The 2018 shortage of construction workers in the UK
Labour is a key component of the construction industry. Despite various government initiatives to stimulate the economy through greater investment in infrastructure and the housing market the success of these policies rests with the people that will bring them to life.
Construction projects are fixed-term in nature. Therefore employers always need to hire extra workers to get projects completed on time and on budget. The number of skilled construction workers in the UK has reached a record low in 2018. If this trend continues with companies unable to source sufficient numbers of workers they could be forced to downscale, turn down projects and/or pass on the extra cost to the customer.
The price of the skills gap
Federation of Master Builders (FMB) research has found that the demand for skilled plumbers, electricians, plasterers and in particular bricklayers is exceeding supply of workers with these skills. Skilled bricklayers form (if you pardon the pun) the foundation of any construction project; accordingly, government plans to build around 300,000 new homes annually in England seems optimistic with the current workforce. Meanwhile, fears of further reductions in the number of UK workers following Brexit make matters worse. And as a result of the worker shortage, wages for skilled tradespeople are rising. Combine this with increases in the cost of materials and construction companies aren’t faring well – have a look at Carrilion…
The current climate may be good for construction workers and grafters looking for work. But the financial health and stability of the companies they work for, and the UK economy as a whole, is in all of our interests in the long-term.
The construction sector played an important role in the recovery of the British economy following the early 2000 recession. The current skills gap could have an adverse impact on the wider UK economy today, so we hope action is taken to address it.
Shortage of seasonal workers
It’s not just the construction industry that’s struggling to find labour workers. Seasonal workers are crucial to ensure year on year profit for food and agricultural companies. It isn’t cost effective to pay the number of workers needed to harvest crops all year due to seasonal fluctuations in crop activity. But when crops need to be harvested and picked, a larger workforce is required.
Previously, organisations like Concordia have supplied around 10,000 foreign workers to 200 farms in the UK every year. Now almost a third of English Apples and Pears Limited members are scaling back their businesses as a result of a shortage in workers in these industries. Why is this happening?
Some blame Brexit whilst others put it down to the fact that unemployment in countries like Romania is falling very rapidly. As well as this, many workers from eastern Europe are moving on to jobs in other sectors which offer full-time work or to countries such as Germany. Since a full-time job in your own country or closer to home is more attractive than a seasonal job in another country, the amount of seasonal labour gained in the UK from within the EU is reducing.
The problem extends from fruit picking to the food manufacturing sector. 71% of labour providers have indicated that they will struggle to meet the labour demands of the food manufacturing sector this year. Plus, in September 2017 the National Farmers’ Union said there was a 30% staff shortfall.
As a result, agricultural companies have crops in the ground that they’re not confident will be picked. Given current levels of waste in the UK, this is a depressing thought with a knock on effect on prices.
The importance of the CITB
CITB’s levy and grants system helps to ensure that the UK construction industry has the skilled workforce that it needs. The levy payments collected from construction sector employers are invested back into the industry through training.
- Employers pay 0.5% of any wage bill over £3 million into the government’s new apprenticeship service, to pay for apprenticeship course fees.
- Employers paying the apprenticeship levy will be able to access the funds they have paid for the cost of apprentice training through a new digital account. The government tops up this amount by an additional 10%.
- Companies with wage bills of less than £3m pay 10% of training costs directly to the provider, the government pay the remaining 90%.
- The government provides all funding for training of 16- to 18-year-old apprentices if a company has sub 50 employees.
The CITB has recently launched a new programme to highlight innovative new ways to encourage workers into the construction industry and upskill the existing base. We hope Grafter can play our part in promoting cross industry skills transference and social mobility and provide the essential ingredient of bringing together businesses with workers.
What does the worker shortage mean for businesses?
Historically small and medium-sized enterprises (SMEs) have trained around two thirds of the country’s building sector workforce. These SMEs are concerned about their ability to hire talented young workers if the government’s proposals to overhaul apprenticeship funding arrangements are implemented.
With increased competition from other sectors with higher rates of pay and better working conditions the construction sector will need to call upon areas not traditionally associated with construction. Ex-military is a strong source but beyond that ex-offenders, women and the long term unemployed will need to be lured into the sector to meet the increasing shortfall.
The challenge of finding reliable workers is difficult now and will only get harder in the coming years but using the power of technology is one way this issue can be resolved.
Grafter is a blue-collar digital network that has been created to connect businesses with workers for short-term, project and seasonal roles. Access to a readily available source of labour is essential in any construction project. This is why a reliable network of blue-collar workers is invaluable for businesses across the construction sector.