BUILDING FUTURES ON SHIFTING FOUNDATIONS
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1 CONSTRUCTION BUILDING FUTURES ON SHIFTING FOUNDATIONS AN INDEPENDENT SURVEY INTO THE CURRENT AND FUTURE REQUIREMENTS OF SKILLS, EDUCATION AND TRAINING IN THE CONSTRUCTION INDUSTRY. 1
2 FOREWORD BUILDING FUTURES ON SHIFTING FOUNDATIONS Identifying challenges for the construction industry appears to be easy, with no shortage of comments and statistics about the state of the sector of late. Countering such challenges with compelling and realistic solutions however is more difficult. The timing has never been so relevant. According to the latest report from the Office for National Statistics, construction output has grown 4 percent from July 2012 to July 2013 the strongest growth in output since December George Osborne has also pledged 100billion worth of infrastructure investments which will directly benefit the construction industry. However, the impact of the recession has been deeply felt, with many companies reducing their training and apprenticeship programmes to reduce their overheads as a result. In fact, the latest data from the Skills Funding Agency shows that despite overall annual apprenticeship enrolments increasing 77% in the last 3 years, construction apprenticeship starts decreased by 6% in the same period. This begs the question: How will we equip ourselves with the skilled workers to support sustainable growth in the industry? At City & Guilds, we want to ensure a bright future for the construction industry an industry that we have worked with and supported since we were established 135 years ago. We want to understand the views of the industry on both the immediate skills agenda and the future vision for growth. That s why we commissioned this bespoke survey: Building Futures on Shifting Foundations which seeks to directly uncover the challenges presented by the changing landscape of the construction industry. By involving leading businesses and education providers, we have obtained valuable insights. This will help to shape the overall recommendations for our construction offer in the months and years to come and help us define how City & Guilds can help the industry to meet the aspirations of the Government s Construction 2025 report, which you may have already read. The report outlines the need to change the image of the construction industry as a whole, to inspire more youngsters. I couldn t agree more. As Chairman of the Olympic Delivery Authority, I have first-hand experience of some quite phenomenal construction projects which would captivate the imagination of an entire generation. The only way to leverage such schemes is through partnerships between employers, education providers and the learners themselves. Together we can help today s learners to become the construction leaders of tomorrow. Sir John Armitt, Chairman of City & Guilds 2
3 VOCATIONAL TRAINING GIVES PEOPLE A SENSE OF SELF WORTH, WHICH MEANS THEY GIVE BACK TO SOCIETY. SIR JOHN ARMITT, CHAIRMAN OF CITY & GUILDS 3
4 METHODOLOGY This independent survey was undertaken by Research by Design, a market research consultancy. It presents the findings of an online questionnaire completed by colleges and training providers, as well as businesses from across the construction industry. The purpose of the survey is to reflect opinions about the opportunities and challenges facing the construction industry including the recognised skills shortage, changes proposed to apprenticeships through the Richard Review and future ambitions for industry growth. The total sample size of 344 respondents consisted of 168 senior managers from construction businesses and 176 education providers, all of whom deliver construction qualifications. The fieldwork took place during September 2013 and involved an online survey, which was further supported by telephone interviews with representatives from the industry. Research by Design is an independent market research, planning and analysis consultancy, located in Birmingham, serving a variety of B2B and B2C clients across various industry sectors. It strictly adheres to the UK MRS Code of Conduct. 4
5 AS WELL AS SEEKING VIEWS ON THE LONG-TERM VISION AND 2025 STRATEGY, THE SURVEY ALSO ASKED RESPONDENTS ABOUT ISSUES THAT THE CONSTRUCTION INDUSTRY IS CURRENTLY FACING A KEY ENABLER TO GROWTH WILL BE TO OVERCOME SUCH CHALLENGES. 5
6 THE FUTURE OF THE CONSTRUCTION INDUSTRY OPPORTUNITIES FOR GROWTH CAN ONLY BE REALISED IF YOUNG PEOPLE ARE TRAINED IN SKILLS WHICH WILL MEET CURRENT AND FUTURE INDUSTRY AND ECONOMIC NEEDS. CHRISTINE TOWNLEY, EXECUTIVE DIRECTOR OF CONSTRUCTION YOUTH TRUST 6
7 CONSTRUCTION 2025: AN AMBITIOUS GROWTH STRATEGY WITH POSITIVE ASPIRATIONS Construction 2025 is a joint strategy between Government and industry released in June 2013 that sets out how Britain could be at the forefront of the global construction industry in the future. The strategy outlines that the global construction industry is set to grow by 70% by 2025, a target that 73% of respondents to our survey believe to be unrealistic. Despite the ambitious growth targets, generally respondents were very positive about the focus of the strategy and the five main areas of concentration; CONSTRUCTION 2025 ASPIRATIONS % AGREED THIS WAS THE RIGHT FOCUS People: an industry that is known for its talented and diverse workforce 91% Smart: an industry that is efficient and technologically advanced 93% Sustainable: an industry that leads the world in low-carbon and green construction exports 79% Growth: an industry that drives growth across the entire economy 91% Leadership: an industry with clear leadership from a Construction Leadership Council 76% However, each of the above aspirations also presented challenges, and People was universally acknowledged to be the area that respondents felt represented the greatest challenge to the industry (37%), followed by Growth (21%). Furthermore, not all of the targets set out in Construction 2025 were deemed to be achievable; 39% felt that the industry would not be able to lower emissions by 50% 59% believe it is unrealistic that there will be a 33% reduction in the initial cost of construction and the whole life costs of build assets Half stated that it seemed unlikely that there will be a 50% reduction in overall completion times from inception to completion, for new build and refurbished assets 54% believe that they will have to change the skills within their business to meet the long term ambition of increasing off-site fabrication. 7
8 DEVELOPING AN INDUSTRY EQUIPPED FOR GROWTH The survey identifies that there are a number of core skills viewed as being crucial to driving growth in the construction industry, including; construction management, specific trade skills, commercial awareness and architectural/design skills. The most important skill identified was leadership with 95% of respondents deeming this as important. BIM (Building Information Modelling) was cited as being the least important skill with only 23% respondents selecting this as being very important to growth. Furthermore, for employers considering their current workforce, respondents felt that staff do not always have the right level of skill to do the job, with 86% citing an overall skills gap in the industry, mirroring research by the Chartered Institute Of Buildings (CIOB). THE MAIN SKILL AREAS THAT RESPONDENTS FEEL RECRUITS WERE FOUND TO BE LACKING ARE; Trade Skills - 42% recognising a skills gap Maths and English - 39% recognising a skills gap ATTRACTING THE RIGHT PEOPLE Attracting the people with the right skills to the industry still poses a problem. Work experience can go some way to showing people what a career in construction is really like and is a key component of many study programmes. However, opportunities in the industry are extremely low. Nearly two thirds (61%) of businesses admitted that they had not offered any type of unpaid work experience in the past 12 months. TACKLING THE NEGATIVE IMAGE OF CONSTRUCTION City & Guilds latest Career Happiness Index (Millennials Edition) also reinforced the view that there are still negative perceptions of working in the industry with construction deemed to be the least satisfying of all professions. Problem Solving - 35% recognising a skills gap Technical Skills - 31% recognising a skills gap. 8
9 OUR WORKFORCE IS NOT OFTEN SEEN AS COMPETENT AND HAVING EXCELLENT SKILLS. WHEN COMPARED WITH OTHER COUNTRIES, WE ARE LACKING IN QUALIFICATIONS, ASPIRATION AND A DRIVE TO SUCCEED. THERE ARE MANY TALENTED CONSTRUCTION WORKERS AND THIS WILL NEED TO BE HIGHLIGHTED TO ENSURE THAT THE FACE OF CONSTRUCTION CHANGES IN A POSITIVE WAY. SURVEY RESPONDENT 9
10 THE IMPORTANCE OF APPRENTICESHIPS There is wide scale acceptance of the vital role of apprenticeships in driving industry growth. Earlier this year, the CIOB skills survey revealed 90% of respondents felt construction apprenticeships are key to fixing the skills gap in the industry. Our survey suggests however that there is still work to do in boosting employer uptake; 42% of businesses stated that they currently employ no apprentices 40% revealed that apprentices made up less than 1% of their workforce Just over half (56%) stated they do not plan to take on any apprentices in the next 12 months. The biggest barriers to taking on an apprentice were identified as funding issues and uncertainty around my firm s workload with approximately a third of business respondents citing these as challenges (36% and 31% respectively). The greatest incentive for taking on an apprentice was financial support as stated by 70% of all businesses. With regards to using the current Construction Levy to provide training, almost half (45%) of businesses felt the current system works well and just 4% stated the levy makes it a lot harder to offer training. PUTTING POWER IN THE HANDS OF EMPLOYERS The Government has an on-going commitment to apprenticeships and will, this Autumn, unveil how it will implement the recommendations of the Richard Review. One of the recommendations is that the purchasing power for investing in apprenticeship training should lie with the employers. There was a difference of opinion about how the funding for apprenticeships should be managed. Employers were supportive of change. Only 23% of businesses feel that current funding methods are appropriate and 78% of businesses believe they should receive funding for apprenticeships. However, the vast majority of education providers (85%) believe the funding should continue to be channelled and managed through them. Regardless of which option is adopted, both employers and education providers expressed concerns about the possible bureaucracy associated with the proposed changes. Those working in education have the greatest level of apprehension regarding the transfer of funding, with 86% of providers stating concerns. Of those concerned; 72% cited that employers are not the experts in vocational qualifications 40% also had concerns about the processes required to receive payment from employers. 10
11 MANY OF THE REFORMS COULD BE CLASSIFIED AS INTERVENTION STRATEGIES. THEY ARE DESIGNED TO FIX THE CAR (THE SYSTEM) RATHER THAN HELPING THE PEOPLE TRAVELLING INSIDE IT; THE STUDENT, TEACHER AND EMPLOYER. RAY DOWD, PRESIDENT OF THE BRITISH ASSOCIATE OF CONSTRUCTION HEADS For employers, the main issues for those who expressed concern with the shift of funding were the processes required to request funding from the Government (49%) followed closely by managing the recruitment process (37%) and administration (34%). While 49% of respondents had not heard of the Richard Review, more than half (56%) agreed the Richard Review is important to the future of the construction and building sector, with more education providers agreeing with this statement (71%). RICHARD REVIEW The Richard Review is an independent report written by Doug Richard to review the current apprenticeship system and identify how apprenticeships can meet the needs of the economy in the future. It sets out a number of proposals for reform to the design, content and funding of apprenticeships. 11
12 THE DEMAND FOR BENCHMARK INDUSTRY STANDARDS SUPPORT FOR A SINGLE APPRENTICESHIP STANDARD The majority of all respondents (72%) agreed that the recommendation in the Richard Review to create one single apprenticeship standard per trade would benefit the construction industry. And 81% of all respondents agreed that the business community should take more of a lead in designing apprenticeship standards, with 68% of employers strongly agreeing with this statement. However, there were numerous challenges identified from creating a single apprenticeship standard; Of those who expressed concerns, the main issues were a perceived lack of flexibility to suit employers needs (74%) and learners needs (57%) Businesses specifically expressed concerns around the limitations to the depth of experience an apprentice would gain (69%) and the lack of specialist skills (50%). The majority (57%) of all respondents also stated that a key requirement of an apprenticeship should be that the programme lasts between two and three years, not the current one year minimum. LICENCE TO PRACTISE Licence to practise is an issue often raised in the context of the construction industry. Certain trades within the construction industry already require a licence to practise, however our survey reveals a demand for a recognised industry standard across all trades. Indeed, 64% of all respondents supported a licence to practise across all construction trades, with both employers and education providers supporting this in equal measure. Almost a quarter (23%) felt that only some trades required a licence to practise, while just 8% said that there is no need for a licence to practise in any construction trade. A number of benefits were highlighted by those who supported a licence to practise, with 65% stating it would ensure a minimum level of skill, and 43% also believing it would provide protection and assurance for end customers. 12
13 A LICENCE TO PRACTISE COULD CONTRIBUTE TO THE BALANCE OF PAYMENTS CHALLENGE IN THE CONSTRUCTION STRATEGY AS WELL AS HELP BANISH THE COWBOY BUILDERS ON THE DOMESTIC MARKET. IAN BILLYARD, PRINCIPAL OF LEEDS COLLEGE OF BUILDING THE NEED TO NURTURE TALENT AT ALL LEVELS There is an identifiable need to ensure training is available both for new recruits and for up-skilling the existing work force. Concerns were raised in response to one of the recommendations laid out in the Richard Review which suggests that apprenticeships are primarily targeted at learners acquiring new skills and are not used as programmes to accredit or build on skills of experienced workers; 59% believed that this recommendation would prevent up-skilling in the industry Over a third (34%) believed that this proposal alone would actually lead to a decrease in overall apprenticeship numbers, this figure increasing to 44% with education providers 41% believed that new recruits may be taken on at the expense of training existing members of staff. 13
14 I SEE THE CONFIDENCE THAT THESE QUALIFICATIONS GIVE YOUNGSTERS. THEY ARRIVE AT OUR ACADEMY FROM ALL SORTS OF BACKGROUNDS, BUT THEY END UP THINKING THEY CAN TAKE ON THE WORLD. STEVE GELDER MBE, MANAGING DIRECTOR OF GELDER GROUP 14
15 CONCLUSION The ambitious growth targets set for the construction industry, coupled with recruitment issues and a widely recognised skills gap present the need for investment in people, education and training across the industry. It is important now more than ever to strike a balance between developing both the talent of new entrants and those already working in the industry to ensure we develop and sustain the skills designed for growth. Building Futures on Shifting Foundations provides invaluable insight into the challenges presented, looking both at the education and skill requirements needed now and also in the future. The key areas and questions to arise from this survey are: 1. Barriers and challenges to achieving the 2025 vision What are the main barriers and challenges to delivering on the Construction 2025 strategy and how can we work together to meet these aspirations? What can be done to improve the perception of the construction industry? 2. Enabling skills development at all levels; up-skilling versus new recruits How can the industry ensure that there is training both for new recruits (i.e. apprenticeships) and provision for up-skilling of existing work force to ensure it has the people with the right skills at all levels? 3. The need for a benchmark industry standard There is clearly demand for greater licence to practise arrangements in the industry, across many if not all trades. What is the role of apprenticeships in this? And what are the perceived challenges of standards setting for such a diverse industry with regards to both? 4. Driving the value of apprenticeships; tackling low employer engagement and understanding of apprenticeships and funding How do we drive more employers to see the value of apprenticeships and wider work experience programmes? How can education providers and employers work together to create more opportunities for young people? The findings of this survey and the City & Guilds Construction Summit make an important contribution to City & Guilds strategy to support the construction industry. We ll be keeping up the dialogue and continuously engaging with the industry by establishing a core group who can frequently debate the issues. We believe that by working together we can create a blueprint for future excellence. 15
16 WE ARE COMMITTED TO ENSURING THE FUTURE NEEDS OF THE INDUSTRY ARE MET THROUGH EDUCATION AND TRAINING For more information visit 16
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