Why upskilling is key for construction in turbulent economic times

With the demands of the construction sector changing, we are seeing a skills shortage that is slowly growing and becoming increasingly concerning over time.

Engineers looking at drawings Today’s construction professionals must be adaptable and future-ready. Photo: Adobe Stock

The unpredictable nature of today’s markets has been influenced by various factors, such as ongoing geopolitical tensions and economic uncertainties, as well as technological advancements – all of which present unique challenges for businesses across different industries.

Reports have shown that more than two million workers will be needed in the construction sector in Europe by 2030. This is down to a mix of factors, with investments in green construction creating additional jobs along the construction supply chain, as well as talent leaving due to the workforce reaching retirement age.

Recent reports claimed EU construction production was at the same level in June 2023 as it was during the same period the previous year. Firms still had a healthy backlog of work, with guaranteed projects at the beginning of the third quarter of 2023, but the turbulent market hasn’t helped.

As a result, we are starting to see this impacting the industry, with construction businesses throughout Europe reporting an activity decline, mostly due to soaring costs, increasing interest rates and material and labour shortages.

Construction under pressure

This knock-on effect has resulted in home buyers and the private sector being reluctant to invest in new premises due to the weaker economy, high interest rates and increased building costs.

With more people opting to work from home, the private sector is not as eager to invest in new commercial buildings, for example, resulting in the office building sector seeing a decline in issued permits.

This slowdown in investment and ongoing uncertainty has resulted in many construction businesses declining, not gaining the profits they need and having to let people go.

This is evident when we look at bankruptcies across Europe, with data showing the number of insolvencies of contractors steadily increasing, slowly reaching pre-Covid levels in many EU countries. In Belgium, for instance, it surpassed this level in the second quarter of 2023.

At the same time, the drive to boost sustainability has meant more innovation needs to occur at a rapid pace – to not only remain competitive, but also to fit in line with government and EU plans.

Balfour Beatty is an example of this, with its subsidiary (Balfour Beatty Vinci) completing a successful trial of a digital measuring system for concrete leading to a roll-out of the product across multiple HS2 sites in the UK.

Diesel Progress Summit Forward-thinking employers are seeing the benefits of ensuring their staff are up-to-date with industry trends. Photo: KHL

By investing in innovation, it worked toward driving efficiencies on a longstanding construction project. There is space in the sustainability area for such innovation, but with the construction industry already struggling with investments, being able to expand to offer such solutions becomes an even bigger challenge.

A strong way to remain resilient during this time, is to ensure the staff you have are equipped with the skills they need to futureproof your business. Naturally, this is easier said than done, especially when investing in your own organisation takes a back seat when simply trying to remain in business. Nonetheless, by fostering a culture of continuous learning and development, organisations can navigate the challenges of a volatile market with greater confidence and agility if they begin to implement a growth mindset sooner, rather than later.

Why upskilling is important now

Like other industries, construction is undergoing a digital transformation, with the integration of technologies such as Building Information Modelling (BIM), drones and automation. Upskilling is necessary to ensure workers are comfortable using such technology, to not only enhance efficiency, accuracy and safety in construction projects, but also to drive the innovation needed to survive in this market.

But the benefits of offering upskilling do not stop there. When we look at the statistics, it’s clear that learning and development (L&D) is a good driver for business survival, with 79% of L&D professionals agreeing it is less expensive to reskill a current employee than to hire a new one.

This not only works well in supporting staff retention, but will also ensure businesses save money in the long run. With the construction sector suffering the impact of an ageing workforce, degree apprenticeships can also ensure those in senior roles can advance in their career, while on the job.

This keeps people within the sector and opens doors for those who previously did not have access to higher education and will, therefore, help to drive a diverse workforce through the managerial hierarchy.

A changing environment

With many changes occurring to meet sustainability requirements and net zero targets, the EU has imposed new regulations on European countries, that not only relate to construction safety, but also to sustainability and quality.

Stacey Hayes-Allen, Arden University's director of corporate partnerships Stacey Hayes-Allen, Arden University’s director of corporate partnerships. Photo: Arden University

Working alongside a credible educational institution, upskilling can help workers stay informed and compliant, which will reduce the risk of accidents and help companies maintain high standards. On top of this, however, it will also ensure those within the industry are looking ahead and are ready to address investor or client needs when it comes to future-proofing their project – again, this will help businesses in this area to stand out, which is vital in an everchanging economy.

To try and plug the skills gap, upskilling works as a strong incentive to draw people in. Offering a degree apprenticeship here is a good way to go about it, as it will allow people to study while gaining experience, but also cover university fees – an aspect which is growing in importance for the younger generation as they battle a rise in costs and inflation.

A career in construction isn’t a career path that everyone finds attractive – some assume it offers a small pay cheque, a lot of heavy labour and stress, and for some roles, the time away from family and friends makes it less appealing.

Specialist apprenticeships can also play a vital role in keeping the widening skills gap at bay. In the current age where social and technological developments are occurring rapidly, resulting in the labour market needing to evolve and adapt at a quicker pace, businesses should tap into tailored learning and development schemes to keep employees happy and upskilled, and keep businesses growing.

To support this further, companies that have workers who are studying have better revenue growth, profit, market share and customer satisfaction than their competition.

On top of this, they are twice as likely than their low-performing counterparts to indicate their workforces are ready for the future.

The majority of employees (74%) surveyed by PwC stated they are ready to learn new skills or re-train to remain employable in the future, with 90% of workers saying they need to update their skills at least yearly.

In a market where things are continuing to change thick and fast, it’s vital construction businesses begin looking at investing in their current workforce to not only survive, but to thrive.

About the author

Stacey Hayes-Allen, director of corporate partnerships at the UK’s Arden University, which provides degree courses in, among other things, engineering management and human resource management.

For more information, visit: www.arden.ac.uk


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