Back training and fix falling productivity
Demand for building engineering services is growing at its fastest rate for years, but companies are struggling to find the skilled people to fill vacancies and our productivity is suffering. Tony Howard* says proper support for training is the answer.
Former Home Secretary Lord Blunkett has told the government to “get its finger out” on skills and the Mayor of London Sadiq Khan has promised to build a ‘construction academy’ in an attempt to plug the skills gaps threatening housing strategy. Training and skills are hot political potatoes, but the country’s falling productivity is even hotter.
According to the management consultant McKinsey, the construction industry’s productivity has been falling for 20 years and now costs its businesses and clients almost £15bn a year. The country’s productivity, as a whole, is worse now than it was in 2008.
In construction-related sectors, this has a lot to do with the fact that many of our companies are very small and struggle to invest in the skills needed to adopt new technologies and new ways of working. We also have a huge problem with collaboration – the problem being that it doesn’t actually happen very much.
As a result, many of our projects arrive late and over budget. This has a damaging knock-on effect because potential investors see our projects as risky investments so we struggle to get the finance needed to achieve quality targets – and the downward spiral continues.
The tools that could make us work smarter and, therefore, more productively – Building Information Modelling (BIM); 3D printing; off-site manufacturing etc. – are widely available, but they are not being properly embraced because they require investment to equip the people who would use them with the right skills.
Ironically, the pipeline of work for our businesses is as healthy as it has ever been, but we are struggling to attract people and find the money to recruit, so many vacancies are left unfilled. The global recruitment company Manpower Group says that construction is trying to hire people at its fastest rate in over a decade and that the fourth quarter of this year could be the strongest for recruitment since 2005.
Orders for new infrastructure, housing and remedial work is driving demand, but the company also says most recruiters will end up disappointed because of problems with attracting and retaining sufficient numbers of skilled staff.
There are skills shortages across most trades and at all levels largely because training funding fell off a cliff after the financial crash and today the UK is languishing in 17th place in the investment league table of developed economies.
The construction workforce as a whole has shrunk by 15% since 2008.
This is also partly to do with late payment, which starves supply chain companies of the cash flow they need to invest in people and processes, but it is also a lot to do with the poor profile of the industry. Unless this is addressed, all our politicians’ ambitions around tackling housing shortages and improving our infrastructure will continue to hang in the balance.
The Chancellor Philip Hammond has identified the UK’s faltering productivity as a key priority for the government as it moves towards Brexit, but he doesn’t appear to have made the connection between our industry and the need to support skills.
The government has talked a lot about embracing digital technology to improve productivity, but you need to train the people who are going to use that technology so we can build smarter.
Yet, the pieces are in place. We have the new Apprenticeship Levy and a growing roster of Trailblazer on New Standards apprenticeships – what we need now is full-on commitment from the government to fund training and support the employers who can use them to turn all of this around.
It is crucial that the government honours its commitment – made before this year’s general election – to support training, particularly for SMEs, who must have full access to the funds created by the apprenticeship levy.
Apprenticeships deliver proven business benefits to employers and the wider economy. Research shows 70% of employers believe their productivity, and therefore business growth, is improved by taking on apprentices and every £1 of taxpayers’ money invested in apprenticeships at levels 2 and 3 pays back between £26 and £28 in long-term economic benefits.
Unfortunately, there is currently a ‘race to the bottom’, which threatens to undermine all of this: Employers are being pushed towards training courses that are easier and cheaper to deliver rather than those that provide the skills the industry needs to meet its technical and business targets. They are looking for shortcuts that will get people onto sites more quickly, but not necessarily with the right skills – and definitely not in a way that will improve our productivity.
Many training providers promote lower cost ‘plumbing courses’ at the expense of the wider scoped building services apprenticeships, which can actually deliver “two apprentices for the price of one” i.e. one with a good basic grounding AND a higher specialist skill.
Rather than continuing a process that encourages basic plumbing courses – many from the comfort of their own bedrooms – the government should be heavily promoting the added value apprenticeships that give employers what they need and can help them plug their skills gaps.
The implications are pretty serious: If we can’t meet demand then vital projects may not be completed – and if we seek to meet demand with unskilled labour; quality will continue to suffer.
However, employers need to feel confident about investing in apprentices so it is important to make the point that the low cost option is a false economy. They would receive a far better return on their investment if they enrolled their staff on more technically demanding training such as the new Trailblazer apprenticeships for installer, craftsperson and service & maintenance engineer. Alternatively, they face having to retrain their workers later and out of their own pocket in order to get fully fledged building services installers acceptable to SKILLcard the affiliated CSCS scheme.
There is, however, a definite momentum behind vocational training and it feels like we just need that final push from government to get the funding in place for the employers who can make the whole new system work – not just the privileged few ‘ESFA existing contract holders’ who are able to draw down funding.
The trebling of tuition fees has also put traditional university degrees under greater scrutiny with more young people questioning whether they offer value for money. Despite the increased numbers enrolling at University in September, many are now opting to take the Apprenticeship route towards a useful trade with good career prospects – and avoiding the need to rack up debts of £40,000 plus.
More of our top independent schools are pushing pupils towards vocational qualifications with the number taking Btecs instead of A levels doubling in the past four years. Many school leavers are also being encouraged to go straight into employment via apprenticeships, but with the option to take a degree later as the system now offers that flexibility.
But this is not just about young people. The new funding system is a great opportunity to re-skill; upskill; and move existing workers – of all ages – into areas where they are most needed. In fact, almost anyone at any stage of their career path can now start an apprenticeship, which is a radical and welcome change. It means you can catch people who might otherwise fall through the net and, if they missed some early qualifications, you can still bring them in via the Trailblazer scheme.
How often do we hear of people with really good skills and attitudes who are unable to progress because they don’t have the right qualifications? With the new scheme, you can bring them into an apprenticeship at an appropriate level and, if you find they are good enough, you can accelerate them to a higher level.
BESA is changing the nature of apprenticeships by raising the bar of provision and enabling industry specialists to help employers train their own apprentices.
We are also on the register of Approved Training Providers (RoATP) as Piper Training Ltd, for delivering apprentice training and supporting employers with experienced workers looking for professional assessment so they can add to their qualifications and upskill where necessary.
This is all part of our commitment to deliver a range of training benefits to BESA members and the industry as a whole and to help employers access funding to develop skilled workforces that can grow their businesses. Now we need the government to play its part and release those funds to create momentum and start narrowing both our skills and productivity gaps.
*Tony Howard is training director at the Building Engineering Services Association.