With the upcoming RICS Global Construction & Infrastructure conference, labour shortages are being addressed including panel discussions on: Navigating Supply Chain Challenges and The Future of Work in Construction: Addressing Labour Shortage and Skills Gap.

Speakers include David Rockhill, partner of McKinsey & Company, one of the global management consulting firms, and Karen Ching, Regional Director of Project & Programme Services of AtkinsRéalis, a world-leading design, engineering and project management organisation. 

RICS (the Royal Institution of Chartered Surveyors) is a global organisation for the Built Environment, Construction, Land, Property and Real Estate industries.

RICS is considering the ageing population and geopolitical disruptions that are leading to material scarcities and increased costs, and aims to address the complexities of current global supply chain issues.

The company is also offering strategies for resilience to manage material shortages, cost fluctuations, effective supply chain management, risk mitigation, and adapting to global logistical challenges in the construction industry.

RICS additionally aims to explore how different regions are dealing with labour shortages and skill gaps in the construction industry, including: the impact of automation on the workforce, innovative training programs, GenZers preferences on upskilling themselves, the integration of automation and robotics and strategies to attract and retain skilled workers in the construction sector.

So we take a look at what’s causing labour shortages, what this means for the construction industry, and what lead players are doing about the problem.

What is causing world wide labour shortages? 

There are several reasons contributing to the global labour shortage in the construction industry.

An ageing workforce is one of the leading problems, as a significant portion of skilled construction workers are approaching retirement age, resulting in a declining workforce.

Another primary issue is a lack of skilled labour, as the construction industry faces a shortage of workers with specialised skills, such as electricians, plumbers, and carpenters, due to a lack of vocational training programs and apprenticeships.

A problem that the construction industry has been challenged by, is perception of the industry. Construction work is often perceived as physically demanding, with long hours and challenging working conditions, which deters younger generations from entering the field.

Other reasons contributing to the global labour shortage include:

• Cyclical nature of the industry: construction projects are cyclical, leading to periods of high demand followed by downturns, making it difficult to retain skilled workers during economic fluctuations.
• Competition from other industries: workers, particularly those with transferable skills, are attracted to other sectors that offer higher wages, better benefits, or more favourable working conditions.
• Urbanisation and infrastructure development: rapid urbanisation and infrastructure projects in many regions have increased the demand for construction workers, exacerbating the existing labour shortage.
• Immigration policies: restrictive immigration policies in some countries limit the availability of foreign workers, who have traditionally filled construction labour gaps.
• COVID-19 pandemic: the pandemic disrupted the construction industry, leading to project delays, layoffs, and a potential loss of skilled workers who may have transitioned to other sectors.

Global approaches to construction labour shortages 

For almost a third (31%) of construction employers, finding skilled staff is a key challenge, especially with older workers retiring and not being replaced. 

Many countries including the U.S., UK, Germany and Japan, have experienced labour shortages in sectors like healthcare, skilled trades, technology, trucking and logistics.

With the construction industry being one of the world’s biggest consumers of energy and raw materials, it is no surprise that labour workers are needed in masses. Yet labour workers are decreasing and becoming harder to occupy.

Considering the increase in construction and world wide technological developments alongside environmental goals, the construction industry is at a crucial junction.

AI (Artificial Intelligence) and IoT (the Internet of Things) are amongst the primary technical developments booming the construction industry with robotics being introduced to construction areas.

This overall infrastructure modernisation is causing the construction industry to face a big wave, not to mention the challenges of sustainable building, intelligent urban environments, urbanisation and climate change. 

What are leading construction companies doing to tackle the problem of labour shortages?

Globally to address the issue of labour shortages, governments, industry associations, and companies are exploring strategies such as: investing in training programs, improving working conditions, adopting new technologies, and exploring alternative labour sources.

Leading construction firms are tackling labour shortages, including:

• Balfour Beatty - is leveraging technology and offsite construction methods. 
• Skanska - is utilising recruitment efforts targeting underrepresented groups.
• Bechtel - is focusing on training programs and partnerships with educational institutions. 
• Fluor - is implementing retention strategies, offering competitive benefits and career development opportunities. 
• Jacobs - is prioritising diversity and inclusivity initiatives to attract a broader talent pool.

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