As the often-quoted advice from Richard Branson goes, “Train people well enough so they can leave, treat them well enough so they don’t want to”. But is this really relevant in the fit-out sector? With an increasing skills gap and an uncertain market where training has always been last on the agenda, who can justify this cost to the bottom line? FIS skills delivery director Helen Yeulet highlights how the FIS Training Needs Analysis 2018 provides some interesting thoughts on this question.
Fit-out is still predominately a subcontracted workforce, although there does appear to be a trend towards direct employment, evidenced by a 5 per cent increase in PAYE. This could be driven by the recent well-publicised decisions regarding Uber workers and the emergence of more zero hours contracts, perhaps, or by a desire to secure skilled workers ahead of the further insecurity threatened by Brexit.
As 94 per cent of respondents to the FIS Training Needs Analysis 2018 (TNA 2018) declared a need for skilled site labour, this can only lead to increased competition for the limited skilled labour available. The biggest question must be whether specialist contractors can afford to keep increasing their rates on each job well after they’ve won the bid, just to keep on track and escape final penalties for delay.
Training and upskilling workers is not seen as an essential part of construction, unless mandated through health and safety, a framework or a Section 106 obligation. The sector still has a heavy reliance on non-UK labour, with over 56 per cent of respondents employing from Eastern Europe and beyond. These numbers are decreasing, but with current UK unemployment levels at 4 per cent (ONS: May to July 2018), the lowest since 1971, where are the future skilled workers coming from unless we attract them into the industry from a young age?
Many of the trends outlined in the most recent Training Needs Analysis of FIS members should be a strong driver towards this thought process, with the TNA 2018 revealing that 40.5 per cent of the workforce are over 40, only 8 per cent are under the age of 24 and only 3 per cent of workers are apprentices. These figures must ring alarm bells for anyone looking to be confident that they can deliver on-site – and with the profit line they anticipate – moving into that post-Brexit world.
Wider social benefits
Social value is becoming an increasingly enforced requirement for contracts. British Land, one of the largest property development and investment companies in the UK, has made a very clear declaration that all of its sites will have 3 per cent apprentices by 2020. And the company is clearly monitoring those delivering on this to ensure there are no ‘best endeavours’ – this is a real contractual requirement.
Earlier this year, David Lidington, Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster, committed to using more voluntary sector organisations to deliver public services with plans to amend the Social Value Act, so that all major procurements will now have to “explicitly evaluate” benefits. The move is a direct attempt to rebuild trust following the collapse of Carillion.
“We want to see public services delivered with values at their heart, where the wider social benefits matter and are recognised,” Mr Lidington said. “That means government doing more to create and nurture vibrant, healthy, innovative, competitive and diverse marketplaces of suppliers that include and encourage small businesses, mutuals, charities, co-operatives and social enterprises – and therefore harness the finest talent from across the public, private and voluntary sectors.”
So, apprentice employment, retraining and upskilling unemployed people, or providing work placements might actually help business to be won. The FIS skills team can help contractors to secure this position in their business. To find out more, get in touch and let FIS turn a problem around – and prove how this can become a return on investment, not a loss to business.
Complete the latest sector-wide digital Training Needs Analysis for 2019 at www.thefis.org/skills-hub