Hiring intentions in the construction sector are due to fall in the coming months, according to our survey of 2,100+ UK employers. Confidence has fallen from +11 in Q2 2019, to just +5 for the upcoming quarter.
It’s hardly surprising that one of the key reasons for this fall in hiring intentions is Brexit. 7% of workers in the construction industry are estimated to be EU nationals. And in London, the figure is even higher -28% of construction workers are estimated to be EU nationals and a further 7% are non-EU nationals. Clearly, any legislative changes which hinder the free movement of talent from outside the UK will have a substantial impact on the construction sector.
But it’s not just changes to the movement of people that could impact the sector. According to Build UK, £10 billion construction products are imported from the EU every year. A no-deal Brexit, a weaker pound, or tighter border controls could have a debilitating impact on the movement of goods and materials – hampering Government efforts to build 300,000 new homes every year.
Nonetheless, while our research has shown that hiring intentions have fallen, employers aren’t going to stop recruiting entirely. They do still plan to grow the size of their workforce – just at a slower pace than the last few months. Having said that, extensive skill shortages mean that recruiting these additional workers is going to be far from an easy task.
Contractors Vs. Permanent Workers
It’s reported that one-fifth of jobs in the construction sector cannot be adequately or permanently filled, because employers cannot recruit staff with the right skills, qualifications or experience. At the same time, according to the Chartered Institute of Building, the industry will need to employ over 150,000 new workers by 2021 to be able to keep up with current demand.
As a result, over the years, the sector has increasingly relied on it’s contractor base to get work done. Around 30-40% of the construction industry is estimated to be self-employed, and it’s often regarded as the best way for workers to get flexibility and earn premium rates.
But with Brexit causing so much uncertainty across the industry, employers are keen to get as much stability across their organisation as possible. As a result, many firms are looking to rebalance their workforce, and make greater investments in permanent workers – individuals that can take on longer-term projects and improve the long-term health of the business.
Investment In The Talent Pipeline
While construction firms may plan on growing their permanent workforce, their efforts may also be hampered by the industry’s ageing workforce. According to The Federation of Master Builders, 20% of tradespeople are in their fifties, while 15% are in their sixties. As these workers near retirement age, there simply are not enough young people joining the industry to replace them.
Over the last few years, employers haven’t necessarily invested enough in graduate and apprenticeship schemes to build an effective talent pipeline. The introduction of the Apprenticeship Levy aimed to encourage greater investment in these schemes, but many SMEs are yet to take advantage of it.
Even if they were to invest in these schemes, there’s an image perception issue which may still discourage young people from participating. Many people continue to view the sector as an unattractive place to work, and don’t appreciate the full suite of professional and worthwhile career opportunities that are on offer.
As a result, organisations need to think more creatively than ever before about how they attract talent to the sector, if they want to build the permanent workforce that will help them to weather the Brexit storm. This is where a recruitment provider like ManpowerGroup Solutions can help. We help organisations to rethink how they manage talent and resources – so they can engage with the right person, in the right way, at the right time.
Working across the entirety of the construction and built environment sector, we help employers to harness emerging talent sources and utilise new employment models, while making sure their recruitment processes are cost effective, productive and efficient at all stages. Our Recruitment Process Outsourcing offering allows companies to get greater predictability of cost, a more efficient recruitment process, an improved candidate experience and improved talent quality across your permanent hiring. While our Managed Service Programmes focus on optimising processes, enhancing performance, and drive productivity improvements across your contingent workforce – including contractors, suppliers of contingent and staffing services, statements of work, and worker tracking processes.
If you’d like to learn more about the ways in which our Solutions can help your company recruit the talent it needs, please visit the ManpowerGroup Solutions website.