In April 2017, Willis Towers Watson released its Construction Risk Index, a boardroom view of the industry as seen by 350 senior executives.
The Index gives a deep look into the concerns and expectations of construction leaders and highlights the most significant megatrends that will shape the future of the industry. Article by John Roberts UK Construction Industry Leader.
According to construction executives, risks under the megatrend ‘workforce management and talent optimisation’ are the second biggest threat facing their business over the next 10 years. This article explores the labour shortage within the UK construction industry, highlighting how businesses will need to rethink their talent strategies and attract younger workers in order to survive.
The UK construction industry faces a number of workforce difficulties: competition for labour, increasing needs for digital skills, high retirement figures and disparate employee networks. These concerns were captured in the results of our Construction Risk Index, where construction executives rated ‘limited workforce diversity’, ‘difficulty in attracting and retaining key talent’ and ‘shortage of qualified, experienced staff’ as the top three risks related to workforce management and talent optimisation.
What is causing the labour shortage in the UK construction industry? Firstly, the most recent industry figures estimate that 700,000 workers will retire over the next 10 years, putting pressure on employers to keep up with an increasingly demanding workload. Secondly, the Royal Institution of Chartered Surveyors predicts that the industry could lose as many as 200,000 EU employees, who make up 8% of the workforce, post-Brexit should the government decide to pull out of the single market.
Arguably the biggest threat to the future of the industry, however, is that construction is saddled with certain preconceptions that have led to a lack of interest from the next generation of workers. A recent UK government construction report found that the industry has a low job appeal for millennials and that construction work is not as favourably viewed compared to other industries such as technology and finance. This theme was similarly captured as we learnt more from senior leaders of UK construction companies.
During interviews conducted for the Index, it was suggested that the real challenge over the coming years will be to change attitudes of construction from a conservative and out-dated industry to a dynamic and progressive place to work. As one CEO commented, “it has the lowest R&D of any sector and is probably one of the lowest investors in skills, too.” Modernising talent strategies to align with new career preferences will clearly become vital if industry players want to win the war on talent and attract a new generation of experienced labour.
Why is construction work not appealing to the young? Contributing factors include a lack of employee development initiatives, low diversity in the workforce and poor job security. Willis Towers Watson’s Global Workforce Study 2016 found that only 49% of construction employees agree that their company supports diversity in the workplace, compared to 63% for all industries. This was reflected in the Index results, with limited workforce diversity the biggest risk in the megatrend related to workforce management and talent optimisation. It’s no surprise, given only 11% of the construction workforce are female, dropping to 1% for workers on site. With millennials placing inclusion and diversity high on the priority list for prospective employers, the UK construction industry needs to be more creative in the approach to talent selection.
As a first-step solution, several construction leaders commented on how the role of both the UK government and industry institutions will become increasingly important in promoting construction work to millennials. Existing initiatives exist, including ‘Go Construct’, which aims to attract, inform and retain a skilled workforce for the Construction and Built Environment sector. Similarly, one of our interviewees discussed his company’s participation in the 5% Club, an employer-led scheme focused on addressing youth unemployment. With many industry bodies calling on the government to invest in training and skills, these schemes will become invaluable to changing attitudes. Internally, construction companies should be looking to align their working practices to demographic shifts if they want to entice future workers. Key will be to invest heavily in training and reward programs, ensuring that career development initiatives are embedded in to company culture.
One way the industry is already making strides is through technological progress. Embracing digitalisation will lead to a wider array of roles that are likely to be more appealing to future workers, as younger generations are increasingly engaged with technology and most have the necessary digital skills. Concurrence was seen from senior leaders interviewed in our Index, “the more technology you have, the more millennials you can attract”, was the opinion of one construction CEO, who went on to say “technology is making this an exciting place to work and we are capturing the imagination of young people.” Technology is not just a way to streamline operations but will be a key driver in changing the perception of the construction industry into a modern and forward thinking place to work.
It has never been more important for the UK construction industry to adapt working practices to be in line with the changing preferences of younger job seekers. Over the next few years the labour shortage will become more acute, demanding senior leaders to embrace new talent strategies, with fresh approaches to recruitment and incentive programs. As the construction industry becomes ‘smarter’, companies may have to play on the same level field as non-construction industries if they want to attract the right talent away from these other professions who are popular with millennials. Even with pressure on the UK government to act on the skills shortage, the winners of the war on talent will be those who are actively working to attract younger generations into what can be an exciting and varied career in construction.