The construction skills shortage in statistics

At the end of 2020, the total number of people in the UK working in construction fell to its lowest level in more than 20 years. No wonder there is talk of a skills shortage in construction.

Research group Statista reported that, in the fourth quarter of 2020, around 2 million people were employed across the sector, compared with a 20-year peak of 2.6 million in the third quarter of 2008.

Yet looking at numbers in isolation doesn’t give a full picture of the workforce crisis. Consider that construction jobs slumped between 2008 and early 2013 in part because of the financial crisis that hammered industry employment.

And while numbers rose from 2013 onwards—to a peak of 2.4 million at the start of 2019—they fell again thereafter, in part because workers from the EU returned to their home countries. Indeed, in 2020 the number of EU-born construction workers active in the UK fell 42%, compared with a 4% decline among those born here.

The numbers have slowly crept up again, passing the 2.2 million mark in the first half of 2022—a figure last seen in 2014—but there is growing concern around how the construction sector is going to meet the demand for new homes, infrastructure projects and other schemes with such a shortfall in the number of workers.

Structural challenges facing the construction industry

COVID-19 battered the UK sector in 2020 and 2021, yet the industry has often struggled with economic headwinds, and cyclical shortages of staff in the construction sector have been with us for some time.

In 2016, Mark Farmer, founder of the Cast Consultancy and a vocal advocate for the construction sector for a number of years, wrote a report titled, “The Farmer Report of the UK Construction Labour Model,” in which he spelled out the challenges facing the sector.

Subtitled “Modernise or Die: Time to Decide the Industry’s Future,” Farmer’s review highlighted the industry’s low productivity, its workforce demographic issues, a lack of research and development and investment in innovation, issues around providing training and the industry’s poor image.

Calling for radical action to tackle what he saw as systemic problems across the sector, Farmer warned that a ticking “time bomb” was the industry’s workforce size and demographic. “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,” Farmer’s report argued.

The ageing workforce is often cited as a contributing factor behind the skills shortage in construction. According to a report by the Chartered Institute of Building (CIOB), “The Impact of the Ageing Population on the Construction Industry,” the total number of workers aged 60-plus has increased more than any other age group in recent years, while the biggest reduction was in workers under age 30.

“The likely impact is as clear,” the CIOB said in its report, “as it is worrying: a great deal of knowledge and many vital skills are about to be lost and fewer professionals are in line to replace either.”

How are UK companies closing the construction skills gap?

Attracting new talent

This construction industry skills shortage is being addressed in part by a number of initiatives aimed at attracting more young people to the sector. As well as government-backed apprenticeships—covering everything from bricklaying to becoming an architect—there are efforts to get youngsters engaged with the industry through T-levels, a qualification aimed at people aged 16 and older who don’t want to go on to do A-levels or an apprenticeship, but who still want to combine classroom education with on-the-job work experience.

While there’s hope that such initiatives will help arrest the decline in construction as a career choice, the sector meanwhile has to cope with fewer workers. The shortage, according to a Construction Skills Network (CSN) report published earlier this year, is unlikely to improve anytime soon.

Noting that the industry will need an additional 266,000 workers by 2026, the report published by the Construction Industry Training Board (CITB) argues that the greatest challenge UK construction faces over the next five years is recruiting people to fill the growing number of vacancies.

“Employers will need to refresh the way they recruit staff,” the report said. “Employing fully skilled workers is unlikely to meet the expected shortfall because, to put it bluntly, the workers aren’t available; they have left industry through retirement, emigration or choice.”

The CSN calls on the industry to consider entrants “from a variety of nontraditional sources, including adult re-skillers.” And the route from further education into a construction career, the report added, should be made easier to develop domestic talent.

Engaging with education

Individual companies have their own views on how the skills shortage in construction might be tackled. Contracting giant Balfour Beatty argues that local areas should be able to grow their own talent. “To be most effective, local authorities need to be given both greater responsibility and more resource to address skills need in their areas,” according to the firm.

Balfour Beatty also believes that employers “need to engage more closely with the education system, building relationships and ensuring that schools, further education colleges and independent training providers are delivering the necessary skills.”

The industry certainly needs to get better at attracting more people to work in the sector. Ideally it will do this as part of a collaborative approach with government, industry bodies and others, such as schools, colleges and universities.

In “Modernise or Die,” Farmer laments what he calls the lack of a single, joined up strategy around training, one “that will drive collective transformational change and reflect the needs of the industry as a whole, not just silos within it.”

On the positive side, Farmer said he had seen “evidence of some interesting and high opportunity activity in the field of trade and professional re-training and re-skilling which has rightly been supported and embraced by industry.” Such initiatives include ex-armed forces training programmes and initiatives looking to target workers from declining industries, he added.

Are modern methods the answer?

Meanwhile, the increased deployment of modern methods of construction (MMC), including greater use of off-site manufacturing and modular or volumetric techniques, could go some way to improving, or at least alleviating, the skills shortage.

The CITB suggested in 2019 that an uptake of MMC “can influence future workforce requirements and help to mitigate some of the occupational demand pressure.”

What impact the latest political and economic developments will have on UK construction remains to be seen. The new chancellor of the exchequer, Jeremy Hunt, warned that all UK government departments would have to cut their budgets, a scenario likely to impact infrastructure schemes across the country.

Against this background, the construction industry still needs more people to design, engineer, build, fit out and sign-off the new homes, offices and commercial space that people and businesses need, along with the infrastructure we as a society rely on.

Root and branch reform of the way the industry operates, like that spelled out by Farmer and others, might be the only way forward to close the construction skills gap.