Global labour shortage in the construction industry

On the 28th of August this year, the UK government published an update to its Shortage Occupations List. The list outlines the sectors and specific roles within each sector, that the government has identified as not having enough resident workers to fill the vacancies. This year’s updated list shows the usual demand for doctors, nurses, and chefs as it has for the last few years, however it also highlights a huge increase in the shortages of skilled, as well as unskilled labour, in the construction industry.

Coupled with recent publication of the Federation of Master Builders State of the trade survey, this shortage should come as no surprise to anyone involved in the construction sector. Whether working as part of the design and delivery teams, labouring on site, or managing projects, there is no doubt that we are facing a skill shortage in the construction industry workforce. This year, almost every conference, symposium, or forum I have attended, has had at least one talk that focused on the shortages facing the construction sector with topics ranging from identifying the causes of the shortages, to trying to find new and innovative solutions to the crisis we are facing.

Skills shortage – a global phenomenon

What has been interesting to note, and not very often discussed in the UK conferences that I have attended, is that this skill shortage is not only affecting the UK but is in fact a global phenomenon.

The Irish Construction Industry Federation’s (CIF) economic outlook highlighted several studies by the Central Bank, The CIF, and the society of chartered surveyors, that identified skill shortages as a major obstacle for the coming years. A recent Irish Times article indicated that up to 120,000 more workers are required to National planning framework targets according to the CIF.

New Zealand, which is currently going through a major construction boom, has identified both immediate and long term shortages in construction labour force in the government’s skill shortage lists. It is also considering creating a Kiwibuild skills shortage list as part of the Ministry of housing and urban development Kiwibuild strategy, in hopes of trying to satisfy the government’s home building programs.

In a recent article in Forbes written by Jeffery Steele, the US construction industry is also dealing with a massive shortage of labour resulting from the 2008-10 depression. This has been compounded by the recent changes in government policy towards immigration, as from my previous experiences working in the States, a large percentage of onsite labour were non-native. According to the bureau of labour statistics and the national association of home builders, there are 143,000 vacant construction positions in the US labour market.

Other countries including Austria, Australia, and South Africa have all reported high demand for construction labour in their respective occupation or skills shortage reports. Poland’s largest construction firm is even offering cash rewards of up to £400 for recommendations in filling 1100 positions.

Declining population

On a recent trip to Japan, I arranged a few meetings with colleagues to discuss some the problems facing the British and Japanese construction industries. While my discussions were focused on the implementation of Building Information Modelling (BIM) solutions, one of the common issues that arouse was the shortage of skilled users when trying to build BIM capable teams. Japan has had a declining population for a long time, with the 25-52 age group making up only 30% of the 128.6 million population which continues to drop each year. While the UK still has a larger percentage per population of young people in the work force, we also have seen a decline in population, as have most of the developed countries worldwide. The declining birth rates and increasing retirement of experienced workers has pushed the industry and governments to look at solutions to mitigate these problems.

Economic constraints However, declining birth rates and retirement are not the only issues affecting the decrease in qualified applicants for construction roles. The construction industry has seen both rapid growth and just as rapid decline resulting from the economic down turn in the last decade. The result of which highlighted the instability within the sector, heightening the already strained financial positions of many SMEs and single operators, and bringing to light a problem long existing in the construction sphere, that of timely payments of invoices. This has resulted in many qualified candidates moving to other industries in search of more stability.

While sector growth has seen profits being made by developers and large companies, not everyone has benefited equally from this growth. Like other industries, the gap in pay, and the uncertainty of continuous employment, has driven some in the industry to look for other sources of income, or move to other sectors. In addition, the industry must face the challenge of being categorised as one the slowest sectors in terms of change and adoption of new technologies, which might dissuade young graduates from going down the construction industry career path.

Brexit

Political and socioeconomic factors have also contributed to the disruption of employment opportunities. In the UK, where according to the office of national statistics the construction industry employs nearly 2.2 million people, with foreign workers making up roughly 13% of this number, the uncertainty of the Brexit negotiations has caused some foreign workers to look for opportunities elsewhere in Europe. The recent Migration Advisory Commission (MAC) report from the UK governments independent panel of advisors, has also highlighted the need for further study of the situation. While the report does look at solutions for the problem of foreign labour in the UK, the report prioritises high skilled labour over unskilled labour, despite the need for both in the construction industry.

Solutions

The global, and immediate, nature of this labour shortage has resulted in large scale government interest to develop new solution and promote growth and change in the industry. The construction sector in the UK makes up nearly 9% of the GDP, so it is no surprise that the government is looking at innovative solutions to deal with this crisis. This year for example, the UK government launched a £22million fund to boost construction skills and bring training to construction sites. It also launched the Transforming Construction Programme challenge with £170million in government funding and £250 in industry funding to create new solutions to current construction methodology. The government has also introduced an apprenticeship levy in an attempt to add 3million new apprenticeships by 2020.

The UK is not the only government making changes. This year saw the Japanese government announce plans to attract 500,000 foreign workers in an attempt to fill labour shortages. Indeed, I did see a lot more foreign nationals working in Japan in my recent visit, than I did when I first visited 14 years ago. Elsewhere, the Hungarian government has been running an advertising campaign to attract labour from the Ukraine and other neighbouring non-EU countries. The Polish government is considering the option of easing restrictions on Philippine immigration and visas to tackle its labour shortages. Germany is looking at non-EU migrants to fill its labour shortages. According to the New Zealand Herald, the New Zealand government has announced it will be easing restrictions to employ foreign construction companies, and labour as part of the Kiwibuild strategy as well as looking at prefabricated construction solutions from around the world. Governments worldwide, are pushing for more diversity in the workforce, as well as examining new opportunities for introducing construction opportunities into the education systems.

Private industry is also capitalizing on the shortages in the workforce, and looking at tools from automation, robotics, and artificial intelligence to take up the slack. Earlier this year, Japanese construction firm Shimizu announced that it was testing the use of construction robots as a means to tackle their onsite labour shortages. The Semi Autonomous Mason has been featured heavily in many publications and shows worldwide this year and is now commercially available for purchase.

The market for onsite self-driving vehicles is set to boom in the next five years. Powered and non-powered construction Exoskeletons, wearable mechanical suits using motors, pneumatics or hydraulics to augment or assist the user in tasks from walking to lifting, are already being tested by companies including Willmott Dixon as ways to enhance human performance as well as reduce health and safety risks on site with ABI research predicting the market growing to $1.8 billion by 2025. ALICE, an AI based machine learning algorithmic solution for project programme and timeline development is providing real savings in cost and labour management on a number of different projects worldwide. Companies like Katerra are taking lessons from the automotive industry and focusing on off-site manufacturing in order to provide fast, efficient construction solutions to optimize delivery, and explore ways of advancing technology in the sector.

Digital Construction Week, and London Build expo were recently held in London. Both shows heavily featured technology solutions including construction robots, digital project and facilities management, BIM communication solutions, as well as visualization, mixed reality, and surveying tools. All with the purpose of increasing productivity and efficiency, usually with smaller teams in mind.

While the interest of both government and industry in introducing new technology is great news for the future of construction, it is however important to remember that the construction industry is historically very slow to adapt to change, and we will continue to face huge challenges in the coming years as the resource pool continues to shrink.

#Construction #BIM #Labor #Skills #skillshortages #Industry #Economy #Worldwide