Introduction
   The UK Commission is working to transform the UK’s approach to investing in skills to 
   help secure jobs and growth.  Key to our ambition is the need to encourage greater 
   employer ownership of skills, working to secure long term sustainable partnerships.
   This slide pack and accompanying evidence report present the case for more employers  in 
   this sector to invest in the skills of their people.  It does so by presenting real-life, skill-
   based business solutions that have been used by leading employers to tackle the performance 
   challenges they face and by drawing on examples of the investments being made by the UK 
   Commission through its investment funds.
   There are several determinants of employers’ skills needs and training behaviour including firm 
   size, strategy and location but it is by sector which the strongest variations appear.  Hence this 
   work focuses on the Construction sector.  Slide packs and reports are also available for a 
   number of other sectors from: www.ukces.org.uk Each of the sectors are important to the 
   economy in terms of employment, productivity or their future potential.
   For information about this slide pack and accompanying report please contact:
   Zoey Breuer (zoey.breuer@ukces.org.uk
   Source information can be found in the notes section of each slide
       Storyboard
                  What  are key                The importance 
                skills challenges  in           of construction              Imagine where the 
                  the construction               sector today                  sector could be 
                      sector?                                                     tomorrow
                   Performance                   Performance                   Performance 
                   challenge (1)                 challenge (2)                 challenge (3) 
                      Strategic                   Investing in             People management
                   management                   workforce  skills
                   Performance                   Tackling these 
                   challenge (4)                  performance                    Benefits 
                  Attracting talent           challenges: Growth               to business
                                                 through skills
                                                                                                         3
   What is the construction sector?
   SIC 41, 42, 43 and 71
       The sector covers a wide variety of activity, from building HS2 and 
       skyscrapers, to housing estates and routine repair and maintenance:
                          •  Infrastructure
                          •  Housing
                          •  Commercial
                          •  Industrial
                          •  Repair and maintenance
       The variety of activities gives rise to multifarious skill needs, including:
       Skilled trades in:                       Professional and managerial 
       •Heating and ventilation                 skills related to:
       •Plumbing                               •Civil engineering
       •Electrical engineering                 •Structural engineering
       •Welding / metal workers                •Construction management
       •Glaziers                               •Surveying
       •Bricklayers                            •Financial planning
       •Carpenters                             •Architecture 
                                                                           4
    What Key Skills Challenges are being 
    Faced Overall
     The sector is highly cyclical – after every recession the sector tends to lay off skilled 
     workers who then prove difficult to recruit during the recovery period.  This gives rise 
     to skill shortages and wage inflation which, in turn, can inhibit recovery.   Cyclical 
     effects are exacerbated by the high levels of self-employment in the sector.
         A key challenge for the sector is to maintain its supply of skills, especially during 
         periods of weak demand.  The signals to individuals are generally positive – that skills 
         acquisition in construction skills is associated with relatively high rates of return.  The 
         evidence suggests that employers recoup their training investments quite quickly once 
         apprentices complete their training.  Investing in training is a win-win for employers 
         and employees.
             Whilst the evidence should not be exaggerated, the age profile of the sector 
             suggests that there are relatively fewer younger people in the workforce, and that the 
             number of entry level training positions has declined following the recession.  The 
             key challenge, therefore, is to even out the supply of, and demand for, construction 
             skills - the importance of this should not be under-estimated given the significance of 
             the construction sector to economic recovery.
        Construction matters
        The sector today
     •  Third largest UK sector by employment, 2.9 million workers (9% of UK workforce)
     •  Value of output 81 billion in 2008 almost double the figure in 1999  (6% of UK GDP)
                               •   One of the largest construction sectors in Europe (by employment, 
                                   enterprises, and gross value added)
                               •   Skills of the workforce and wages higher than national averages
                               •   Relatively high levels of self-employment at 38% and  accounts for 15% 
                                   of business start-ups. 
                                                 •  Productivity has risen by over one third between 2002-
                                                    2009, £58,000 GVA per head (£37,000 whole economy)
                                                 •  Productivity per employee is higher than France and 
                                                    Germany but trails the US. Weaknesses in productivity are 
                                                    apparent in some sub-sectors e.g. engineering construction
                                                 •  Investment per head employed (£4,400) higher than 
                                                    European average
                                                 •  UK companies have been successful in capturing export 
                                                    markets - export value £1.22 billion (2010)  - but  more 
                                                    services were imported than exported. There is potential to 
                                                    expand into export markets [Case Study]