Overview Article - Fostering the demand for a skilled labour force in the construction industry
Overview Article - Fostering the demand for a skilled labour force in the construction industry
Author: Blerta Vula Rizvanolli - Architect, MSc, MBA - IPMA Certified. Assistant professor in UBT and Construction and Energy Project’s Consultant.
Every professional involved in any way in the European construction industry should be well aware of Churchill’s broad concept of the reciprocal effect of the building design and the wellbeing of its users. With carefully selected words he stated that “We shape the buildings and thereafter, they shape us” and we all harmoniously agree.
But isn’t it the same for the industry that we are involved in and contribute to? We shape it with our everyday actions. We have shaped the construction industry, and from now on, it is shaping us and the way we lead businesses and institutions.
The construction industry employs 13 million people in EU27, which accounts for 29,8% of total industrial employment, and the sector is a major driver of economic development which generates 11,1% of the GDP of these countries. This industry answers to a wide range of social and economic challenges, such as digitalisation, design and construction of buildings and infrastructures, renovation and demolition, employment growth, waste, recycling, the environment, and climate change.
How to offer innovative approaches to young generations: problems to solve
Despite the significance of the industry, younger generations do not appear to be attracted to base their careers on this complex sector. But for the stability of the sector and the associated economic and social issues, the construction industry must remain lively and offer innovative approaches to Generation Y and Generation Z.
In spite of the introduction of new technologies, the fact is that the median age of construction employees is increasing every day, and this is a cause for concern and requires immediate action. Around 50% of the actual construction worker pools are due to be retired over the next decade, and there are fewer younger people showing any interest in replacing them by working in this industry. This is mostly because of the following issues:
- Construction industry image,
- Migration of skilled workforce,
- Limited duration of the employment contract,
- Company culture and safe working environment,
- Lack of professional advancement.
Construction industry image
Some 30 years ago, there was a greater emphasis on vocational education, while a college education was highly regarded. Since then, there’s been a devaluing of vocational education and careers and young people pushed towards college. This is mostly due to the earnings gap between academic and vocational backgrounds – 19,0% for males and 21,7% for females.
GenY and GenZ, in great measure, perceive the construction industry as dusty, low paying work that doesn’t grant flexibility and isn’t diverse. These workforce generations are to a great extent focused on computers and business education.
The global pandemic has impacted two different major paths of the construction sector; Firstly, it disrupted the building material supply chains, increasing the lead-times and costs of materials, and secondly it influenced the young skilled labour force and encouraged them to be more selective than ever about their chosen employer.
For younger generations (GenY and GenZ), the main career goals are for happiness, fulfillment, appreciation, and security - which construction industry companies are failing to offer. GenZ is also looking for workplaces that value equity, inclusion, transparency, and communication.
By 2030 Generation Y will represent 32% of the total global workforce, Generation Z – 34%, and Generation Alpha 11%. The construction companies must better prepare to fulfill the younger generations’ needs and deal with their mindset.
Source: https://mccrindle.com.au/article/topic/generation-z/gen-z-and-gen-alpha-infographic-update/
Migration of skilled workforce
The actual development trend in the construction industry is known as the era of Construction 4.0, which generally refers to the architecture, engineering, construction, and facility management industry. Implementation of information technologies will change the management of construction projects due to increased automation of operations. However, the construction industry is still and will be for the foreseeable future highly dependent on a skilled and unskilled workforce. The construction sector needs low, medium, and highly skilled individuals and is the most likely sector in which most of the incoming migrants will be working.
The European Green Deal is anticipated to create close to half a million jobs by 2030 across the EU construction industry, and to address this issue properly a five-year plan has been presented - The European Skills Agenda, which aims to help individuals and businesses to improve and enhance their skills.
A special tool for migrants has been introduced - the EU Skills Profile Tool for Third Country Nationals, which supports early profiling of the skills of refugees, migrants and citizens of non-EU countries who are staying or planning to stay in the EU, and at the same time helps the EU to recognise, match and forecast labour shortages.
The ease of movement of a skilled workforce within European Countries and Developing Countries may result in both positive and negative effects for the countries of origin. In certain circumstances, the migration of highly-skilled workers could incentivise the workforce left behind to invest in their education and increase their own human capital and thereby encouraging regional growth; if the education of the skilled workforce is at the public expense, their movement to other countries would seem as a waste of public expenditure and will be counted as a multiple loss - the human capital, the public money that funded the training, and the later fiscal loss.
Integrating low-skilled migrant workers into the construction industry reduces the employment prospects and wages of low-skilled native workers, while the reverse is true for highly skilled immigrants. High-skilled immigrants increase the receiving country’s human capital stock, fosters returns on physical capital, and may encourage research and innovation that increases the country’s long-term economic growth prospects.
Limited duration of the employment contract
In the construction industry, a project mainly focuses on two things; one is the optimum utilisation of resources and the other is the speedy completion of the project.
Construction workers are faced with an uncertain and seasonal working environment. Few other industries go through seasonal rises and falls on the same level as the construction sector. When construction businesses go through a busy season, workers may feel tired, overwhelmed, and burnt out.
The sector has faced an intensive development after the Covid 19 period, but it is exactly this time which has shifted the employees’ requirements which has resulted in them now searching for working stability. Many construction developments have been terminated during this unusual worldwide challenge, and construction workers found themself in the middle of the road. Considering these difficulties, at the moment highly skilled construction employees tend to work in other industries that offer good salary, working conditions, and career opportunities which are perceived as being the most glamorous and attractive job conditions.
Seasonal Employment Activity – Construction Industry - Source Eurostat
As if seasonal employment was not enough of a challenge for the construction sector, it is also a leading industry for partially or fully undeclared employment. This is defined as paid activities that are lawful but not declared to public authorities. Around 30% of European Citizens have declared that they have utilised undeclared construction services, 48% of whom have done it because of a lower service price.
The European Labour Authority have suggested several measures for employers with the aim of tackling the seasonal employment agreements, such as providing decent working and living conditions, promoting a good working environment and treating all employees equally, ensuring that the permitted number of hours per week are not exceeded and that the employees get enough breaks, providing a holiday allowance, issuing pay slips to the workers, and protecting the employees from risks at work and ensure occupational health and safety.
Source: https://www.ela.europa.eu/sites/default/files/2021-09/Seasonal-work_Guide-for-employers_Print.pdf
Company culture and safe working environment
The construction industry is known as a high-risk sector with many safety challenges. Recent studies have shown that nearly 30% of the workers that are contributing to the sector may be affected by musculoskeletal disorders as a main health issue of bricklayers, plasterers, and joiners.
Nowadays, employees are looking for a workplace where the employer is clearly concerned with safety. However, safety is not only about physical welfare but also about feeling welcomed and valued. The best way to attract the most skilled workforce in the industry is to centre the company’s culture around treating workers well.
The company culture refers to shared basic assumptions, beliefs, and values that provide an understanding of how the organisation functions. This has a significant impact on employees’ behaviour and performance outcomes.
In addition, Total Quality Management (TQM) is proven to be impacted by company culture. Empowerment, employee engagement, teamwork, internal guidance, and support from management as well as customer orientation, continuous improvement, training, and motivation are present in company’s cultures that have been proven to positively affect TQM.
Work–life imbalance is identified as a major detrimental factor in attracting young people to join the industry. To attract GenY and GenZ into the construction industry, there is a need to present a supportive company culture, introduce positive social interactions, attractive remunerations, show evidence of excellent career progression, and build a conducive work environment for skilled trades, clear communication and well-defined targets, and encourage innovation and the use of technology.
Lack of professional advancement
Like in any other industry, the construction sector should invest in motivating and training a skilled workforce. The visionary construction companies that are working on getting ready to implement the holistic approach of Construction 4.0. have already understood that the training and motivation of employees is crucial.
A lack of skilled workers causes poor quality of project performance and higher costs. It can also delay the delivery of projects and can have a negative impact on the successful completion of construction projects. There is wastage of about 7-10% of construction materials due to the lack of skills in workmanship. One of the generally accepted factors that reduces the potential economic growth is skill mismatch, and that requires adequate policy measures at both the national country level and the EU level.
According to the 2015 analysis presented by the European Commission (based on the reports from 25 Member States), there are eight construction workers’ skills underlined as the priority for the industry, i.e., miscellaneous road and network workers, construction equipment drivers/operators, road builders, pavers, civil engineering constructors, electrical network fitters, pipelayers and site managers.
Strategic cooperation between education stakeholders and industry is immediately required. ’Remodeling’ of the university pathways is needed, by adjusting curriculums, streaming towards stronger collaboration with industry, and upgrading them for the 4IR (4th Industrial Revolution). Considering the lack of skilled workforce in construction, it is logical that universities should precede the Construction 4.0 and initialise the phase of University 4.0.
European Pillar of Social Rights Action Plan
The construction industry accommodates around 13 million employees in Europe, and there is a growing concern that the construction workers are getting older, and that younger people are showing limited interest to join the sector. Several reasons affect this issue, such as, construction company culture and industry image, seasonal employment agreement, migration, safe working environment, and a lack of professional advancement.
Each of these disturbances have been carefully addressed in the European Pillar of Social Rights Action Plan which is a European compass for social fairness and inclusiveness for just transitions towards climate neutrality and a digital Europe. On the other hand, the European Skills Agenda through the Pact for Skills and specifically through Pact for Skills in Construction Industry aims to create a networking, knowledge and guidance hub, and tackle the sustainable competitiveness and boost the need for vocational education and training as an individual right that aims towards personal growth, independence, and citizenship.
