Market Intelligence: Talent in Construction

Please note: Sources for all data cited in this article can be found in this presentation.

On Tuesday 8 October 2019, Nottingham Trent University (NTU) hosted the fifth workshop in our series of sector-focused workshops, with Market Intelligence: Talent in Construction.

The workshop, delivered by Gradconsult, saw in-depth discussions and dialogue between representatives from companies in the construction industry across Derby, Derbyshire, Nottingham and Nottinghamshire (D2N2) on the topics of:

• the state of the graduate market nationally and locally
• key challenges for the sector over the next five years
• the skills, knowledge and behaviours businesses need graduates to have
• challenges faced by SMEs in recruitment and retention
• how NTU can work with local business to help address the above and ensure our talent pipeline meets the future needs of the industry

The graduate market nationally

To begin with, data shows there are not enough young people entering the workforce. This leads to more vacant jobs than there are graduates to fill them as older workers retire. Brexit may complicate this due to a reduced migrant workforce.

However, at the same time, graduate unemployment is at its lowest since 1979 at 5.1%, and 87.5% of graduates are satisfied with their careers after three-and-a-half years.

In the UK, the graduate market is not regulated in the same way as other countries such as Germany or the USA, meaning the provision of university degree places is not linked to workforce requirements, creating a highly non-linear graduate market. This means that many graduates undertake careers in roles that are not directly linked to their area of study.

When considering their prospects, 48% of final year students are still undecided on their future career and are therefore open to influence from business.

While the perception is that a high proportion of graduates will be drawn to London, the majority (69%) actually go to work in the region where they grew up, with a further 13% moving away to go to university and staying there. What may be surprising is that London is the only city in the UK where there is an oversupply of graduates. However, business students have shown an increased willingness to travel for a job.

Additionally, despite a rising perception that degrees don't offer benefits in the same way they used to, those with a degree still earn significantly more than non-graduates over their working life, with undergraduates and postgraduates earning £10k and £16k extra per year respectively on average.

According to the Destination of Leavers from Higher Education (DLHE) data, average starting salaries for graduates going into construction stands at just under £25,000 per annum. The Institute of Student Employers (ISE) looks at the wider construction and built environment sector where average salaries start at just over £27,000 per annum.

Gender balance continues to be an issue in the construction industry generally, with just 0.9% of workers in core construction and building trades being women. However, this rises to 35%+ in areas such as conservation and the environment and in management roles. Engineering and architecture sits somewhere between 10-20% women employees.

The graduate job market locally

Some key facts about the graduate market in Nottinghamshire and Derbyshire are that:

• there are a lower proportion of managers, directors and professional occupations available in both Derby and Nottingham compared to the UK nationally, although Derby fares slightly better.
• Nottingham comes in at 7th-best UK city for disposable income when comparing graduate starting salary to cost of living
• Derby tops the table in the same study, although this figure may be attributed to the increased proportion of high-value engineering companies resident in the area
• the East Midlands has the lowest proportion of residents with a degree in the UK, leading to more demand for skills, but also creating a potential barrier to development and progression

To help attract top talent, businesses can apply and champion these positive messages through their attraction and recruitment of talent in the area, collaborating with NTU to help further advance prosperity and opportunity within the local area.

Key challenges over the next 5 years

Gradconsult initially presented some challenges that their research has found to be true across the construction industry that was discussed by the businesses at the workshop.

Ageing workforce

More than a fifth of the construction workforce is 50+, so the industry needs to attract talented graduates. It was felt by many attendees that an influx of skilled, younger graduates could revolutionise the industry through new ideas and approaches, but the culture often stifles them.

Brexit

The industry relies heavily on skilled European (EU) workers more than other sectors, so planning for future projects is more difficult. Businesses also fed back that they still don't know the long-term impact on availability and costs of materials which can have a huge impact on forward-planning.

Image

Younger workers may be put off by the public perception of the industry as male-dominated with a lack of diversity.

Productivity

The industry has failed to improve poor levels of productivity over the last 20 years, but embracing new technologies could help to solve this. The attendees felt that there was a huge mixture in efficiency across the sector which can put extra pressures on smaller subcontractors in planning and cashflow.

It was also acknowledged that there could be a much better use of technology in the industry to be more agile on site around designs, technical drawings and project management.

Skills shortages

Around a fifth of vacancies are not properly filled because employers can't find candidates with the right skills and qualifications. Between different experts there is also often a lack of a connect, for example architects and designers don't always have the practical understanding of on-site considerations.

Approaches such as modular construction and automation will also continue to grow, leading to additional skills requirements.

National initiatives

In addition to the above challenges, there are also some specific challenges to be faced by the industry around national initiatives. For example, construction companies will be affected by external programmes such as the Help-to-Buy scheme and the zero carbon initiative, both of which are considerations in many construction projects going forward.

A workshop attendee filling out a graduate attraction plan

Recruitment challenges

In addition to factors discussed above such as Brexit, the image of the industry, and the ageing workforce, the following were identified as recruitment challenges in construction.

Uptake of the profession

There are a number of reasons for issues affecting uptake of the profession:

• Following the 2008 recession, the industry suffered a big hit which impacted on recruitment and still being felt.
• The UK doesn't have a linear higher education profession, meaning that the number of university places to study doesn't directly correlate with industry demand
• The UK is also currently experiencing a demographic dip in 18-year-olds at present, and therefore new recruits coming into the industry, but this is likely to spike again in the next 5-10 years.

Changing roles and lack of awareness

Existing roles have seen a large amount of change over recent years, for example while quantity surveyors are in very high demand, their responsibilities are not the same as they have traditionally been.

As many businesses are operating in a leaner commercial environment, quantity surveyors now also take on additional responsibilities such as assessing contracts. They are also now more valued for their numerical skills than their construction knowledge.

It was felt that many graduates may discount construction as an option before fully understanding it. The pace of change is increasing and it may be the case that many jobs in high demand 10 years from now, do not currently exist. Many businesses have also experienced graduates expecting unreasonable salaries as a new graduate, as they are aware of the demand for the skills of roles such as quantity surveyors.

Other skills requirements

The workshop attendees also identified a range of additional skills they would like to see:

• Professional competency with Excel
• Appreciation of legal issues
• Team working
• Time management
• Negotiation

It was stressed that businesses should understand their responsibilities when taking on a graduate and should not expect a fully-formed employee, they must also receive support and nurturing. For example, while commercial awareness is a highly-valued skill, it is acknowledged that this cannot be achieved without proper work experience opportunities.

For advice on recruitment, including attraction, selection and retention, email talent@ntu.ac.uk.

The NTU talent pool and how SMEs can get involved

NTU currently has over 1,300 undergraduate and postgraduate students on construction-related courses in the 2018/19 academic year. These come from a range of degree discipline clusters including construction management, quantity surveying, project management, civil and structural engineering, and building surveying.

Businesses can also take advantage of degree apprenticeships in many of the above field. As an SME they may also be able to take advantage of 95% funding dependent on eligibility.

In addition to this, there are a range of short and professional courses available covering areas such as leadership and management, such as the Women in Leadership course offered through the Priority Skills for D2N2 SMEs project.

There are plenty of opportunities for businesses of all sizes to engage with students from NTU. A seleection of these opportunities include:

Employer events and fairs

Our fairs can be a great way to engage with current students or recent graduates. Examples include:

• Property, Design and Construction Jobs Fair – 24 October 2019, 11am-3pm
• Women in the Built Environment – 14 November 2019, 5-9pm
• Architecture Exchange – 3 February 2020, 5-9pm

Live projects

Live projects involve setting students a challenge to solve a particular business problem.

Degree shows

Aimed at design-based subjects, e.g. architecture, architectural technology, interior architecture and design, and product design).

To explore any of these options, or to access other support around recruitment, contact the Employability team at NTU at  talent@ntu.ac.uk.