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Labour market feeling the heat as industry rebounds

The speed of the economic recovery is already revealing cracks in the building services labour market, according to the Building Engineering Services Association (BESA).

BESA’s director of training and skills Helen Yeulet

During a webinar hosted by the Association, recruitment experts warned that without significant investment in upskilling existing workers and adding to the sector’s headcount the industry would struggle to keep pace as the industry bounces back from the pandemic.

They said demand for skilled labour was surging because the engineering and construction sectors were accelerating faster than expected. Brexit is also squeezing the labour market and exacerbating skills shortages that had been building up in the years before the Covid crisis.

“If we don’t do something dramatic about upskilling over the next three to five years we will simply not have a workforce capable of taking on the work created by the economic recovery,” said BESA’s director of training and skills Helen Yeulet.

She cited a study carried out by the consultancy McKinsey in 2017, which showed that 14% of the workforce would need to be completely reskilled and 40% at least partially. “And that was long before we had a pandemic,” said Yeulet.

Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), told the webinar that employers tended to be more pessimistic about the economy as a whole than prospects for their own businesses.

Reluctant
“This is reflected in recruitment. People are much more willing to hire compared with a year ago,” he said. “Employers are seeing growing demand, but they were reluctant to hire permanently because of the overall state of the economy. This led to a surge of firms taking on temporary staff, but we are now seeing permanent hiring starting to pick up too.”

The REC reported 1.29 million active job vacancies in late March, which is more or less the same as a normal year for the UK. Despite the impact of the worst recession in 200 years, the Bank of England is forecasting peak unemployment at around 6.5% which is lower than after the crash of 2008/9. Carberry also believes this is likely to prove pessimistic.

“However, the challenge for employers is not so much about unemployment but about transitioning people into the areas where there is demand,” he said. “For example, retail will never get back to where it was and it was already shrinking before the pandemic, but areas like engineering and construction are recovering strongly. We need to find a way of transitioning people into those areas where there is an acute skills shortage,” he added.

However, the mass retirement of the ‘baby boomer’ generation will shrink the pool of skilled and experienced people by as much as 50% during this decade, according to Carberry.

Richard Snarey, executive director PRS Recruitment, also told the BESA webinar there was an acute shortage of blue collar trades people, but that had been the case for at least 20 years. This means employers need to reach communities where they have not traditionally hired and make use of recruitment marketing to broaden their appeal.

He said young people, in particular, were looking for a career where they could make a mark on the world and building engineering was a good option – it just needs to sell itself better. He has been working with BESA to develop a new jobs board where employers can post their vacancies free of charge for the first six months.

There are already more than 3,000 vacancies listed on this newly launched platform, which will consolidate all the relevant jobs in the sector in one online space. It will also provide a two-way online chat service between candidates and employers to speed up the recruitment process.

The BESA Jobs Board is part of a wider strategy for improving access to careers in building engineering and for attracting a new generation of skilled workers, according to Snarey.

“It is important to articulate what you as an industry and as businesses are trying to achieve. What are we enabling and how are we making a difference? That helps you appeal to that broader demographic,” he said.

Ageing
Yeulet added that this was crucial because building engineering firms will also need a much wider range of skills – particularly in digital and creative areas. “We now have an even smaller pool in which to fish so need to make our sector more attractive,” she said.  “Our ageing population and ageing workforce means we are having to compete harder for the best people.”

The competition for skilled labour could also increase the proportion of directly employed people in the sector, according to BESA. This is also being driven by changes to the tax rules for the self-employed with the introduction of the new IR35 regulations, the webinar heard.

“We find that most employers are doing a deal to keep their best people so many are taking them into the workforce and swallowing the cost,” said Carberry. “The trend is definitely towards bringing people onto the payroll.”

Yeulet commented that this could also help to improve the skills picture. “At BESA, we think direct employment is the best way to recruit more skilled people and to upskill the people you are already working with. It is much better than keeping people at arm’s length just to save money.”

 

19 April 2021

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