Skills crisis or productivity opportunity?

Richard Robinson is deputy co-chair of the Construction Leadership Council and president of AtkinsRéalis UK and Ireland

The recently published (and long-awaited) National Infrastructure and Construction Pipeline sets out £379bn of planned spend over the next decade, including £164bn of investment over the next two years that will require between 543,000-600,000 workers to deliver.

Meanwhile, the Construction Industry Training Board (CITB) forecasts that an extra 225,000 workers will be needed by 2027 to meet UK construction output.

These are big numbers, but they’re not all that surprising if we’re expecting output to grow.

“A reformed construction sector could save £45bn annually by 2035 through enhanced productivity”

The need to attract and retain talent is stark, and the industry continues to work hard to that end. But to get things built faster, cheaper and smarter – and dare I say it, on time and to budget – we’ve also got to meet the skills gap in part by improving productivity.

In the UK there are around 2.6 million people currently working in construction. It’s a significant workforce – similar in size to the industrial and accommodation and food services sectors – and, on average, represents more than 50 per cent of resource used across the construction sector, followed by materials (41.5 per cent) and capital (6.7 per cent), according to the Office for National Statistics (ONS).

In terms of productivity, ONS data also tells us that output per construction worker stands at £35.69 per worker hour, some 13.5 per cent behind the economy average.

The Construction Leadership Council (CLC) has set itself the challenge of closing this gap and its recent Creating a productive environment for UK construction report outlines how a reformed construction sector could save £45bn annually by 2035 through enhanced productivity in how we carry out repairs, maintenance and improvement (RMI), through to the construction of new homes and delivery of major infrastructure projects.

Or, put another way – a more productive environment could actually reduce skills demand.

Digital as the default

To get there, we must think about what the existing workforce needs, as well as new entrants. We must focus on multi-skilling and retraining to enable careers to start earlier and last longer – a life-learning system that not only attracts talent but reskills and re-educates.

And, of course, digital is at the heart of this and must become the default.

Early integrated teams – especially on large projects – must also become the norm. Structuring programmes to bring together all parties at the start to collaboratively develop and agree the design, minimising change and managing risk, could save more than £8bn.

Away from larger construction projects, there’s also much to be gained in improving productivity in RMI, which is very labour intensive. Improved skills and technical competence, down to the ease with which SMEs do business, e.g. logistics, product ordering, accounts etc, could deliver significant cost savings and increase efficiency.

The CLC estimates that workforce efficiency for SMEs across the construction sector could be improved by 5 per cent – with £2.2bn of savings – just by using digital tools to reduce the burden of admin.

And then there’s the adoption of industrialised construction, which we all know can be a real gamechanger through improved onsite logistics, waste and transportation reduction and increased safety. In fact, the CLC calculated that improved onsite efficiency could save the industry around £2.8bn per year.

Again, we need to help the existing workforce make the transition, recognising that a more productive environment could drastically reduce skills demand.

We know this is achievable: we have seen an upward productivity trend over the past five years following 10 years of sustained research and development investment totalling £2bn.

By taking this further and focusing on creating a productive environment to develop and deliver our projects, industrialising the construction process and supporting industry to do business more efficiently, we can target a further 25 per cent improvement. What other industry can offer this?

But delivering this transformative change requires a strong and lasting partnership between the private sector and government, and a shared commitment to act fast.

Only then can we unlock productivity gains and help solve the skills challenge.

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