The Evidence Base, Business Drivers, Constraints, Solutions Skills Shortage The Evidence Base, Business Drivers, Constraints, Solutions Phil Ellis Programme Manager – Capacity & Capability Nov 9th 2017

The Evidence Base – Skills Shortage Do Skills Shortages Matter Investment & Demand Growth Supply needed to meet demand Supply Chain Skills Survey Areas of Focus Constraints to growing Labour Supply Conclusions

Do Skills Shortages Matter ? Impacts of Skills Shortage Insufficient resources Extended time to deliver Increased impact to road users & economy Increase in costs Cost inflation (…overheads required for longer) Schemes possibly not meeting cost viability limits (BCR’s) Insufficiently trained people delivering work in an unsafe manner Lack of developed country (impact on economy etc)

Global Infrastructure Investment

CPA Construction Investment Forecast (1997-2025)

HE Capital Investment 2015-2020 £3.1bn Growth 61% £2.7bn £2.39bn £2.02bn £1.92bn

HE Workforce Demand (Capital only) (17,298)

Supply Chain Skills Survey 84 Supplier responses 80% of suppliers responded (by spend) 92% of suppliers on our key frameworks responded Topic Areas: Severity of Skills Shortage Sectors within Supply Chain impacted Disciplines & Key Roles impacted Importance of EU Workers Impact of age & seniority Barriers to attracting workers Barriers to retaining workers Impact of Staff Churn Regional impact of skills shortage Ideas to improve Skills Shortage Areas of Materials Shortage Areas of Plant Shortage ‘What’s the temperature of current skills shortage ?’ …compiling results now

Supply Chain Skills Survey (Results 1) 44% respondents said that current skills shortage is either ‘Very Severe or Severe’ 2. The top 3 disciplines ranked based on extent of Impact of current skills shortage across the various disciplines from ‘Very Severe to Severe’ impacts are: 1st – Skilled Construction Trades (42%) 2nd Construction Professional Services (35%) 3rd Design - Core Eng disciplines(26%)

Supply Chain Skills Survey (Results 2) 3. Key resource shortages (Tier 1) that will have severe impact on the delivery of schemes; 1st Project Managers (64%) 2nd Planners (60%) 3rd Construction Managers (58%) 4. The top 3 skill shortages by seniority/experience level: 1st Management (over 15 years’ experience) - 46% 2nd Supervisory (around 5-15 years’ experience) - 46% 3rd Junior Apprentice/Technician - 30% 5. The top 3 barriers in retaining talent are; 1st - Schemes outside the roads sector attract talent away from highways 2nd - Lack of work/life balance 3rd - Fear of job security due to historic stop-start approach to investment

Focus Areas Capacity Capability Promotion & Attraction Recruitment & Retention Training & Assurance Productivity & Innovation Capacity Capability Building Blocks: HE Supply Chain needs to grow by 17,298 to deliver RIS 1 Investment New Entrants need to be trained to deliver efficiently & Safely With historically low Productivity – is Productivity Improvement & Innovation an opportunity ?

Constraining Factors Low unemployment (4.2%) Unattractive industry (reality & perception) Brexit Uncertainty Aging workforce (…higher attrition rate over the next 5-10yrs) Industry history of sub-optimal training of workforce Lack of sufficient training facilities & trainers Historically Low Productivity Industry Structure & Problem ownership Uncertainty of work – at company level Inconsistency of work – at company level

Conclusions Demand is significantly increasing – both in Construction overall & the Highways Sector Capacity/supply growth is constrained by environmental & industry factors Business drivers to ensure a sufficiently skilled workforce are overwhelming Only a proactive, collaborative suite of interventions will solve the impending skills shortage