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What’s the outlook for skills shortages in construction?

As we pause for the outcome of Brexit negotiations, sentiment across the sector remains broadly business as usual, however there is an undercurrent of caution and concern as we wait to see the outcome to the current political proceedings.

It remains to be seen what will happen across the next couple of months, however employers are still hiring for their needs which is a positive. However, against these intentions, employers continue to face skills shortages which have plagued the industry for a long time.

Alongside this, a high proportion of EU talent who previously would come to the UK for opportunities aren’t as interested anymore due to the less attractive pound to euro exchange rate, and a continued lack of clarity on Brexit. In some areas this will leave employers even more stretched to find the talent they need.

While there are some mechanisms in place to cope with these talent shortages, employers are encouraged to take onboard some key recommendations to attract and retain the best talent in order to put themselves in the best position for the months ahead.

Skills shortages affecting more than just productivity

As challenges in finding the right talent continue, employers are increasingly aware of the effect skills shortages are having on their workforce. In research from our Hays Salary & Recruiting Trends 2019 guide, 92% of employers say they have experienced skills shortages this year, with 22% saying they have faced extreme skills shortages. This result is slightly higher than those who experienced extreme skills shortages last year at 18%. Employers believe both fewer people entering the job market in their industry and competition for roles/job opportunities (both at 47%) are the main cause of skills shortages in the industry.

Over half of employers in the sector (56%) agree that continued skills shortages are having a profound impact on productivity, more so than UK employers overall (49%).

According to employers, skills shortages have also negatively impacted their ability to deliver projects (43%), employee morale (36%) and growth and expansion (32%). Pressure on employees is likely causing less than half (49%) of professionals to say they are satisfied with work-life balance, which hasn’t improved over the past few years. Employers are encouraged to take steps to address this balance to lift the burden on their staff.

Skills in demand

Looking ahead this year, the majority of employers in the industry (63%) say that operations and technical skills are most in demand. This is considerably higher than last year’s figure of 44% and higher than the UK average (also 44%), indicating the emerging impact that technology and AI are having on this sector.

Second to operations and technical skills, 40% of employers revealed managerial and leadership skills are most needed by their organisations, followed by project and change management skills (29%). In light of the prioritisation placed on operations and technical skills over the past twelve months, employers must contend with the possibility that securing the right talent may become more difficult in the short term.

Mechanisms to alleviate shortages

The struggle for talent looks set to continue over the next 12 months as over two-thirds of construction employers (69%) expect to face a shortage of suitable applicants when hiring. Although the availability of skills will continue to be a developing picture, employers are making use of temporary and contract workers to help alleviate skills gaps as 42% hired additional temporary or contract staff in the past year, increasing from 38% the year prior. Additionally, 27% of employers have increased use of recruitment agencies and 17% have also increased their marketing activity to raise their profile with prospective candidates.

In addition to the above, employers are urged to consider an increase in upskilling to overcome immediate skills shortages. Positively, employers have indicated an increasing value on the influence training can have in helping towards abating talent gaps, as a quarter (25%) allowed employees study leave for external training compared to just 14% the year prior. As well as a focus on training, employers are encouraged to hire for potential, rather than just experience and invest in internal development programmes. This will not only address skills gaps but also help mitigate the negative impact on employee morale associated with staff shortages by providing the career development opportunities employees are looking for.

Overall, we would urge employers to continue to focus on improving elements such as their employee value propositions (EVP), benefits and training offerings in order to attract talented professionals in a fiercely competitive market. Culture, development and non-salary elements are now key differentiators for candidates.

While the outlook for the coming year is mixed, the market does remain busy and there are plenty of positives in the industry. Employment rates are at an all-time high and employers will need the most talented construction and property candidates if business growth is to continue on a steady trajectory and engaging them with an attractive salary and benefits proposition will be key.

Article submitted by Richard Gelder, Director of Hays Construction & Property

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