More than 40% of construction companies expect layoffs

The cross-industry People Survey was conducted by Build UK on behalf of the Construction Leadership Council (CLC) in early June 2020 to provide a picture of how reduced workloads following coronavirus (COVID-19) may impact construction workers.

To understand the impact of the virus on employment, the People Survey asked about employment levels three months ago (March) and projected employment levels three months from now (September).

• Respondents currently employ 89% of their staff directly, with the remaining 11% being self-employed or agency workers.
• On average, 32% of direct workers are currently furloughed, and all sectors of the industry have joined the Government’s coronavirus job retention scheme at some point.
• The number of directly employed workers across the industry is expected to decline by 7.7% by September.
• In the longer term, 43% of respondents anticipate layoffs that will affect up to 20% of their workforce.
• The number of self-employed and temporary workers across the industry is expected to decline by 26.7% by September.
• The most important users of self-employed and temporary workers are home builders, specialist contractors and contractors. While housebuilders and specialist contractors expect to reduce their numbers by just 4% and 11% respectively, Contractors are looking to reduce their numbers of self-employed and agency workers by 42%. The remaining sectors most likely to reduce their numbers are Material Suppliers by 54.5% and Consultants by 45.6%.
• Combining this data shows a projected 9.9% reduction in the construction workforce by September.

The Next Generation The future talent pool is essential to the long-term sustainability of the industry. The People Survey aimed to understand the direct impact of the coronavirus pandemic on the number of apprenticeships and graduate programs across the sector.

Apprentices

Half of respondents employ apprentices, with the highest numbers among contractors (26%), specialist contractors (20%) and home builders (19%).

43% of apprentices are currently on furlough and 6.7% are likely to be unemployed by September.

In the longer term, 10% of respondents expect apprentices to be laid off. 60% of companies expect to employ fewer interns during the next recruitment in September. 38% want to hire the same number of employees, and only 2% plan to hire more. The apprenticeship fee is paid by 32% of respondents, and 84% of them employ apprentices. Only 34% of companies that do not pay an apprenticeship contribution employ apprentices.

On average, apprenticeship levy payers expect to have lost 31% of their levy pot at the end of this year because they will not be able to spend it within two years.

Graduates

Only 21% of respondents have higher education. Clients are most likely to run programs – 50% say they offer them, and each provides an average of seven graduate places.

On average, consultants (29), housebuilders (12) and contractors (10) provide the most graduate placements, although only a third of them run projects. The number of places available to graduates is expected to fall by 32% overall in the next intake, although construction companies and contractors expect a smaller decline of 8-12%.

Training and skills

Giving the industry the skills it needs now and in the future will be key to its success, and the People Survey has collected data on current training needs to help prioritize the limited funding and resources available. 87% of respondents will provide training to their employees, and 49% expect to provide it online in the next three months.

By September, training providers expect to have 56% of their courses available online. However, two-thirds of training providers and respondents are optimistic that face-to-face training could resume by then.

The majority of respondents (71%) are confident that they can access training that meets their needs. The most frequently identified training needs were health and safety (61%), leadership (33%), technology (32%) and people management (32%).