As the nation debates migration, how does it impact construction today?

With demand surging and qualified workers thin on the ground, UK construction is looking overseas to fill the gap. But is this a natural phenomenon or a problem to be solved? Elaine Knutt reports.

If you go down to a site today, how many construction workers and managers will be foreign-born? Looking at the figures suggested by the 2011 national census, it could be around 9.6% – up from 5% in 2001. If that site is employing foreign-born workers in line with national trends for the working population as a whole, then government statistics suggest it could be around 16.6% – up from just 8.2% in 1995. And if it’s a site in the south-east run by one of the major householders – we spoke to Berkeley Group – it could be an estimated 20-30%.

The sector has always pulled in labour from other countries in times of high demand, then let it disperse as work thins out: immigration acts as a safety valve that allows contractors to smooth out bumps in demand. So with the current upsurge in demand in London and the south-east – where KPMG tells us we could already be experiencing a shortfall of 170,000 – it’s not surprising that the industry is turning to its tried-and-tested response.

Read related articles

The view from the recruitment consultants

Leader: Migration is an intrinsic part of our economy

Vox Pop: What helped in your decision to pursue a career in
the UK rather than your own country?

That, at least, is the anecdotal picture from several recruitment consultants. “We’ve been asked by a big construction company to find 50 roofers, scaffolders, groundworkers and carpenters,” says Nick Miller, managing director of recruitment firm HMA International, who also says he is searching European markets for quantity surveyors, civil engineers and planners. Miller says he would routinely cold-call major construction companies who would equally routinely ignore him – until his phone started ringing in the middle of last year.“We’re the sort of company [people] come to when they’re desperate,” he says candidly.

His view is confirmed by Kevin Boakye at Capstone Recruitment, who recruits for main contractors and developer-housebuilders. “Six months ago, it started to get increasingly desperate to get people on site to deliver contracts, so it’s now a case of looking outside the box. Previously clients would ask for knowledge of the UK market, now they’re more accepting of people coming from abroad. There’s definitely been a difference in the last six months.” In today’s market, that could mean professionally qualified staff from depressed EU markets such as Spain or Greece, or low-skilled site labour from the eastern arc of the EU.

The “£1,000 a week” Portuguese bricklayers who made headlines last year are hard to track down: no brickwork contractors wanted to discuss the issue with CM. But it’s likely that they’re still being joined by their compatriots, according to Steve Turner, head of communications at the Home Builders Federation.

“I recently did two interviews with Spanish and Portuguese TV – UK labour agencies had been advertising there so they were reporting on the opportunities here for bricklayers.” And what did he tell the TV journalists? “That there’s a big increase in housebuilding activity and people are looking to fill a lot of vacancies.”

With immigration one of the rumbling issues in the pre-election debate and and a British Attitudes Survey in 2013 showing that 77% of the public want a reduction in migration, the industry knows that it’s positioned at the crux of the arguments. When rising numbers arriving in the UK are coinciding with an awareness of increasing inequality, the fact that construction could be charged with turning to overseas labour – and therefore arguably turning away from young UK nationals – means the issue is ripe for re-examination.

So the CIOB threw a spotlight on the issues in its recent report CIOB Perspectives: An analysis on migration in the construction sector. Essentially, it concludes that construction benefits from the free movement of labour so considerably that any attempt to rein it back would harm the economy as a whole: “It would restrict the construction industry’s ability to grow, hamper innovation and reduce the talent pool of trades and professionals available to the industry. The UK would also lose out on an opportunity to benefit from any fresh ideas migrants frequently bring from their home countries,” the report says.

Training boost for UK nationals

But at the same time as keeping the door open to overseas talent, the report emphasises that more must be done to promote career pathways for UK nationals, saying: “Industry and government should look with urgency at boosting support for training, mentoring and developing young UK citizens as the most effective way to moderate the inflow of migrant workers into the construction sector.”

Encouragingly, recent initiatives have shown that the industry is stepping up action to reach out both to the younger generation and those who left after the 2008 market crash, when it’s estimated around 10% of the labour force exited the industry. Turner says the HBF has launched a new website designed to guide school and college students into long-term careers, and a new CITB-funded initiative to retrain potential returners. Meanwhile, Persimmon and Lend Lease have set out to recruit increasing numbers leaving the armed services.

“The construction workforce is a transient one – just as UK brickies used to go to Germany, or Irish people came across in the 1900s. It’s always been that way,” Turner comments. “So yes, employing more people from abroad is a short-term solution, but we’re also looking to attract people back in the medium term, and in the longer term training more young people so we have a more sustainable workforce for the longer term.”

As he says, the two issues – the industry’s foreign migrant workforce and low numbers of young UK citizens flowing into the industry – are inextricably linked. But in addition, they both trace their origins to the structure of the industry, explains Stuart Green, professor of construction management at the University of Reading. When Tier 1s routinely subcontract 80% of their work to sub-tiers of suppliers working on tight margins, that means less capacity to train the rising generation. And with fewer UK-born trained site workers, there’s more likelihood that the labour agency at the bottom of the chain will choose to hire site-ready plasterers or dryliners or electricians from overseas.

“Construction is volatile, regional, seasonal and has extreme sensitivity to the economic cycle. Manpower planning, particularly when tendering for work is notoriously difficult,” he says. “So the industry in the UK has adopted a particular response to this turbulence, which is different from Denmark or Germany or the Netherlands, to retaining a competitive model resting on flexibility in the face of volatile demand. They don’t want to carry overheads they can’t sustain.”

But, as Green says, if you look at that supply chain from the perspective of a low-skilled foreign labourer, then you see an “accessible” structure where you can fairly easily set yourself up as a self-employed subcontractor, or hire yourself to an agency umbrella, and find work on a professionally run project.

On the other hand, that same “accessible” structure is likely to offer limited prospects via training and promotion. “Frank Lampl turned up [from Prague in 1968 to visit his son] and ended up becoming chairman of Bovis. But those opportunities now aren’t there – you could end up working as a Tier 5 agency worker, and just not find a route through the system.”

As he describes, the supply chain is tuned to short-term flexibility, self-employment and only a patchy commitment to training the future generation. “It’s developed over several decades in the context of a neoliberal economy and subsequent government policies,” says Green. “But when it becomes the dominant mindset, it’s very difficult for individual firms to buck the trend – because when you bid, you’ll get undercut by someone else.”

There are of course other ways to structure a construction industry – Green points to Germany and Scandinavia, where subcontracting rates are far lower and there is “more of a collective commitment between the unions and management on productivity improvements”. But there are also other nations that are aligned with the UK’s subcontracting and self-employment model – and they experience similar skills shortages and dilemmas.

Echoing the Canadian experience

Take Canada for instance, which has a high presence of immigrant site workers, drawn to a construction boom fuelled by the tar sands industry. “There are some real parallels between the London and Toronto – we saw a growth in self-employment after the 2008 crash and it’s become a systemic part of the labour market here,” says Michelle Buckley, assistant professor at the University of Toronto Scarborough.

There has also been a recent reliance on migrant labour: Buckley describes how “construction has used the Federal Skilled Workers Program to fill gaps in the construction workforce”, mentioning highly skilled labour from India, and labourers from Brazil and Uruguay. But because their visas tie them to employers, she says, “it’s not a free labour market – there are issues around vulnerability”.

Now the construction boom has been hit by falling oil prices, and in response to calls for “Canadian jobs for Canadian citizens” the government is currently implementing a new policy of restricting low-skilled migrants’ work permits to just four years and barring them from the country for another four – although the “four by four” initiative has provoked a political backlash.

Buckley has made a specialism of studying immigration and construction markets: previous work looked at London, Toronto and the Gulf, and she also plans to study Chiang Mai in Thailand. She points out that there are often uncomfortable parallels between the construction employment in the west and the booming Gulf states. 

“There’s a tendency to look at poor conditions for migrant labour as a Gulf phenomenon, but it’s also driven by the fact we have multinational Canadian or UK contractors who take their ways of doing business with them [to the Gulf]. So yes, they take positives, you have voluntary safety campaigns there. But at the same time, you see similar labour subcontracting arrangements we see in Toronto: you’re moving from site to site and don’t know who your employer is and you’re tied to your employer for the duration of your visa. So there are also parallels with visa schemes we have in Canada,” she says.

At the University of Westminster, Professor Linda Clarke is examining another factor in the debate: are workers from the EU and further afield preferred on site because they receive better training in their home countries? Clarke’s research certainly leads her to think so, and that the UK should try harder to emulate its broadly-based skills training.

“The Polish [college-based] system is very broad, and that’s what the employers here like – they say Polish workers are more adaptable. Training here is very driven by what employers need, but employers don’t know about training,”
she argues.

And when young people do find their way to a construction course at an FE college, the employer-led system lets them down again. “We’ve just supervised a PhD student who looked at what happened to 300 trainee electricians in the east London boroughs over the period of the Olympics, and most couldn’t get an apprenticeship place or work experience on site.”  Of the minority who did find work at the Olympics, Clarke reports that only one was from a black or ethnic minority background.

With such low numbers embarking on apprenticeships in construction trades – just 15,890 starting last year – contrasting with the many thousands of students on construction-related courses at FE colleges who find it difficult to get jobs, Clarke believes that the lack of integration is hampering skills and career development for UK nationals. 

The view from the EU

But at Brussels-based FIEC, the European Construction Industry Federation (the voice for construction industry associations across the EU) director for social affairs Domenico Campogrande stresses that it’s not just the UK struggling to recruit and train young people, as most European industries face similar problems in setting up a skills pipeline for the future.

“Most of the member states say it [youth skills shortages] is a problem – there isn’t a country that says ‘our young people are keen to come to our industry’. It’s worrying in the medium to long term with the ageing population – in Germany that’s certainly the case.”

In fact, there’s a whole website – construction-for-youth.eu – devoted to the initiatives trialled in different EU countries. UK policymakers might want to explore Germany’s “Builders Wanted!” campaign for the under-sixes; Denmark’s “Build a House” for primary school children; Belgium’s internships for high-school pupils, or Latvia’s Construction Industry Council of Experts, charged with creating a new system of vocational training. So if our training pathways might not be doing very well at attracting and qualifying young people, it doesn’t look as if our European neighbours are doing much better.

And Campogrande also points out that migration flows are more complex than we might assume. “It’s not just people from eastern Europe going to the UK – there’s a high level of Polish workers in Belgium, and also Austria and Germany.” Meanwhile, low levels of construction activity in Spain are resulting in an exodus of Spanish workers, and their contractors are increasingly bidding for work in France, he says.

The dovetailing issues of skills shortages, employment patterns and the growing numbers of migrant workers in UK construction plc, reappear in different guises all over the world, from Canada to Germany, Qatar to Poland. It doesn’t make it any easier to create an industry that’s fair to everyone to wants to work here, but at least we can recognise that we’re grappling with issues that originate deep in the principles of the market economy and the free movement of labour – and that stemming migratory flows is unlikely to be workable or desirable.