One subject came up time and time again at the CIOB’s Inspiring the Future conference last November: the construction industry’s looming skills crisis. Nothing has changed in the interim: a recent report by KPMG for the London Chamber of Commerce found that 20% more trained workers will be needed to build the £96bn of infrastructure that London and the south east will require in the next two years. The crunch may come as soon as April next year.
So what is to be done? KPMG recommends making training a requirement for Tier 1 contractors bidding for public contracts. This is not a new idea, but even if it were implemented, the structure of the industry means its effects may be limited.
“I am not sure what the solution is. In all probability we will overcome the crisis as we have always done, by importing skilled labour from abroad.”
Some 93% of workers are employed by firms with fewer than 10 staff, and the industry’s business model is based on subcontracting, which means nobody has much security. Trainees can’t be sure they’ll get the quality of courses they need, or that they’ll be able to complete them. Employers worry about the cost of taking on a beginner and funding them as they slowly become productive. And at the end of it, is the trainee really skilled or just less unskilled? And how long will it be before they get a job with someone else?
In industries such as aerospace, the value of the output is high, so the relative cost of training is lower and the skills gained more valuable. Also, the industry is more stable, so firms can be confident that the workers will stay.
I am not sure what the solution is. In all probability we will overcome the crisis as we have always done, by importing skilled labour from abroad. Service industries such as hospitality and retail also prefer to employ low-cost migrants, so it is not surprising that the CBI told the prime minister to back off the migration issue. Migration keeps pay rates down and that’s good for businesses.
For construction, the savings from the lower cost workforce more than compensates for the inconvenience of paying the CITB levy. But the low take-up of the funds raised by that levy is testament to employers’ lack of appetite for training.
The current boom masks some fundamental structural problems for the industry, and these are problems for the industry to resolve, not the government – a view strongly endorsed by Sir John Armitt at Inspiring the Future. But how?
