Construction Industry Grapples with Workforce Shortfall

Construction firms faced with labour problems have been advised to follow a plan to address their recruitment, skill and labour problems.

In the UK a report from the British Chambers of Commerce (BCC) Insights Unit details the extent of the problem. The BCC’s Quarterly Recruitment Outlook survey, which gathered insights from over 4,700 firms worldwide, shows the UK construction and engineering sectors are experiencing severe recruitment issues.

The report shows that 82% of the construction and engineering sectors report difficulties, up from 69% in Q1. Other industries, including transport and logistics (79%) and production and manufacturing (77%), are also experiencing heightened recruitment pressures.

It is not just the UK construction industry that is experiencing recruitment problems; it’s a similar story across Europe and the US.

As businesses worldwide grapple with these workforce challenges, the need for innovative solutions and strategic partnerships between employers, training providers and policymakers is accelerating. 

Why is the construction industry facing labour shortages and skill gaps?

Labour shortages across the world are seriously impacting construction project timelines, costs and overall sector growth. 

In the US, a report from the Associated Builders and Contractors (ABC), the national construction industry trade association, highlights the severity of this issue, showing that there is currently a staggering 459,000 job openings in the industry, marking the highest level of unfilled construction positions since 2022.

This labour crunch stems from several interconnected factors. Firstly, there's a notable generational shift occurring within the workforce. As experienced workers retire, taking with them valuable skills and knowledge, there's a dearth of young talent to fill the void. 

Yet construction companies including multinational, Laing O'Rourke, has acknowledged this challenge, and in response has established a technical college to train workers in modern methods of construction. Skanska, meanwhile, is partnering with schools and universities to promote construction careers.

One problem the industry faces is that there is a perception among younger generations that construction careers are physically demanding and lacking in career progression, deterring potential recruits. 

This image issue is compounded by the sector's steady adoption of new technologies, causing speculation for younger generations that are more accustomed and expectant to utilising technology.

Furthermore, the industry is experiencing increased project complexity and demand, necessitating a more skilled workforce. This mismatch between required skills and available talent is forcing businesses to outsource.

How can the construction industry tackle labour shortages and skill gaps?

To address these challenges, the industry is implementing various strategies. 

Deborah Blackhurst, Founder and Director of Strategic Resourcing, the construction recruitment company, offers approaches for businesses to consider, including:

Investing in training and upskilling: construction firms should prioritise comprehensive training programs to develop existing workers' skills and prepare them for evolving industry needs. 
This includes embracing new technologies, sustainable building practices, and advanced project management techniques. Partnering with educational institutions to create tailored curricula can ensure a steady pipeline of skilled workers.
Embracing this adaptation, Balfour Beatty, the construction company, is investing US$5.1mn annually in apprenticeship and graduate programmes.

Embracing technology and automation: adopting cutting-edge technologies like Building Information Modeling (BIM), drones, and robotics, can help offset labour shortages by increasing efficiency and reducing reliance on manual labour. 
AECOM, the infrastructure consultancy firm, is implementing advanced technologies to increase productivity and reduce labour needs.
This approach not only addresses immediate workforce gaps but also attracts tech-savvy younger generations to the industry.

Improving industry image and outreach: the construction sector must work to change perceptions, highlighting career opportunities, innovation, and the industry's crucial role in shaping communities. 
Targeted marketing campaigns, school outreach programs, and partnerships with influencers can help attract diverse talent pools, including women and minorities. Bouygues UK, another leading construction company, collaborates with organisations like Women into Construction to inspire the next generation.

Enhancing working conditions and benefits: offering competitive salaries, comprehensive benefits packages, and improved work-life balance can help retain existing workers and attract new talent. 
This includes addressing safety concerns, providing mental health support and offering flexible working arrangements where possible.

Leveraging global talent pools: in an interconnected world, construction companies should explore international recruitment to fill skill gaps. 
This may involve navigating visa processes and providing relocation support, but it can bring valuable expertise and diverse perspectives to projects.

Fostering apprenticeship and mentorship programs: structured apprenticeship programs can provide a clear career path for newcomers, while mentorship initiatives can help transfer knowledge from experienced workers to the next generation. 
These programs can significantly improve retention rates and skill development.

Collaborating with government and industry bodies: construction firms should work closely with government agencies and industry associations to advocate for policies that support workforce development. 
This could include funding for training programs, streamlined immigration processes for skilled workers, and incentives for companies investing in workforce development.

Many firms are raising base pay rates and Vinci Construction is offering competitive salaries and benefits to retain skilled employees.

Construction companies are also enhancing benefits packages to attract and retain talent, like Bechtel, who are focusing on diversity and inclusion initiatives to attract a wider talent pool.

CEO and Chairman of Bechtel Corporation, Brendan Bechtel, also acknowledges the: “Importance of mental health in the construction industry”, highlighted by Mark Reynolds, CEO of Mace, the construction and consultancy company, who wrote: "Everyone has the right to work in a safe and healthy environment so, as business leaders, we need to view mental health as a growing business risk in the same way we do other risks."

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