Closing the skills gap: Part 2 - Apprenticeships

This week is National Apprenticeship week and with that in mind, I thought I would do a part two of closing the skills gap.

The government is imposing an apprenticeship levy from April 2017 something that is likely to have an impact on how employers view the viability of apprenticeships. However, should this affect how many apprenticeships are available going forward and will this be off putting to employers previously offering or considering the idea of offering apprenticeships?

In short, ideally not. From April 2017, employers whose payroll exceeds £3m, will pay a levy of 0.5% of their payroll on anything over the £3m. So what is the reality? In the main, for those with a payroll under £3m nothing will change but for companies that exceed this figure, the reality is they may reduce the number of apprenticeships they offer. Seen as a "payroll tax" arguments against the levy are mainly to do with the fact that this will increase business costs. However, it can be seen as a positive as discussed by the Association of Colleges that it will help to reverse a 20 year decline in employer spending on training, will be more effective than voluntary initiatives in that period and will, as a result, secure benefits for individuals and employers. The levy is part of a larger set of reforms designed to narrow the 20% productivity gap between the UK and other advanced countries

Its an interesting idea and as I have mentioned before, the ever growing skills gap means training is needed more than ever before in the Construction industry. Perhaps being "forced" is the best way to really address a problem that most within construction are concerned about but few are making any real progress with. It needs to be a two pronged attack though. Whether there are a lot of apprenticeships available doesn't matter if people do not know that they are available. Promotion of careers and higher education options within schools is key. Schools and employers need to work together to inspire and engage with students to educate them on the opportunities available to them and the careers in construction that are available. Where construction is concerned this engagement needs to be equal for both male and female students as research shows that this is not currently the case.

Apprenticeships are a fantastic way to learn a new skill, begin a career and earn whilst doing so. Organisations such as K10 not only help people get apprenticeships but social responsibility is high on their agenda. Of apprentices on site 15% are women, 12% are ex-offenders, 73% are 18-24 years old, 10% have a disability and 84% were previously unemployed. With a combination of up-skilling people and filling the skills gap, by encouraging more people to take up an apprenticeship we will be able to take steps to fill the 182,000 construction jobs currently available.

Women in Construction Awards 2017

Last Wednesday 1st March was the 2017 Women in Construction awards in Manchester Deansgate Hilton. Now in its 11th year, it was a chance for the construction industry to celebrate the achievements of the women working within it with a number of categories representing the different professions and trades.

With awards covering QS of the year, Rising Star, Engineer of the year, tradeswoman of the year and many more, we were able to meet outstanding women working hard all over the country within the Construction industry. The guest speaker was Debra Searle MBE, an inspiring woman who rowed across the Atlantic solo.

After a delicious dinner, the awards began, NAWIC had finalists in 3 categories - Rebecca Hartshorn  and Tanja Smith in Outstanding Woman in Construction, with Tanja winning, Katie Shepherd winning Mentor of the year and I was a finalist for the Rising start over 25 award.

With a range of judges from all over the industry including Bridget Bartlett, deputy chief executive at CIOB,  Professor Chris Gorse, director of the Leeds Sustainability Institute, head of the Centre for the Built Environment and professor of construction and project management at Leeds Beckett University, Lucile Kamar, equalities manager, RICS, Jane Nelson, executive director, Mears,  Emma Richman, director of assets at Bury Six Town Housing, board member of Procure Plus and chair of the audit committee and Christine Townley, ambassador, Construction Youth Trust there was a wealth of knowledge and experience on the panel. Each judge presented a video praising the strengths of the winners, demonstrating why they had won.

The awards support Construction Youth Trust and raised over £2000 for this worthy cause.

Attracting girls to the Construction industry

Whilst conducting research for my dissertation, I was surprised to find such a lack of interest in the Construction Industry when surveying a range of female students. What was surprising was not that they did not know anything about the built environment, but that despite not knowing anything about it, they branded it boring. They also declared they did not like it and they were not "good" at it.

The question is, good at what exactly? When we are in a situation where the next generation of workers are not even slightly interested by the industry and the skills gap is ever increasing we need to find ways to break down what the industry can offer and why it could be great for these young women.

According to a recent report by The Construction Skills Network (CSN), the UK’s most comprehensive construction forecast, predicts growth of 1.7% over the next five years, with 179,000 jobs to be created – a better outlook than was predicted immediately after the EU referendum. What this means is we have a lot of jobs being created and no where near the number of skilled workers required. We need to do more to encourage the next generation to consider Construction as a career choice.

Perhaps next time you're in a situation where you can give some advice and you're told, I'm not good at construction, maybe you could ask one whether they are any "good" at any of these...

1. Good at maths? whilst maths lessons at school were often a bore, for some maths is easy and interesting. For them consider engineering.

2. Good at being creative? If this is more up your street then how about architecture, interior design or again engineering. Or perhaps a trade, painting or carpentry/joinery?

3. Good with people? If you are a people person, how about Construction management, Project management or Business Development?

4. Good with details? If you have an eye for detail then Quantity Surveying or planning could be the choice for you.

5. Good with your hands? If you don't like the idea of being stuck behind a desk all day then consider a trade. Electrician, plumber, carpenter and many more trades are available. A way in to this is through an apprenticeship, something that the government is pushing and increasing the number of this year.

These are just a few career options after thinking about what you might be "good" at. There are so many different roles within the industry that require a range of different skills, so suggesting you are not good at construction is crazy. It is an industry worth exploring with a number of routes in. It may be that you know someone who is struggling to choose a career, who may need some guidance. Chances are she hasn't considered construction, so why not give her a nudge!

The Construction Gender Pay Gap

So, now that its 2017 are you thinking new year, new you? Planning out all the things you'd like to achieve over the next 12 months? Good for you! It may be a new job, it may be that promotion you've been working towards, it may even be a new qualification but regardless of this, have you thought about pay?

Late last year, there were reports that the UK construction industry had the lowest gender pay gap on record at 16.3% which according to the Office of National Statistics (ONS) was down 1.8%.  Whilst some were out there celebrating "hooray for us, we are the lowest", I was thinking that 16.3% is still a pretty large gap. More and more articles have popped up over the last couple of months suggesting a gender pay gap as large as 23.3% and whilst this is based on a tool from the government and the ONS it is still useful to see.

Looking at the data it is easy to see we have a major problem here. How are we supposed to attract women to the industry when the 1% of women working in trades are being paid 15% less than the men? It is a hard enough environment for women to enter and work in without the added information - which is freely available online - that they are also being paid less to do the same job. With technology what it is, strength plays a minimal part in trades and can no longer be used as an excuse.

Looking to the professional roles its a much less gloomy picture. Civil Engineers earn 2.8% more than male counterparts whilst project managers earn 3.2% less with female Chartered Surveyors earning 0.9%. The big gaps are evident in architecture where female architects earn 9% less then male architects which further compounds the data that architecture is primarily made up of older, white males from privileged backgrounds - an old boys club of sorts that looks after its own.

The skills gap, the gender imbalance and the pay gap in the construction industry are all inter-linked and as a result, more needs to be done to address all three issues if we are ever to eliminate even one of them. To address the skills gap, we should look to attract women to the industry (as part of the solution), to attract women, we need to ensure that they are not on the back foot from the get go, feeling under valued knowing they earn less for the same role. Once something is done to address this, perhaps more women would join the industry reducing the imbalance even slightly.

To me, it seems obvious that a gender pay gap is lose lose for everyone. For the women doing the jobs, they feel resentment knowing that the guy sitting next to them doing exactly the same job is most likely getting paid around 20% more than them. What is the incentive to work as hard? This demonstrates why companies lose out - all companies presumably want their employees to produce results. Why wouldn't you pay all your employees based on merit rather than gender. Then they gain an incentive to be as productive as possible. Then there are the men in this situation.

Whilst majority of people would not care if their colleagues were being paid less than them regardless of the reason, it should matter on a general level. Being paid more based on gender de-values your work. The reality is that they aren't only being paid more because they are good at what they do, they are being paid that much because they are male.

Why wouldn't you want your partner to earn the same regardless of gender? Together, you would then have more income. And do you think your mum or your sister or your mate should be paid less despite being great at their jobs just because they happen to be female? It just doesn't make sense. Women earning the same as men doesn't change what men earn, it shouldn't change anything other than it makes women feel that they are valued despite their gender and it is right that they should.

What is a different matter is pay based on merit... something I think will be more important once the headlines read "Gender pay gap % in Construction". Hopefully we will see this headline soon!

Closing the skills gap: Part 1 - Schools and their influence

As I have discussed in previous posts, the construction industry skills gap is something that at some point will affect us all. Previous figures suggested there are 182,000 construction jobs to be filled and importantly, this is not taking account of new projects either announced or on the horizon. With projects such as Hickley Point C already affecting labour available for current projects and the announcement in the Autumn budget of major infrastructure projects going ahead to support the planned increase in housing, such as Crossrail 2 and HS3 in addition to the planned Heathrow expansion, something needs to be done urgently.

I wrote before that an immediate solution for this would attracting millennials as there is a general lack of interest from this age group in the industry. They could be key to filling the void in the short term if we could engage with them. However, for a long term solution, we need to look to a younger generation, to primary and secondary schools for a source of future labour. Research shows that those who have a family member or people close to them working in the construction industry are significantly more likely to take a job in the Built Environment. Those with no connections are very unlikely. So how can we change this?

We need to look to students still at school. Reaching children who have not made their minds up about a career and therefore their academic route - GCSE choices, A-Level choices, BTECs etc or even apprenticeships - could be the difference as to whether they are able to enter the industry easily or not and it is far more likely that they would if they didn't need to go back to school to get required qualifications. The main issues seem to be a lack of knowledge of what career options are available in construction, a lack of interest in the industry, and a pre-conceived idea of what working in construction is like. The problem with these 3 issues is that there is little engagement between the industry and schools to change this. Whilst the industry talks about it, they don't do that much, and schools are no better, saying they want to be involved but in reality do not promote the construction industry as a good employer and on the whole do not engage with construction employers.

Organisations such as BESS Programme and Class of Your Own have been set up and fully engage with schools, pupils and the construction industry. BESS - Built Environment Skills in School is a project which aims to inform pupils in school and further education about the opportunities available to them in the Construction industry. The programme recognises the issue of the skills gap in the industry and is seeking to address this but it can not be left to one or two organisations to deal with whilst the industry sits back and just talks about what can be done.

We, in construction, have a responsibility to ensure that we inspire the next generation so that we can ensure the skills gap closes. If we continue to only discuss and not act, the number of construction jobs that needs to be filled will continue to rise well above the current level of 182,000. However, what is clear is that it is not just a lack of action by the construction industry, but also a lack of engagement by schools and a lack of knowledge and understanding of students and their families who are likely to be the ones giving careers advice. It is vital that schools are more pro-active and give pupils options, but it is equally important that they have access to material and resources in order to do this.

There are easy ways to engage with this generation through organisations such as BESS who. If you would like to get involved with the Built Environment Skills In Schools Programme, you can follow them on Twitter @BESSprogramme and visit their website to create a 90 second career video that will be used to inspire the next generation of construction professionals. Find more info at http://www.beskillsinschools.co.uk/home-page/get-involved-2/

The uncertainty of Brexit and the impact it is having on the Construction Industry

With the headlines full of the recent ruling against the government in the latest segment of the Brexit saga (pre results of the US Election), I wanted to think about what it will mean for the construction industry and what it already means.

In the wake of the Brexit result, I was at a networking event where the main speaker touched upon Brexit - a topic people were keen to avoid in order to minimise the risk of an argument or upset. The speaker had one clear message for the industry: "We must not talk ourselves into a recession". So far, so good. We seem to be doing ok. There are mixed reports regarding the housing market but projects are going ahead and redundancies aren't widespread in the industry. Which is obviously great news, but with projects such as Hinckley Point C going ahead, the decision on the Heathrow expansion one step further, it should make us question where we are going to get the labour from in a post Brexit Britain. 

Whilst there is no immediate effect in terms of law and visa retrictions, EU migrant workers have started to move back home unsure of how the next few years will pan out. The result of this may be that we see a drastic change in the make up of the construction industry. The main concern around Brexit is that the UK may lose access to the single market, a key provider of construction labour. It is estimated that 15% of the current construction workforce is European labour.

A further shortage of labour, in addition to the pre-brexit figure of 182,000 vacant construction jobs, would likely mean a rise in wages across the industry. As I mentioned in a previous post, the rail industry has already seen huge wage rises due to shortages of workers and engineers building new lines and tunnels resulting in a staggering increase of 74 per cent between 2012-2015.

And its not only a shortage of labour that is affecting the Construction Industry. We are already seeing an increase in costs of materials as a result of the weak pound. Steel prices are on the increase, as are costs of any materials imported from abroad and this means now that any variations on existing projects are likely to cost the contractor and the client more as costs are passed on. The result being that projects risk going over budget and an increased risk of projects being put on hold.

This kind of wage increase in conjunction with the rising cost of materials and the projected flat lining of growth within the sector for the fourth quarter signals an increased likelihood of problems for the weaker players in the industry. However it is by no means all bad news.

The uncertainty post Brexit was thought to signal doom for the industry. However there are several positives to come out of it. 

 

1. Housing: Inward investment due to the weak pound means that UK property is cheaper to overseas investors, meaning there is still the demand for UK property not only from domestic buyers but also foreign investors. The housing market saw an increase in growth in the third quarter of 2016 which has propped up the industry as a whole. With the government falling behind on their target of 1 million homes by 2020, the autumn statement should provide the sector with the boost it needs to stimulate growth with announcements likely to include plans for more local authority house building as well as build to rent homes. 

 

2. Infrastructure Projects: With the confirmation of infrastructure projects such as Hinckley Point C and the Heathrow expansion as well as HS2 and Crossrail 2 in the pipeline, even more jobs are being created. Whilst there are issues around this because of a shortage of labour, this is still a significant boost to the construction industry with these projects said to be worth around £400m. This will be especially beneficial in the areas where HS2 and Hinckley Point C are going ahead for job creation.

 

3. Is there scope for a deal with the US in this new Trump era? Only last month, Trump representatives claimed Britain will be offered a free trade deal before the rest of the European Union if the Republicans win the US presidential election, which they have. As with Brexit, only time will tell what the outcome of trade deals between the UK and the US will be but depending where you sit, this could be good news.

 

There is no definitive answer as yet and it is unlikely that there will be for some time until Article 50 s triggered, negotiations get under way and eventually conclude. Until then, it is important to keep the words of the speaker in mind... "We must not talk ourselves into a recession".

 

Millennials: spoiled brats or key to the success of the construction industry?

Everyone knows there is a skills shortage in the construction industry. There are reportedly 182,000 construction jobs that need to be filled by 2018 and currently no real plan to achieve this. I touched upon it in my last post because given the male to female ratio in the industry it would seem crazy not to try and fill it with bright, capable, hardworking women. However there is another labour source currently not being fully engaged; Millennials. So this post will look into why millennials are shunning construction in favour of pretty much any other industry.

Millennials get a pretty bad rap. Defined as those born between 1982 and 2004, they are branded lazy, entitled, narcissistic with no work ethic and who can't commit - to a job, to a relationship, not even to a diet fad! But is this really fair? In the U.K. (and a lot of the developed world) we are facing the issues of an ageing population. In the construction industry specifically this means that more people are retiring but there are not enough people to replace them. And here arises the current issue of The Skills Gap.

The skills gap is an issue in the construction industry because whilst the economy is in good shape and the construction projects are plentiful, more and more people train in the trades and in the construction professions. In an economic downturn the construction industry is one of the first to go with funding disappearing and projects being put on hold. Therefore people leave because there is not enough work and move to other industries, rarely coming back. Just look at the shortage of Bricklayers and Quantity Surveyors as an example. 

The issue is this, Millennials, the next generation of the UK workforce are simply not interested in the construction industry. They perceive it as slow, outdated and traditional which when compared to industries such as Tech, which are are fast paced, agile and innovative it is easy to understand why construction is rarely first choice.

So what can we do to attract millennials to the industry? 

1. Embrace new technology. There are so many technological advances that can bring construction into the present day and make working much more efficient allowing contractors to cut costs on projects. BIM and Drones are good examples. Millennials are technologically savvy and find it easy to adapt to new ways of working.

2. Show the potential a career in the industry has. Millennials are looking for opportunities to be successful in whatever they do. They are looking for career advancement and leadership opportunities. It is important to move away from the "time served" approach of so many older members of the industry and look at ability and track record when it comes to promotions and rewards.

3. Flexibility. A recent article by the FT reported that the culture of long hours fails to deliver. The outcome is that rigid working cultures that measure performance by the hour lead to fatigue. Flexibility in working and a move away from a culture of "face time" in the office is attractive. People recognise they have deliverables and that they are responsible for them. Flexibility in working hours doesn't mean people work less, but it leads to happier, more productive workers because they can work around other commitments like children or so that they can travel in less busy periods of the day. 

4. Make the earning potential obvious. Construction can pay well. Particularly with a shortage in skills and a larger demand for project personnel is pushing wages up. This is especially the case in rail where there is an even larger labour shortage, there is the potential for wages to increase. According to Thisismoney.co.uk pay for massively in-demand rail workers and engineers building new lines and tunnels has soared by a staggering 74 per cent between 2012-2015. 

This group of young, bright and talented people could be the answer to filling the labour shortages and reducing the number of available construction jobs from 182,000. With unemployment amongst 18-24 year olds in the UK at a level where it is one of the highest in the developed world this could solve two major issues the UK is facing. Attracting Millennials could also be a way of bringing the construction industry into a new era, focusing on using the latest technology and efficient working moving the industry away from the old rhetoric of "this is how we've always done it".  

By attracting the brightest and smartest young minds to replace those leaving the industry, it could become the norm for construction projects meet the targets of being completed to time, quality and budget.