Following the publication of the Farmer Review, ‘Modernise or Die – Time to decide the industry’s future’, it is widely recognised that we are facing a shortfall in construction labour.
If we consider the industry’s current workforce size and demographic, the scale of the problem presents a ‘ticking time bomb’… but the clock is still ticking so it’s not too late yet! Following the publication of the Farmer Review, ‘Modernise or Die – Time to decide the industry’s future’, it is widely recognised that we are facing a shortfall in construction labour. If we consider the industry’s current workforce size and demographic, the scale of the problem presents a ‘ticking time bomb’… but the clock is still ticking so it’s not too late yet!
In February 2016 the government and the Construction Leadership Council (CLC) commissioned a review in response to concerns that productivity and capacity in the construction sector are undermined by its reliance on subcontracted labour, and low levels of investment in skills and innovation.
This resulted in the publication of the Farmer Review of The UK Construction Labour Model published in October 2016 titled ‘Modernise or Die – Time to decide the industry’s future’.
One of the key conclusions of the report is that the erosion of the workforce size is set to be intensified by an aging labour force and low levels of new entrants, which is simply unsustainable.
The Aging Workforce
The Farmer Report concludes that based purely on existing workforce age and current levels of new entrant attraction, we could see a 20-25% decline in the available labour force within a decade.
This decline is primarily due to older workers retiring and when combined with the lower levels of next generation coming into the industry, the replacement demand outweighs the expansion demand.
The adjacent table is based on 2017 Office for National Statistics (ONS) employment and labour marked data demonstrates that 31% of the workforce (based on Apr-June 2017 figures) is aged over 50.
The Response – Apprenticeships
One form of response is the government’s apprenticeship levy, introduced in April earlier this year. This will raise almost £3bn of funds annually and the government has a target to start three million apprenticeships by 2020.
The principles of the levy are straightforward with UK businesses making mandatory contributions to help fund the training needs of their own sector.
The term ‘apprenticeship’ covers a wide range of training from trade skills to Masters degrees and eligible funding ranges from £2,000 to £27,000 per apprentice depending on the duration and level of training.
With construction employing almost 10% of the UK workforce, this has the potential to provide significant support to the aging profile of the construction industry.
It’s all about….Timing
What will be equally important is that as an industry, we embrace the window of opportunity we have available to draw upon the experienced workforce over the next five – ten years.
Whether this is achieved through mentoring programmes or through on-the-job training, by creating teams and project teams of varying experience levels we can help balance continued learning with practical experience for new entrants.
This will also provide a platform for the older 31% of the workforce to impart their knowledge and skills to develop and improve the construction industry workforce as a whole.
The long term advantages of increasing new entrants to the industry and developing a well trained workforce will be of great benefit to individual organisations and the construction industry, but it will take a commitment from all ages and experience levels to make it happen.
For more information please contact Michael Anderson, Partner, on 01702 548 449 or firstname.lastname@example.org