In its document, The skills construction needs, the CITB assesses the skills gap in the construction industry and outlines what measures it is taking to address the challenges.
In its ‘Five Year Outlook (2023-2027)’ assessment document, ‘The skills construction needs’, the Construction Skills Network says demand for construction workers in the UK is still high despite economic uncertainty. The report states that although the UK economy is facing a recession in 2023, the construction industry still needs to recruit extra workers. “An increase of just under 45,000 per year is needed over the next five years to meet expected output,” it says.
The Skills Network report is a joint initiative of the CITB (Construction Industry Training Board) and data analytics, business services company Experian.
The outlook for construction
The report says that construction companies have faced significant input cost inflation from supply chain disruptions, high energy costs, and soaring wage bills caused by worker shortages but have still managed to perform better than expected, with estimated annual growth of around 4% during 2022.
But it adds that with GDP declining through 2023 and possibly into 2024, it is unlikely that construction will continue to out-perform the economy. The overall output growth rate will, as a result, average 1.5% per year between 2023 and 2027, a reduction on the 3.2% rate in the 2022-2026 outlook. The forecast has a decline in UK construction output for 2023 of -0.5%, with a return to growth in 2024 through to 2027, with the commercial, infrastructure and industrial sectors looking set to weather the downturn slightly better than new housing or housing repair and maintenance.
The recruitment challenge
Despite this relatively good news, the construction industry still has a long-term challenge in recruiting workers with high levels of job vacancies and low levels of unemployment likely to persist. “Recruiting and developing the workforce for the future remains vital to ensure the industry can contribute to growth, such as building the homes the country needs, the infrastructure for energy and transport and retrofitting the built environment to meet net zero targets,” says CITB chief executive Tim Balcon in his foreword to the report.
‘With vacancies set to remain high, it is important that construction companies make use of support to continue recruiting, training and developing the workforce needed for coming years. As the recession, high costs and interest rates bite, it is critical to ensure the industry doesn’t lose workers and continues to invest in skills for when the recovery is felt.”
The CITB says it is responding to these challenges by investing in apprenticeships, launching a range of initiatives and working collaboratively with the industry, to support it to have a skilled, competent, and inclusive workforce now and in the future.
“We have invested almost £50m of Levy to support over 22,000 apprentices, directly trained over 2,900 new recruits through the second phase of the Construction Skills Fund and supported over 16,000 learners with grants to complete their qualifications,” adds Tim Balcon. ‘Direct funding has been provided to over 1,600 businesses to invest in their workforce, with grants helping to fund over 269,000 training courses.
In total, £97m has been invested in grant funding by CITB, to make it as easy as possible for employers to recruit and retain their skilled workforce.’
In addition to recruiting new blood into the industry, the new recruits need to be trained so that they can hit the ground running. “Training is a vitally important area, says Tim. “We recognise that specialist training can be difficult for employers to access, and so have reattained and invested in National Construction College (NCC) sites, to help meet the industry’s training needs. By focusing our curriculum to respond to unmet demand, we are looking to build capacity for the industry, especially in areas such as access and plant. In the 2022/23 financial year to date, we have trained 4,400 people through our NCC sites, a 25% increase on last year.”
Developing existing workers is also crucial. The CITB says it continues to develop its leadership and management strategy and is offering a range of support to help develop and retain existing talent. “Our £10.5m Leadership and Management commission will provide funding for businesses of all sizes to claim money to invest in the development of their employees. Payments of between £2,500 and £50,000 are available.
“In response to concerns from employers that there was a lack of work-readiness among new entrants, in 2021 we launched Onsite Experience Hubs to bridge the gap between training and working,” says Tim. “There are now nine hubs across England and four in Wales creating a talent pipeline to meet the needs of local construction employers and to support construction career opportunities for people from local communities. The programme will result in 7,780 people becoming employment and site-ready with 3,350 people securing sustained employment within the next three years.
In addition, hubs in Wales are delivering onsite experiences to over 1,600 full-time Construction Diploma students to make them better equipped to enter employment on completion of their studies.”
Recognising the need for localised solutions, more than £800,000 has been invested to launch a new employer network pilot project, which could revolutionise the way the construction industry accesses and receives funding for training in the future. Over 3,800 levy-registered construction businesses are eligible to benefit from the pilot, offered across five locations in England, Scotland and Wales.
Meeting the challenge
It is clear that too few have been joining the construction industry. Competition from other sectors for workers is intense and skills shortages persist. There are further challenges from wider changes in the labour market such as an increase in flexible working, changing EU migration policy, the ageing workforce, increasing levels of inactivity, and consequent labour shortages across most industrial sectors.
While there has been an increase in demand for workers across all industries, particularly from the start of 2021, the demand for construction workers has remained at a higher level.
Vacancies in the construction industry returned to pre-pandemic levels at least six months earlier than all vacancies and remained at a higher level for nearly all of 2021 and 2022. Construction vacancies at the end of 2022 are still nearly twice as high as pre-pandemic levels indicating that in 2023, the industry will still be trying to recruit workers in a highly competitive labour market.
The CITB concludes that companies that can understand and meet what workers value the most are the ones most likely to be successful at attracting and retaining new staff. That could range from being able to offer long-term career opportunities with support to help development, through to good levels of pay, flexible working to have a positive work/life balance and creating a culture of fairness, inclusion, and respect.
The CITB says there has been a significant increase in apprenticeship starts during the 2021/2022 academic year across all the home nations.
“In the 2022-2026 Outlook we estimated that apprenticeship starts would return back to pre-pandemic levels, however, in 2021/2022 there has been over 37,000 starts on construction apprenticeships. This is more than a 30% increase on 2020/2021 numbers and 15% up on starts in 2018/2019.”
CITB says it is is looking at a range of actions that will help to support construction companies to invest in training by helping to protect apprenticeships, using targeted funding for skills priorities, helping businesses to identify training needs and ensuring that standards are in place for the required training.
“The next 18 months won’t be easy, however, I remain inspired by the construction industry’s resilience shown during the pandemic and throughout 2022,” concludes Tim Balcon. “I take heart from the long-term picture, and I am confident that the range of skills initiatives CITB introduced in the last 12 months will help employers and new entrants across the UK.”