Introduction

As we navigate the 21st century, the demands made on the construction and building sector have never been more dynamic, with growing challenges and opportunities due to technological advancement and sustainability goals. To meet these demands the sector must evolve, and at the forefront of this evolution is the essential need for skills development.

The construction industry is increasingly facing shortages in labour across most EU Member States. This trend has become more pronounced in the aftermath of the COVID-19 pandemic, which is intensifying pressure on the labour market and generating a heightened demand for workers. According to the Employment and Social Developments in Europe Report, labour shortages in construction in 2023 are nearly three times higher than levels observed a decade ago. Simultaneously, various national and European policies, such as the EU Green Deal and National Recovery and Resilience Plans, are triggering substantial investment in both new construction and building renovation. Projections suggest that the green transition could result in the creation of 1 to 2.5 million additional jobs by 2030. Consequently, companies must have access to a qualified workforce to meet this growing demand.

Amid a high employment rate in the EU, the challenges extend beyond the need for workers and encompasses workforce mismatches and a shortage of specific skills. The European Construction Industry Federation (FIEC) and its partners in the Pact for Skills in Construction, the European Federation of Building and Woodworkers (EFBWW) and Construction of SMEs Europe (EBC), estimated that despite variations across countries a comprehensive upskilling and reskilling effort for 25% of the construction industry workforce, amounting to 3 million workers, is necessary between 2022 and 2027. Additionally, between 486,600 and 1,549,000 [1]  additional workforce positions will be required in the building construction and energy renovation sector from 2023 to 2030. Approximately 1,259,647 more job opportunities will be necessary to replace the ageing workforce during this timeframe. The Renovation Wave will also demand between 100,250 and 112,056 Occupational Safety and Health (OSH) managers, along with 268 to 5,357 labour inspectors. Notably, investments in energy renovations, as outlined in the Recovery and Resilience plans, are already producing significant employment outcomes within the construction sector and its associated supply chains. 

Considering that the construction sector generates 10.1% of the EU GDP and employs 6.4% of the total EU workforce, the long-term competitiveness of the sector is also at risk. Therefore, both the EU and national authorities must prioritise addressing the challenges of labour and skills shortages. Failing to address these issues will hinder the feasibility of the green and digital transitions at both EU and national levels, compromising the competitiveness of the construction sector.

Skills initiatives in Europe and policy context

In a recent special interview with BUILD UP, Paula Pinho, Director at the Directorate-General for Energy of the European Commission, highlighted the importance of combining traditional and modern skills based on digital technologies for the clean energy transition to respond to the needs of the changing construction and building industry. The EU Year of Skills had the role to raise awareness on this issue which represents the missing point in achieving the EU targets of decarbonisation and clean energy. During this initiative, the Commission has been working with Member States to identify programmes and measures to capture the interest of possible future workforce starting from schools. Industry also plays a crucial role in pooling the right resources and Paula Pinho also gave an overview of the main policies and funds at the EU level, which are explained in depth below.

• European Skills Agenda is a five-year plan to help individuals and businesses develop more, and better, skills. It sets objectives to be achieved by 2025, including:

  • Participation of adults aged 25-64 in learning during the last 12 months (+32% expected increase)

  • Participation of low-qualified adults 25-64 in learning during the last 12 months (+67% expected increase

  • Share of unemployed adults aged 25-64 with a recent learning experience (+82% expected increase)

  • Share of adults aged 16-74 having at least basic digital skills (+25% expected increase)

• Pact for Skills represents one of the flagship actions of the European Skills Agenda and it aims to support public and private organisations with reskilling and upskilling for the green and digital transition. Specifically, the partnership focuses on skills areas such as energy efficiency, circular economy and digitalisation. The Pact can be joined by national, regional, and local authorities, companies, social partners, cross-industry and sectoral organisations, chambers of commerce, education and training providers, and employment services. The members can benefit from three main services:  

  • Networking Hub to find partners and EU tools;

  • Knowledge Hub to follow webinars, seminars and learning activities, while also accessing information on projects and best practices;

  • Guidance Hub to find information about EU funding opportunities.

• European Climate Pact is addressed to EU citizens to make them protagonists of climate action. The pact will support skills for the energy transition and will support educational and training institutions to improve the development and accessibility of green skills programmes.

• European Year of Skills officially launched on 9 May 2023 aims to give a strong push for upskilling and reskilling the European workforce which needs to be ready for the digital and green transition. The European Commission designated 2023 as The Year of Skills to emphasise the importance of upskilling for economic advancement. Transitioning to circular construction practices, which aim to minimise environmental impact, will significantly reshape the labour market. The International Labour Organisation predicts that this shift will eliminate 22 million traditional jobs while creating 29 million new opportunities globally. Four key circular strategies in the construction sector will influence future career paths: smart material management, Product-as-a-Service (PaaS) models, Bio-based material design and manufacturing, and Off-site, modular construction. While many of the necessary jobs already exist, workers may need to undergo upskilling to adapt to new demands. Certain emerging roles, such as digital modeling and sustainable material sourcing, lack standardised solutions. Some tasks will be absorbed by existing specialists, while others will necessitate the restructuring of job roles. Additionally, entirely new occupations and educational programs will emerge to integrate advanced technologies.

• Green Deal Industrial Plan aims to accelerate Europe´s clean technology industries to achieve net-zero emissions by investing in training, upskilling, and reskilling. For the construction industry, it sets a target of at least 25% of the workforce over the next 5 years, meaning that 3 million workers will be upskilled or reskilled.

• EU directives, including the Energy Performance of Building´s Directive (EPBD), Energy Efficiency Directive (EED) and Renewable Energy Directive (RED). In line with to the revised EPBD, skilled workers are required to provide the renovations needed to transform the EU building stock into zero-emissions buildings by 2050. Based on the EED targets, Member States are requested to set up training and certification schemes for installers. The RED specifically foresees the need for Member States to issue certification schemes for installers of solar heating and cooling.

• BUILD UP Skills is a strategic initiative initiated by the European Commission in 2011. The main aim is to support strategic actions (e.g., national roadmaps and stakeholder platforms) and innovative reskilling and upskilling interventions to boost the number of trained and qualified building professionals across Europe to deliver higher energy performance of buildings. The initiative has been supported through open calls for proposals under Intelligent Energy Europe and Horizon 2020 and currently under the LIFE Clean Energy Transition programme. The CORDIS result packs released in 2019, 2021 and 2023 present key projects funded under this initiative. 

Funding instruments

Member States, as well as regional and local administrations, are key in scaling training and upskilling efforts. As also stated by Paula Pinho in our recent interview, there are several EU funds and programmes to foster the upskilling and reskilling for the green and digital transition, including:

• Erasmus + programme particularly supports education and training systems and plays a key role in supporting the acquisition of digital skills and competencies. The programme funded, among other things, the Construction Blueprint project in 12 European countries: Germany, Poland, Spain, Portugal, Ireland, Slovenia, Belgium, Lithuania, Finland, Italy, France, Greece. All project results can be accessed here.

• Interreg Europe has identified and produced several resources to improve skills-related policies through projects and the Policy Learning Platform. Several good practices and policy recommendations have been developed in topics such as skills for innovation, skills for business acceleration, skills in the workplace, and skills for the digital transition.

• LIFE Clean Energy Transition (LIFE CET) aims to facilitate the transition towards an energy efficient and renewable energy-based and climate neutral economy. Projects co-financed under this programme aim to tackle the acceleration of technology roll-out, digitalisation, new services, and business models of the related professional skills on the market.

• Cohesion and Policy Fund has dedicated €5.8 billion to the clean energy transition in digital and energy-related skills development.

• European Social Fund Plus (ESF+) is Europe´s main instrument to support jobs and ensure fairer job opportunities for EU citizens. It can be accessed through national authorities via grants. The main goals are modernising education and training systems, promoting equal access to quality education training, providing flexible upskilling and reskilling opportunities for all, and anticipating new skills requirements based on labour market needs.

• European Regional Development Fund (ERDF), which is managed at the national level through grants. It aims to provide infrastructure and equipment for education and training and develop skills to support the industrial transformation and smart specialisation.

• Just Transition Fund (JTF) can be accessed through grants at the national level and targets skills development, specifically reskilling of workers in regions affected by economic and environmental transition.

• Recovery and Resilience Facility (RRF) is accessible through national authorities (e.g. through grants and loans) and its scope is the development of skills to support green and digital transition and resilience.

• REACT-EU (Recovery Assistance for Cohesion and the Territories of Europe) can be accessed through national authorities (additional resources for the ESF/ERDF 2014-2020). Its scope is the development of skills and relevant infrastructure linked to the recovery from COVID-19 pandemic and preparing a green, digital and resilient recovery of the economy.

• InvestEU is accessible through financial intermediaries (e.g. European Investment Bank Group, implementing partners and financial institutions located in Member States). Concerning skills, the Social Investment and Skills Window (SISW) will cover both the demand and supply side of skills. Targets are students and learners, SMEs and mid-caps, and providers of training.

Other relevant organisations and initiatives

• The European Construction Sector Observatory (ECSO) regularly analyses and carries out comparative assessment of the construction sector in 27 EU countries. The analysis also takes into account the level of skills, including challenges and opportunities.

• The European Centre for Development of Vocation Training (CEDEFOP) analyses skills policies in EU Member States to better understand how to shape upskilling and skills matching policies. They also disseminate best practices and share methodological expertise.

• The European Foundation for the Improvement of Living and Working Conditions (Eurofound) works in different areas and aims to inform effective policies which can lead to recovery and resilience in creating a stronger Europe. The six main topic areas for 2021-2024 are: (i) working conditions and sustainable work, (ii) industrial relations and social dialogue, (iii) employment and labour markets, (iv) living conditions and quality of life, (v) anticipating and managing the impact of change, (vi) promoting social cohesion and convergence.

Conclusion

As the construction and building sector faces increasing demands driven by technological advancements and sustainability goals, the vital need for skills development becomes ever more apparent. The challenges of labour shortages and skills gaps underscore the urgency for comprehensive upskilling and reskilling efforts of the EU workforce. Projections indicate a significant need for additional workers, particularly in the context of the green transition and renovation initiatives. Failure to address these challenges not only threatens the long-term competitiveness of the construction sector but also risks impeding the progress of vital transitions toward digitalisation and a climate-neutral future.