Study finds construction skills shortage at breaking point

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A new study has revealed the shortage of skilled workers is having a serious impact on the ability of the sector to carry out projects…

A comprehensive survey of the construction supply chain has revealed significant issues are being caused by the shortage of skilled workers.

The ‘Sustainability in the Supply Chain’ survey, carried out by built environment specialist Scape Group, questioned over 150 contractors, subcontractors and senior managers within public sector organisations. It looked at the stability of the supply chain, the process of tendering, and the reliance on the public sector.

Skills shortage

The skills shortage is not a new phenomenon and has been a problem since the aftermath of the 2008 recession. Multiple warnings have been delivered highlighting the problems ahead if the shortage of skilled workers is not addressed.

This new survey showed how much the skills issue is impacting the sector. Results revealed 58 per cent of contractors and suppliers thought the skills shortages was having a negative impact on the quality of workmanship. In the public sector this figure hit even higher, reaching 85 per cent.

Some 35 per cent of managers in the public sector thought the skills shortage was ‘bad’ or ‘severe’ in their area. However, 85 per cent of SMEs said they had seen a shortage in their area.

It’s not just the issue of recruitment that is a problem. A total of 80 per cent of public sector respondents and just under 40 per cent of contractors and consultants said the skills shortage was having an impact on their ability to keep to budget. While 42 per cent of public sector managers said it was one of the main barriers to a sustainable supply chain.

Scape Group Chief Executive Mark Robinson said: “Our research has shown that the skills shortage is at breaking point, not only severely impacting the quality of what we are building but also our ability to build it on budget.

“While there is a mountain to climb to overcome this challenge, basic recommendations can be put in place to ease the burden, for example, 19 per cent of contractors and subcontractors still do not have an apprenticeship scheme.”

Public and private sector

The survey also highlighted disparities between how the public and private sector define healthy supply chains.

A total of 72 per cent of the private sector focus on long term operational stability, 63 per cent said their focus was on minimising waste and recycling, and 58 per cent on supporting local economies. Some 67 per cent of respondents said stable pricing made a healthy supply chain while 63 per cent thought stable employment patterns were the key.

In the public sector the outlook was different, with 70 per cent of respondents stating the main priority should be long term benefits for the local economy. On the issue of what makes a healthy supply chain, 67 per cent said local skills and suppliers were the most important.

Robinson said: “Now more than ever we need to work more closely together in order to deliver for both the public sector and SMEs.

“We can only achieve sustainable levels of efficiency through a perpetual focus upon true collaboration, partnership and greater engagement with all stakeholders.”

Tendering

Another element discovered through the survey was the challenges in communication between both public and private sector. Some 75 per cent of suppliers believed the public sector needs to do more to engage with its supply chain and 80 per cent of public sector managers agreed.

Additionally, issues with how tenders are put out were also raised through the survey. Some 68 per cent of contractors and suppliers said they bid for work six to 12 months before a project or contract started, but 33 per cent said they should be able to start this process 18 months before the contract starts.

SMEs said they had the most problems with public sector tendering, with 51 per cent stating they were not well informed about public sector contracts. Only seven per cent of SME suppliers said they were aware of public sector projects more than 18 months before they could bid for the work. Almost a quarter (23 per cent) said they would like to know about opportunities two years before the start of the contract.

Public sector reliance

The survey also revealed an overreliance on the public sector. In fact, more than a quarter of the business for 64 per cent of contractors and suppliers was funded via the public sector.

SMEs reported they rely heavily on the public sector, with over a quarter (26 per cent) of firms revealing it funds more than 50 per cent of its work.

Robinson said: “Given the current economic uncertainty the £30bn of public sector construction activity is a vital stream of revenue for the sector and early signals from the new government that austerity measures might be eased would be welcomed across the board.”

Recommendations from the survey

Scape Group made a series of recommendations following the survey results. Firstly, there is a genuine and urgent need to address the skills shortage. This was highlighted as the most serious barrier to growth and efficiency. Scape Group also said more needed to be done to address the gender gap within the sector.

Secondly, there should be better visibility of tenders. The group called for these to be made available more than 18 months in advance to give SMEs time to plan ahead.

Thirdly, collaboration between the public sector and supply chain needs to improve to support greater efficiency. The disparity between what the public sector deems important and what the industry believes necessary needs to be addressed. Measures to make it easier for the public sector to engage with SMEs should be enacted.

Lastly, there should be a focus on the importance of local spend and social value through its supply chain. The public sector should look at how it can communicate the value of local spend and should present tangible results that suppliers can relate to.

Speaking about the findings, Peter Young, Kier Executive Director, Building UK, said: “This research offers important insight into the benefits of working collaboratively with local suppliers to create a long-term, sustainable supply chain.

“Kier is committed to working with local businesses and suppliers in the communities where we work, which spans projects nationwide from Aberdeen to Truro.

“Over the last five years working with Scape, we have delivered 70 percent of project spend within 40 miles of site, with almost half of our workforce living within 20 miles of our projects, clearly demonstrating our commitment to supporting the local economy and the valuable role that a key framework can play in facilitating local spend and social value.”

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