Ashley Wheaton, principal at the University College of Estate Management, which has recently opened a new Asia-Pacific headquarters in Hong Kong, on the built environment skills gap in the region, parallels with the UK, and what they can learn from each other.
Today, global employers are having difficulty filling skilled roles due to a lack of available talent, across all industries. Rapid economic development, static education systems and shifting demographics have all led to significant discrepancies between the supply of talent and market needs.
This problem is particularly acute in large, emerging economies such as China. The country has undergone a rapid rise over the last 35 years, and is now the world’s second largest economy – but for this market to continue to evolve into a consumption-oriented economy, and become a services powerhouse, it needs highly skilled and qualified workers across all business sectors.
Even though China now boasts the world’s largest workforce and seven million graduates each year – up from one million in 2000 – this increased pool of labour has not yet bridged the skills gap.
Chinese companies are reporting major discrepancies between their requirements and candidates’ qualifications, skills and aptitude – and a major gap between what employers want from graduates and what they’re getting. The Manpower Group’s 2013 Talent Shortage Survey, which polled 38,000 global employers, reported that 45% of companies in the Asia-Pacific region have had trouble filling skilled vacancies.
Another study by McKinsey Global Institute indicated than a third of employers in China are struggling to recruit talent, with 61% attributing this to a shortage of skills. McKinsey also stated that if China doesn’t bridge the gap, the costs, in the form of lower productivity and lost opportunities, could be more than $250bn.
This skills shortage is becoming especially acute within the Built Environment due to rapid growth in the industry, and the issue is particularly prevalent in Hong Kong. Its construction, real estate and property market is one of the most booming in the world and is expected to continue to play a critical role in the region for a long time to come.
But while major infrastructure projects in Hong Kong, as well as residential market growth and large retail foot-print, have made it a magnet for built environment talent, there’s still not enough to keep up with the market demand. For example, the quantity surveying sector is the fastest growing in Asia and has the greatest concentration in Hong Kong.
All employers in the sector, from large surveying firms to the in-house teams of global corporates, are currently seeking property professionals.
Some have attributed the skills shortage in Hong Kong to the result of an education system that has failed to prepare young people for working life, while others say it’s a symptom of employers shifting the training of employees onto academia, rather than investing in it themselves.
“Hong Kong has provided a rich talent pool for China and the rest of the region during the last two decades. But it needs to be a much, much bigger pool if current growth is to be sustained.”
Whatever the reason, Hong Kong has provided a rich talent pool for China and the rest of the region during the last two decades. But it needs to be a much, much bigger pool if current growth is to be sustained.
The situation in China and Hong Kong is mirrored in the UK. The current skills shortage is chronic, hampering productivity, and holding back economic recovery. This is particularly true for high-level skills in STEM subjects: Science, Technology, Engineering and Maths. The Confederation of British Industry (CBI) found that nearly 40% of firms looking for staff with STEM skills have had difficulties recruiting.
This skills shortage, like Hong Kong’s, is particularly acute in the built environment, partly as it encompasses such a wide range of disciplines – from structural engineering and architecture to construction management and surveying – and because it’s also growing so rapidly. The industry has been a major player in the UK’s recent economic recovery; contributing £92bn a year to economic output, and it’s set to increase 17.8% by 2018.
But with this continued growth the skills gap is becoming all the more evident. RICS recently surveyed 75,000 of its members and found two out of five are even turning down business because of the shortage. While the London Chamber of Commerce and Industry (LCCI) reported that about 20 % more construction managers, surveyors, and other trades are needed to meet demand over the next four years.
Furthermore, the built environment is increasingly being measured not just on aesthetics and financials but also on criteria like health, happiness, and carbon footprint, while the adoption of new digital technologies – and a wave of innovation through new materials, energy sources and design approaches – will see a demand for even more skills.
If the markets are to continue their current expansion, as well as economic growth, then an available, talented and engaged workforce is critical. So what can be done?
Vocational learning and apprenticeships?
Could learning while working, on-the-job training, vocational academic programmes, industry-specific courses, and apprenticeships – rather than traditional route of studying a broad university degree straight after school – be the answer? Could these methods provide career entry points, end youth unemployment, produce talented professionals and, of course, close the global skills gap?
Vocational education means potential talent can simultaneously gain cutting-edge industry knowledge, exposure to major companies, network opportunities with practising professionals, and even start earning while they’re studying; entering the workforce at a much higher level than their peers.
The UK government already has a target of producing 3 million UK apprentices by 2020. The new apprenticeship levy, to be introduced in April 2017, will apply to large employers across all industries. Employers will pay a 0.5% tax to fund apprenticeships, and it’s hoped that the levy could raise around £3bn annually by 2020.
And construction, real estate and property are areas where employers have successfully used apprenticeships to bring in entry-level talent, with or without a degree, and trained them in the skills they need to hit the ground running and add value to organisations from the start.
Training existing talent
An area where Hong Kong and the UK could both improve in is encouraging organisations to progress and retain their existing talent. Investing in the development and training of current staff is often low on the list of business priorities. However, continuously evaluating, refining and improving the workforce can directly affect commercial success. It means more staff will have up-to-date and relevant skills: valued, respected and sought after by the industry.
Also, companies generally end up spending much less on upskilling and retaining staff, compared to the vast amounts of money required to recruit higher skilled candidates. For example, relevant qualifications gained through online learning can cost as little as £4,000 a year.
Educating unqualified staff while they continue to work means valuable time isn’t missed waiting for people to be trained. It also means they can start making a difference in their work straight away; for example, degree, apprenticeship and training programmes can be tailored to match in-work projects.
All of this provides a competitive edge in the market – not least having the relevant skills to deliver any real estate, property or construction project.
The built environment isn’t just growing, it’s developing and expanding – and fast. It’s important for everyone – employers, educational establishments, governments and industry professionals – to be constantly learning and keeping abreast of the latest developments, to stay ahead, close the skills deficit, and future-proof the talent pipeline.
The official opening of UCEM’s Asia-Pacific headquarters in Hong Kong builds on the organisation’s presence in Hong Kong for over 40 years, where it has worked closely with industry organisations such as HKIS (Hong Kong Institute of Surveyors), RICS (Royal Institution of Chartered Surveyors) and CIOB (Chartered Institute of Building). The new Hong Kong office cements UCEM’s commitment to those seeking to start or further a career in the Built Environment in Asia-Pacific, through a range of property-related programmes at undergraduate and postgraduate level and CPD courses.