Construction sector facing ‘serious skills shortages’
SOME eight out of 10 building contractors in the North West believe that skills shortages will hold their businesses back next year, with particular concerns over a lack of quantity surveyors, estimators and site based-personnel.
New research from construction recruitment specialist Ionic found that 71% of North West contractors struggled with skills shortages in 2015 – while 83% believe the issue will have a detrimental effect on their bottom line in 2016.
Ionic, which is based in Manchester, conducted an industry perception audit of 50 contractors around the region. The headline findings include some 54% of respondents citing cost inflation for labour/subcontractor rates as a barrier to growth – an issue directly linked to skills shortages.
Martyn Makinson, managing director of Ionic, said: “The New Year will highlight some old anxieties for many regional contractors.
“The construction industry has introduced a range of initiatives this year to try to combat the chronic skills shortages; however, the scarcity of key personnel continues to hold back the sector.
“The health of the construction industry should be a concern for everyone as its problems resonant.
“They impact the cost and delivery of projects from the smallest housing development to HS2 and everything that will come under the Northern Powerhouse vision. The cost pressures are about supply and demand – and the erosion of profit margins for companies which have only just recovered from the recession.”
Ionic also found increased volatility in the workforce. Some 66% of North West building contractors experienced an increase in staff turnover in the last 12 months. In terms of vacancies, 60% reported that the roles were newly created, with the balance replacement role. Just over half 54% said they’d had to make a counter offer to retain staff in the last 12 months.
The pick-up in activity across the property sector is reflected in the results, with 62% of North West businesses bidding up to 25% more projects than in 2014. The residential market led the recovery, cited by 42% of respondents, with 37% also highlighting warehousing/sheds as showing healthy growth.
Makinson added: “People are the raw materials that will help a business grow but competition has returned to the jobs market in a way that impacts the bottom line.
“In a candidate-driven marketplace, construction companies need to present themselves as attractively as possible. It’s also imperative that they sell themselves well at interview stage to prospective candidates by focusing on career and skills advancement opportunities; which from experience are more important factors than a salary increase.”
