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The key risks facing the construction industry

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Image by joffi from Pixabay

The construction industry faces many challenges and risks throughout the supply chain. One of these is the skill shortage which has been caused by Brexit, an ageing workforce and a collective image of the industry which is not attractive to young people. Hence, one of the solutions would be to improve the industry's image among young generations.

Over the last two years construction companies have operated in a very different risk landscape, which continues to bring challenges throughout the supply chain.

 

Those that have weathered the storm so far continue to experience delays and disruption as the Russia-Ukraine crisis adds to the pain caused by Brexit and the pandemic.

 

This article explores:

 

  • The results of research commissioned by Gallagher to identify the key risks construction companies are facing and perceptions on key causes.
  • How the landscape has changed in recent years—the top risks identified by UK construction businesses in 2022 versus the top risks pre-COVID-19.
  • An insight into how the materials and skilled labour shortages are affecting construction businesses of all sizes.
  • How cash-flow problems and Coronavirus Business Interruption Loan Scheme (CBILS) payments are continuing to put pressure on many firms.
  • The rise of cybercrime in the construction industry and the action some business leaders are taking to respond to increased cyber risk.

Concerning skills shortages, there are a few negative effects on the construction industry. As mentioned above, one of the main problems is that it can limit the number of projects businesses can work on, which can impact revenue. Not only this, but it can also create the cost of salaries a challenge because the demand for talent is much higher. A lack of skilled workers costs £32,000 on average per year across firms of all sizes and this is a significant amount.

 

So, why exactly is there a skills shortage? There are a number of factors at play that are causing the skills shortage, which makes it an issue that is hard to tackle. One of the main reasons is an ageing workforce with over 20% of tradespeople being 50+ and 15% being 60%. Research shows that only 3% of people between 18-24 have searched for a construction job and this means this is a cause for concern for the future. Brexit has also been a key factor in why there is a shortage of construction workers as it is harder to recruit EU nationals and many that were already in the UK have left.

 

Solution? It is a worrying time in the construction industry with a skills gap that seems to be getting worse with an ageing workforce and low uptake in the younger generations. Therefore, it is important to attract younger generations to the industry in order to tackle the skills shortage. It is important to break down negative perceptions of the construction industry and demonstrate that it is one that is becoming increasingly diverse with many different types of jobs available. 

 

Original source

 

Skills shortage source