Unexpected skills crisis in the construction sector caused by lost generation
“Unexpected” skills crisis in the construction sector caused by lost generation
• Scrapping of graduate trainee programmes during financial crisis leads to shortage of experienced staff
• Problem will get much worse as construction work recovers
An “unexpected” skills crisis is fast developing in the construction sector as the cancellation of graduate trainee programmes at the start of the credit crunch has led to a severe shortage of professionals with 3-5 years’ experience, says Project Resource, the leading construction and engineering recruitment agency.
Project Resource says that white collar construction professionals with 3-5 years’ experience have already seen salary increases of 14.3% in five years, from £35,000 pa five years ago to £40,000 pa now. Over the same period average UK wages have only increased by 10.4% (see graph below).
Explains Andrew Szklarek, Director at Project Resource: “Given the slowdown in the construction sector you might have expected that the industry was awash with spare talent but amongst professional level jobs such as Quantity Surveyors and planners that is not the case.”
“The problem is particularly acute amongst the 3-5 year experience band where we have lost almost an entire generation of construction professionals. A tight recruitment market there has already led to wage growth far outstripping the rest of the workforce and that will get worse as the construction sector continues its recovery.”
Project Resource says that not only were graduate trainee programmes scrapped as the credit crunch started, but also younger graduate level construction professionals were especially targeted for redundancy on a “last in, first out” basis.
Adds Andrew Szklarek “A high proportion of the professional workforce who struggled to find work moved into different sectors or moved abroad. If they leave the sector for long they lack the recent experience needed.”
Pay increases amongst white collar construction professionals
Andrew Szklarek says: “The same problem happened in the last major recession in the nineties. It is very worrying that there is already a skills shortage for employers to address, when the construction sector is still operating at well under its full capacity.”
“As the economy recovers and the number of projects increases, the skills shortage is going to be much more noticeable as the number of vacancies increases.”
Following a major decline in the construction sector during the most recent financial crisis, the industry has begun to see signs of recovery. ONS statistics show that while UK GDP shrunk by 0.3% in Q4 2012, construction sector output increased by 0.3%, following a decrease of 2.5% between Q2 and Q3
Andrew Szklarek continues: “Now the construction sector is beginning to pick up pace, sourcing individuals with the required skillset is becoming all the more important, and businesses are willing to pay more to attract the best workers.”
“Whilst blue collar workers are easier to source, it is that missing cohort of white collar workers with the relevant experience that is proving a problem for construction and infrastructure companies.”
Andrew Szklarek says that, longer term, more needs to done to attract students to study construction industry related undergraduate and postgraduate degrees such as quantity surveying.
Adds Andrew Szklarek: “We have both a short term skills crunch and a longer term shortage of graduates coming into this industry that needs to be tackled.”
** ONS Annual Survey of Hours and Earnings, median salaries