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Constructing the future:How the skills needed for success in the workplace are changingSeptember 2018Constructing the future01ContentsForeword 02About us 04Summary 061. The scope and aim of this paper 082. The importance of the industry today 093. Prospects for change – the opportunity 114. Current challenges to overcome 185. Future workforce, skills and learning 236. Conclusion and recommendations 2701How the skills needed for success in the workplace are changingI want to start with a hypothetical but a very common and realistic situation.Mike has been a builder all his life. He joined the industry at 18 after completing a City & Guilds qualification and now his daughter has followed him into the industry and is working for the same organisation.Mike knows that he is going to have to work until he is at least 67 and his daughter is probably going to still be working at 70. Both of them are very competent builders but are conscious that the industry is changing and new ways of working are emerging which may automate some of the work they do now. They know their skills will become outdated and their employer is also aware that they are going to have to invest in upskilling and reskilling them in order to remain competitive.Mike, his daughter and their employer could be in any industry in the UK. But the important underlying message is that the evolution of the UK’s workforce and the growth and success of its businesses hinges on the ability of the UK’s skills system to adapt and develop to prepare for the jobs of the future. The majority of people in the workforce now will still be in the workforce in 30 years’ time. As the world of work continues to evolve, so too should the way in which lifelong learning is incorporated into career paths, and the role played by businesses in upskilling and reskilling their workforce. And we must equip people, such as Mike and his daughter, with the important transferable skills as well as the technical skills which will allow them to better adapt to change when it happens.Many of the proposals in the Government’s Industrial Strategy which focus on tackling the UK’s skills challenges do so with an emphasis on getting young people into the workforce. Whilst this is of importance, if the Government is serious about solving the current productivity ForewordConstructing the future02The current estimated construction workforce is1,892,4271 in 20construction companies report their trades people do not have the range and level of skills needed now03challenge whilst building a workforce with the capacity and capability to meet the skills challenges of the future, it needs to act urgently on the UK’s current 33 million workforce.It is with this perspective, with a focus on the construction industry, that this report is centred. Though concentrated on the skills challenges of one sector, which permitted us to hone in on key issues such a skills drain from Brexit, it provides valuable insights for other industries.The report highlights the importance of the construction industry to the UK as the fourth largest sector by turnover and the fifth largest by employment. The UK is also expected to overtake Germany and become Europe’s largest construction market and the sixth biggest in the world. Clearly there are huge opportunities to be grasped. But the report also indicates that with a current estimated workforce of 1,892,427 and one in twenty construction companies reporting their trades people did not have the range and level of skills needed now, there is much to be done to realise that opportunity.So, the skills sector must respond to this challenge and opportunity. We are accustomed to change, especially in the area of technical skills and apprenticeships, but the change we really need to see is sustainable reform which facilitates progression, embeds lifelong learning and equips people with important transferable, future proof skills and also the technical skills that are needed now. We need to ensure that initiatives launched with the intention of supporting upskilling and reskilling, such as the Government’s National Retraining Scheme, actually realise their intended benefits by ensuring all businesses in the sector are on-board and understanding of the ambition and the opportunity. Finally, we provide a number of recommendations at the end of the report, noting what we believe needs to happen from the perspective of the Government, the construction industry and those in the skills sector such as: more collaboration, building leadership and management skills, ensuring new initiatives support all areas of the industry and developing the existing workforce. They are deliberately high level. We want this report to spark debate and formulate action and the City & Guilds Group in partnership with employers and other stakeholders will continue to facilitate debate and action from hereonWe look forward to working with you on realising that ambition.Chris Jones, Chief Executive Officer, City & Guilds GroupHow the skills needed for success in the workplace are changingThe Work Foundation is a leading provider of analysis, evaluation, policy advice and know-how around developments in work, targeting organisations, cities, regions and economies, now and for the future. Our mission is to improve working practices to make the best of people and create more Good Work.As a charity owned by Lancaster University we advance Good Work in all its forms from a truly objective position, getting under the skin of problems, developing actionable solutions and practical tools, and networking, to share ideas and learning with leading thinkers and practitioners who have first-hand experience of what works. Good Work for all by necessity encapsulates the importance of productivity and skills needs, the consequences of technological innovation, tackling inequality and creating a work environment to support a healthy, happy and productive workforce.For further details, please visit www.theworkfoundation.com. About The Work Foundation04The City & Guilds Group is a leader in global skills development. We work with education providers, employers and governments in over 100 countries across the world to help people, businesses and economies grow by shaping skills systems and supporting skills development.The Group is made up of City & Guilds, ILM, Kineo, The Oxford Group, Digitalme and Gen2. Together, we set the standard for professional and technical education and corporate learning and development around the world.Each of our businesses has its own distinct focus. As a Group, its combined products and services provide a comprehensive range of work-relevant qualifications, assessment, training, and learning support services.The products and services we offer across the Group are globally recognised and respected.About the City & Guilds Group Constructing the futureAcknowledgementsHow the skills needed for success in the workplace are changing05The research was conducted by a team at the Work Foundation including: Nigel Hudson and Lesley Giles. It was overseen by Clare Fraser and Caroline Roberts at the City & Guilds Group.The authors would like to thank the City & Guilds Group for funding and supporting the research presented in this report. This paper represents a distillation of findings from a rapid review of the relevant literature. A copy of this paper is available on request. The findings from this were summarised and discussed at a workshop of industry experts held in London in March 2018. The workshop discussions were particularly important in framing the recommendations made in the concluding chapter. We would also like to thank all the workshop participants for their invaluable insights.We are grateful to Construction Robotics for permission to use their image of the SAM 100 bricklaying robot.06SummaryConstructing the futureThe Work Foundation and the City & Guilds Group share a common interest in understanding the evolution of the workforce and how the skills needed for effective performance in the workplace are changing. Ongoing developments in the world of work put an onus on lifelong learning but are businesses doing enough to upskill their workers and to ensure their effective development and skills utilisation? This paper looks to address these issues through the lens of a particular industry: construction.Many commentators have spoken of a new industrial revolution. It is easy to see early shoots of this emerging in construction, particularly in relation to digital technologies.Building Information Modelling has the potential to act as the cornerstone for digital information to facilitate optimal performance over the life-cycle of a building. Equipment such as drones, autonomous vehicles, 3D printers and robotic bricklaying machines, a similarly wide range of new materials, more extensive use of off-site construction and technology such as embedded sensors are already available but their more extensive and integrated use has the potential to transform the industry. Such a transformation offers the opportunity for a radical improvement in levels of productivity and profitability within the UK industry and for it to acquire global leadership in a market that is expected to triple in the years to 2030. At the same time the current performance, organisation and practices of the industry are likely to inhibit change. It is highly cyclical and profit margins and levels of investment, both in equipment and people, are comparatively low. The industry is highly fragmented, with a very large proportion of the workforce accounted for by micro businesses, sole traders and the self-employed. Relationships with clients and along the extended supply chains are typically adversarial. The industry struggles to recruit and train sufficient young people, experiences difficulties filling the vacancies already available and skill gaps amongst the existing workforce are a further problem. The workforce is ageing and this is likely to be exacerbated by Brexit, particularly in London. Working practices associated with high performance are relatively rare, as is engagement with lean approaches to maximising efficiency.At the same time, there are questions about the quality of management and leadership within the sector and how sufficiently it invests in and makes full use of its workers’ talents. Surveys have repeatedly found that little more than half of construction employers provided training to their workforce, which is below national levels. Further, most of this training seeks to cover statutory minimum requirements for health and safety and/or induction. Furthermore, only 4% of construction businesses adopt the full blend of high performance management practices known to be associated with creating a competent and motivated workforce to deliver high levels of personal and business performance.Realising the better prospects for the industry will require strategic leadership that engages the whole of the industry and similarly coherent support from Government.Major workforce and skills challenges will include:• developing leadership and management skills and behaviours appropriate for a high performing, collaborative and digitally-enabled industry• attracting more, and a wider range of, young people into the industry and ensuring they develop the skills required • continually developing the skills of the existing workforce, having appropriate incentives and provision to engage the smallest businesses and self-employed and creating industry-wide arrangements for recognising bite-size learning achievement.We hope this report contributes to helping the industry and stakeholders tackle these challenges and more generally achieve positive transformational change.07How the skills needed for success in the workplace are changingNext >