look at the longer term picture. As highlighted in the same RICS report, many contractors in the industry feel that their further expansion is being held back by a shortage of skills available to them. In fact, a staggering 59% of respondents cited a shortage of quantity surveyors as a major barrier to further growth.

Furthermore, skills shortages aren’t only restricted to the surveying industry as many have also cited that a skills shortage in the traditional trades like bricklaying could hinder their organisation’s expansion in the long term.

With this in mind, we can deduce that the recovery in construction will only last as long as there are the people skilled enough to undertake and deliver projects. Without them, the UK industry will stagnate and return to the sluggish growth seen in the not-too-distant past.

According to RICS data, the cumulative effects of the worldwide recession resulted in some 350,000 people exiting the UK construction sector. With demand for new projects currently on an upward trend, this means we have a long way to go to produce the right workforce.

To remedy this industry-wide problem, contractors, consultants, government and industry stakeholders need to see this period of growth as an opportunity to look at how the skills pipeline delivering the talent of tomorrow can be adjusted to provide the quantity and quality of people needed.

As a first step, we need to look at how the current skills pipeline operates. At the moment the skills shortage is symptomatic of a market-driven skills pipeline – one which follows the simple rules of demand and supply. Unfortunately, this model isn’t always flexible enough when applied to the ever-changing skills demands of our industry. Its main drawback is that it doesn’t account for the time lag that exists between an increase in demand and the time it takes to train and supply the skills needed. When applied to the current situation, we find that a reluctance to train people in the years of recession has led to the industry being caught short in the upturn.

Taking this into account, we need to ensure that the pipeline is future-proofed and made more flexible when it comes to market demand for skills. By doing this we can ensure the industry has the headroom to grow year-on-year – bringing new employment opportunities and social benefits for all UK regions. Building this kind of pipeline will ensure that the UK maintains its competitive position in the global professional services market for construction and infrastructure.

One way of ensuring the UK skills pipeline is made more flexible is by introducing a Construction Skills Investment Charter. This is an idea that RICS has explored in its recently published Property in Politics report, and something it is calling on a future government to commit to.

The basic premise of the Charter is for grants and tax incentives to be outlined more clearly to industry contractors who employ and train new talent in the construction industry. This could include the reduction of national insurance contributions for the training of new employees and tax relief for those firms investing locally in construction colleges, academies and school programmes.

It is hoped that the implementation of the Construction Skills Investment Charter will help to change attitudes in the industry towards skills development and incentivise employers to take action. With more employers engaged in training the next generation of construction workers, we hope that the “boom and bust” nature of the current skills pipeline can be made a thing of the past.

To find out more about RICS’ Property in Politics report please visit: http://www.rics.org/uk/footer/property-in-politics/