Building a Resilient Workforce
Fuelled by environmental, social and governance (ESG) obligations, rapid technological evolution and a skills shortage, attracting and retaining talent is a critical challenge for construction firms.
Talent is pivotal to construction firms’ ability to consistently deliver projects on time and remain profitable, but global trends and pressures are diluting both the attraction of the construction industry for new joiners and the sustainability of the existing workforce:
Challenging stereotypes
Business leaders in the construction industry are already making socially and environmentally responsible business decisions, but the growing trend of environmental, social and governance (ESG) integration across companies and investors is acting as a catalyst to accelerate change. With clear regulatory guidance, firms are now addressing sustainability and societal issues with renewed focus.
Globally, assets in sustainable investing products (including ESG) surged by 34% from 2016 to 2018, reaching USD 30.7 trillion. Since a report in March 2020 found 65% of investors use ESG ratings at least once per week, the value of a robust ESG strategy is essential for continued investment and growth.
Aside from attracting and retaining investor appetite, construction firms should use the ESG guidelines to evolve their talent strategy.
According to Standard & Poors’ Risk Atlas – which provides a relative ranking of industries in terms of exposure to environmental and social risks (and opportunities) – the building materials industry has relatively high exposure to environmental risk, while construction firms are more exposed to social risks .
The Environmental, Social
and Governance Catalyst
How can Construction Firms Evolve Their Talent and ESG Strategies for Long-Term Growth?
See New Threats
Of the 15 key trades and occupations monitored by The Federation of Master Builders, 40% show skills shortages. In the UK alone over 20% of the workforce is over fifty years of age, and 15% are over 60. As this aging workforce reaches retirement, the percentage of new joiners is depleting rapidly – with just 3% of 18-24 year olds searching for roles in the construction industry. Addressing the skills shortage at an early age is an industry imperative.
The gender balance across the construction industry is adding new complexities to the talent challenge. The number of women working in construction only rose by 0.7% between 2007 and 2016, with a total female workforce population of just 12.8% .
Since only 22% of firms are currently actively engaging with schools to tackle stereotypes and showcase the potential for professional success in the construction industry, the need for firms to establish and collaborate on educational initiatives is escalating rapidly.
Commitment and integration of ESG factors is now the hallmark of sustainability. Social responsibilities will need to be addressed with a focus on diversity, equity and inclusion to develop a working environment where employees feel valued and safe. Companies with corporate sustainability initiatives or ESG initiatives with a focus on diversity, equity and inclusion (DE&I) will be better positioned to increase employee loyalty, efficiency and productivity. By boosting morale with thoughtful initiatives designed to bolster DE&I messaging, employees are more likely to feel engaged with the firm which translates into recruitment and retention.
Social Risk: Building a Sustainable Future
A Focus on Generation and Gender
Explore the Findings
Navigating New Forms of Volatility
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Despite encompassing highly specialised and technological work across architecture, engineering and project management, younger generations typically perceive the construction industry as primarily manual and fail to fully appreciate the scope the industry can offer to develop their skills.
A global focus on climate change, diversity, equity, inclusion and social responsibility are now core drivers for career decision-making. Regulatory action, alongside the proliferation of activist groups are directly impacting potential new joiners who feel that they have a responsibility to pursue careers in industries with clear commitments to ethical practices – both environmental and social.
Changing sociocultural ideologies
Industry statistics show that workers in construction industry have higher risk of developing serious and long-term conditions, largely due to occupational health hazards and the mobile nature of jobsites putting a strain on worker wellbeing.
Workforce Health and Injury Risks
The growing number of challengers entering the industry are driving the need for innovation to secure new talent. With a depleting new joiner pipeline, firms are actively reskilling their workforce and at risk of losing key talent to alternative industries which are targeting candidates with transferrable skills.
Firms who fail to address these issues face rising costs and stagnating productivity.
Competition
1. www.bloomberg.com/news/articles/2019-04-01/global-sustainable-investments-rise-34-percent-to-30-7-trillion
2. www.spglobal.com/en/research-insights/articles/esg-industry-report-card-building-materials-and-engineering-and-construction
3. www.construction-europe.com/news/tackling-the-uk-construction-skills-shortage/1142170.article
4. www.mckinsey.com/business-functions/organization/our-insights/the-economic-case-for-reskilling-in-the-uk-how-employers-can-thrive-by-boosting-workers-skills
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Construction firms are more exposed to social risk.
Despite these challenges, technology and digitalisation are providing construction firms with new opportunities to boost their employee value proposition.
Although developmental technologies may alleviate some of the shorter-term talent shortages by automating manual processes, longer-term integration of technology into construction firms’ operating models will demand new skills. Since research indicates that graduates show the most interest in industries that they believe will be most impacted by new technologies, positioning the construction industry as a technological growth opportunity could translate directly into talent acquisition and retention.
The evolution of technology and digitalisation of the construction industry will widen the skills gap. To avoid the downstream impacts of an acute skills shortage, forward-thinking firms should invest in pioneering solutions to drive effective reskilling in addition to new joiner campaigns. By engaging with existing employees to discover their concerns, ambitions and objectives, firms can create meaningful development opportunities through training and other initiatives to foster a culture of learning, leading to longer-term career progression, loyalty and retention.
Meanwhile, other industries such as the energy and power industries continue to evolve in response to ESG obligations, driving the need for new infrastructure to support their transition to renewables and more sustainable operating models. Despite the current skills shortage, this uptick in demand can create new opportunities for the construction industry. By clearly articulating involvement with sustainable projects, firms will be well positioned to attract talent with transferrable skills who are keen to make a difference.
For firms who fail to invest in progression opportunities for their employees, competitors with comparable technology and opportunities and scope, will be more attractive and there may be some exploratory movement in new roles. Building an ecosystem of collaboration across education providers, partners, and even competitors could create a flexible talent pool that can be leveraged in new ways as industry demands change over time.
To discuss any of the topics in this article, please contact:
Donais Deetz
donais.deetz@aon.com
Looking Ahead
In about 75 percent of cases, it pays for an organisation to reskill an employee.
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