Much like the cost-of-living and BOE interest rates, the trade skills shortage continues to hit small businesses hard, with expectations of the problem to continue into 2024.
From November 2022 to January 2023, compared with the period before the pandemic from January to March 2020, construction vacancies are now 65% higher.
But what is behind the shortage, what is the government doing about it, and what can you do about it?
It makes sense to explain that the shortage of builders is due to a combination of factors, including:
Aging workforce: The construction industry has an aging workforce, with many experienced workers approaching retirement age. Simply put, there are not enough young workers entering the industry to replace those who are retiring.
Brexit: The UK’s decision to leave the European Union has made it more difficult for construction companies to hire skilled workers from abroad. Many European workers have returned to their home countries, and there are fewer new workers arriving in the UK.
Pandemic-related disruptions: The COVID-19 pandemic has caused disruptions to the construction industry, including delays in projects and difficulty in sourcing materials. This has led to a slowdown in the industry, which has further reduced the number of workers needed.
Low pay and poor working conditions: Many construction jobs in the UK are low paid and offer poor working conditions, which has made it difficult to attract and retain workers.
Lack of training and apprenticeships: There has been a decline in the number of apprenticeships and training programs offered in the construction industry, which has led to a skills gap and a shortage of qualified workers.
What is the government doing about the trade skills shortage?
Construction has recently rightly been lauded by government and the Prime Minister as central and vital to the UK’s recovery.
Overseas bricklayers and carpenters could be able to get work visas more easily in the UK after the government updated its shortage occupation list. The list, which now also includes roofers and plasterers, highlights occupations that employers are struggling to fill. And interestingly, the change in construction workers is not expected to make a major difference to overall migration figures.
Government advisors in the Migration Advisory Committee (MAC) looked at 26 occupations in construction and hospitality, stating that Brexit and the pandemic had ‘significant effects’ on both sectors. People on the shortage occupation list can now apply for a skilled worker visa work in the UK.
The five occupations approved by the MAC are:
- Bricklayers and masons
- Roofers, roof tilers and slaters
- Carpenters and joiners
- Construction and building trades
The committee said its review was based on whether an occupation made up more than 0.5% of the sector workforce and earned below the current general threshold for migrants, which stands at £26,200. It also considered the “strategic importance of construction for the UK economy” and how its workforce was likely to change in the next decade, with “demand likely to increase markedly”.
According to recruiteasy.co.uk, Construction employs about 3 million people and its output in the UK accounts for more than £125 billion or 10% per annum contribution to GDP. It is predicted that labour shortages will worsen substantially as the recovery gets under way. Many industry leaders have continued to urge government to act quickly to prevent the economy from stalling.
There are complaints that the government isn’t acting fast enough and isn’t taking the issue seriously enough and could be banking on repurposing workers from other sectors, such as retail, to help stem some labour shortages in construction.
How can you minimise the impact of labour shortages?
Wages have risen about 6% as a result of a shortage of skilled tradespeople, including carpenters, groundworkers, bricklayers, plasterers and plant operators in the wake of Brexit and exacerbated by the pandemic, according to figures from the Department for Business, Energy and Industrial Strategy.
It’s clear that pay is taking the lead in terms of loyalty, during a time when it is becoming harder and harder for a small business owner to manage increased costs against our economic backdrop. So, how can you address some of these issues?
- Compare your work hours to similar businesses.
- Can you increase starting salaries?
- Offer free employee training including apprenticeships.
- Offer a benefits package, whether Perkbox or a simple healthcare cash plan.
- And protect your own business from financial risk with liability insurance, and if you do employ people, make sure you obtain Employers Liability Insurance.
We are here to support our trade clients, so please do reach out to your friendly business branch who will happily check your business or van insurance, to make sure you are correctly covered, and neither over- nor underinsured.