Leading industry voices are warning that labour shortages caused by new post-Brexit immigration rules are set to hit firms with cost hikes on projects.
Gleeds, a leading industry consultancy warned that government needs to urgently add more construction roles to its Shortage Occupation List
The consultancy firm said the UK could be put back by years if the failure of government apprenticeship schemes to provide enough new workers to replace those from the EU who have left are not addressed.
Construction recruiters, who could be the solution to the problem as they’re well equipped to assist construction firms source skilled and semi-skilled labour quickly, are also urging government to add vital construction workers to the Shortage Occupations List. They also want to simplify the process involved with getting these important workers into the UK.
Paul Donnelly, Commercial Director at leading construction recruitment firm Recruiteasy said: “The optimism and mini-boom being experienced by certain parts of the construction and house-building sectors will rapidly evaporate if the government does not act quickly”.
He added “What is the point of government banging on about construction being vital to national infrastructure and a major driver for recovery if they don’t then allow us to quickly plug the chronic manpower gaps left by Brexit from the easiest market we can get it from, that is, the EU”.
“We simply can’t as a country magic up hundreds of time-served bricklayers or groundworkers or plant operator with more than 3 or 5 years of experience, as rightfully demanded by many of our construction recruitment clients”.
“We need access to these workers from across Europe and easy platforms to help their passage into the UK to keep the construction sector moving post-Covid 19 and post-Brexit”.
Donnelly stressed: “We’re confident the government will be forced to act”.
“For construction firms, this means a well-established relationship with the right recruitment agency will be a key factor in preventing labour-shortage woes from affecting them and enabling them to complete building schedules in a timely fashion”.
Gleeds’ UK executive chairman Douglas McCormick, the former WYG chief executive who joined the firm at the start of last year to head up its UK business, said by barring sufficient labour from entering the UK defeats government’s ‘build, build, build’ agenda.
He added that he expects the issue to come to the fore in the second half of the year if the immediate crisis of the covid-19 pandemic eases.
Over 75% of those surveyed in Gleeds’ Market Report said they did not expect the latest government apprenticeship incentives to fill the gap of worsening labour shortages. Apprentices do not have the one thing construction firms want – experience!
EU workers can come to the UK if their roles are on the government’s Shortage Occupation List. Under the new points-based immigration system, people are required to earn points by speaking English, having a salary of at least £25,600, and a skilled job. The impact on the hospitality and care industries is huge but at least some of their workers are actually listed on the Shortage List. Most construction workers are omitted, which simply does not make sense.
McCormick said the government’s failure to put more construction roles on the Shortage Occupation List while at the same time championing construction as the driver of the UK’s post-covid recovery “defeats logic”.
He said: “I do wonder whether it’s a wait and see policy until the industry is clearly suffering as a result of that but it does seem slightly incongruous when you have a ‘build, build, build’ agenda and construction and infrastructure are underpinning your economic recovery that you would hamper that by not allowing sufficient labour into the country to deliver your own policy.”
Gleeds’ findings come after research by the Construction Products Association (CPA) found that the industry’s EU workforce in the third quarter of last year had dropped by 28% in 12 months.
The number far exceeds the 7% drop in total construction employment across the sector.
In London, where the proportion of EU construction workers was around 28% in 2018 according to the ONS, the number of EU workers fell by as much as 30%.
The Gleeds survey found that nearly three quarters of respondents believed there is a shortage of labour in the UK, with 81% reporting concerns that the post-Brexit immigration rules will inevitably lead to worsening shortages and higher construction costs.
McCormick also warned that government-backed apprenticeship schemes would not fix the problem any time soon: “Government are suggesting that the apprenticeship schemes and the training schemes will create a whole generation of labour. That’s true but that’s going to take quite a long time.
“And so, for the next three to four to five years, how are we going to manage that? I think that’s going to have an impact.”
McCormick said the government needed to add those working in the built environment to the shortage occupation list.
He added: “If the economic recovery of this country is around ‘build, build, build,’ then you need to have the people who know how to do that and if you’re short of them, then the pace will be slower and probably more expensive.”
The Gleeds’ survey also found that labour shortages could accelerate the uptake of modern methods of construction (MMC), with 59% of contractors who responded reporting that their firm’s contingency plans for Brexit included greater use of MMC.
And McCormick said this adaption could eventually bring costs back down: “If you can automate processes and you make the processes more efficient then the costs come back down again.
“So if you reduce the labour content of a process, then it may well be more efficient and cheaper in the longer term.”
The CPA forecast that construction output would rise by 14% this year and a further 5% in 2022 as the sector continues to rebound from its 14.3% contraction in 2020 but this could be much higher if the government quickly tackles the labour shortage issue head on.