Future skills needs drivers
In thinking about emerging skill needs in the construction sector there is a need to consider likely drivers of change in skills demand. and Factors affecting future skill needs can be grouped into six broad categories [Construction Blueprint (2020a) and McKinsey (2020)]:
- Environmental: Climate change and scarcity of water, energy and other resources increase the need to reduce the environmental footprint of new and existing buildings. Currently, buildings account for the largest share of total EU final energy consumption (40%) and produce about 35% of all greenhouse emissions. Russia’s invasion of Ukraine has exacerbated energy and resource scarcity;
- Technological: The greater uptake of new technologies (e.g., BIM, Virtual Reality, 3D printing and modular construction) positively affects the operation of construction companies (making them more cost-efficient) and the quality of the final construction. It also has implications for the skills of the workforce;
- Political: Public procurement and efficient organisational plans are viewed as important to drive recovery after a decade which included the financial crisis and COVID-19. The largest surge in demand seems to be for infrastructure construction (large-scale publicly funded projects sometimes with EU support). Incentives are also provided to the private sector to engage in urban regeneration projects based on climate neutrality and energy efficiency;
- Economic: Increases in average productivity and profitability of the sector are required, especially for SMEs, to retain competitiveness and survive. These arise from changes in market characteristics such as cost pressure from tight public budgets and housing affordability concerns (McKinsey, 2020). Productivity and profitability gains can be realised through (a) the use of new methods of construction (e.g. modular or off-site construction) and innovative materials; and (b) greater emphasis on the energy efficiency of buildings (Construction Blueprint, 2020a);
- Skill mismatches: Population ageing leading to retirements from the construction workforce and the sector’s relative unattractiveness to young would-be entrants result in shortages of skilled and qualified workers. For example, in Italy current labour shortages in the sector amount to about 265 thousand workers, mainly attributed to the replacement effect whereby a combination of an ageing workforce and population decline brings about shortages. Population ageing is partially offset by inward migration (more than 25% of construction workers are migrants). Reliance, however, on migrants and “posted work” disincentivises firms to invest in the up-and reskilling of their workers;
- Regulatory: Newly constructed and renovated buildings and the way companies operate and organise their work need to abide by a variety of regulations. In addition, rigorous health and safety regulations need to be in place to maintain the safety of the workforce. This creates significant additional demand for training in the sector.
These factors, many of which interact with each other to shape future skill demand in the sector, resonate with the trends identified in recent reports by the European Construction Sector Observatory (ECSO, 2020), the European Federation of Building and Woodworkers, and the ECOSLIGHT (2021) project. Most importantly, all these factors imply a requirement for the sector to attract and retain skilled workers who will need to be adequately up and reskilled, as necessary. From a skills perspective, the European Commission points to the need for the sector to engage in a range of activities to respond to the above challenges including:
- improving specialised training to keep up with technological advances;
- enhancing the sector’s attractiveness to would-be learners in vocational schools and universities.
The effects of the green transition
Several EU policies and Directives designed to mitigate the effects of climate change specifically target construction. The European Commission’s Energy Performance of Buildings Directive (EPBD) (European Commission, 2010) targeted the improvement of energy performance in buildings, establishing minimum requirements for energy performance. This has created tight restrictions, especially in the construction of residential buildings. The goals introduced by the EGD and more specifically from the Renovation Wave require (at least) doubling the rate of energy renovation in Europe’s ageing building stock (currently around 1% per year). Accelerating the rate of renovation will require a large share of workers skilled in the use of both new techniques and new, more sustainable materials in construction (European Commission, 2021c). At the Member State level, these requirements are increasingly being addressed by regulations, such as a recently implemented law in France requiring half of the materials used in public buildings to be of timber or other bio-based materials. In turn, new regulations will drive demand for specialised workers – often highly skilled ones - such as skilled carpenters.
A key challenge to skill provision related to sustainability and renovation is the adoption of “smarter” working methods and a “less is more” approach rooted in circular economy principles with waste management and material reuse and recycling at their heart. Such approaches involve automating aspects of design and installation, the use of modern methods of production and cutting-edge technology such as data analytics for reducing material requirements through the rationalisation of standards and the elimination of avoidable waste. The uptake of industrialised methods of production that minimise waste and foster re-usability (as set out by the Renovation Wave initiative), and of waste management technologies will allow, among other things, the separation of construction waste from harmful substances allowing for its reuse (discussed in the Circular Economy Action Plan), will necessitate up- and reskilling efforts. More importantly, the full integration of circular economy principles requires substantial shifts towards systemic and circular thinking throughout the construction process.
The European Commission acknowledges that a ‘climate-neutral building stock’ is achievable only if existing jobs integrate green and circular skills and new job profiles emerge, such as professionals in building renovation, installers for advanced renewable technological solutions, and building information modelling specialists (European Commission, 2020a). This up-skilling need concerns the entire value chain of the construction process (from designers, architects, engineers and building managers, to technicians, installers and other on- and off-site workers including those in construction demolition, waste management and apprentice workers). Those working in a wide variety of jobs will need to be aware of new and upcoming challenges related to, for instance, the EU’s proposal to move from the current nearly zero-energy buildings to zero-emission buildings by 2030 (European Commission, 2018); or will need to be LEED-certified (Leadership in Energy and Environmental Design) to meet the growing demand for green construction projects. It is clear that EU Public Procurement budgets are increasingly tied to “training clauses”, which require companies to train staff working on projects to be trained in energy efficiency.
The green agenda also has major implications for skill needs related to constructing more energy-efficient buildings, retrofitting the existing building stock, satisfying sustainability requirements, and incorporating of green technologies in construction (such as a focus on circularity and waste management). Even initiatives not explicitly related to the construction sector, such as the EU’s plans to ban internal combustion engines by 2035 are expected to increase the need for green skills for construction workers (in this case through the future installation of electric vehicle charging points in buildings to facilitate the shift to an electric vehicle fleet).
According to the Construction Blueprint (2021; 2022), there are several emerging green skills which will be required to both manage the green transition and implement a variety of changes in construction processes. These include:
- knowledge of waste management and circular economy principles;
- understanding of the concept of sustainability and its application in construction;
- skills related to demolition waste management;
- on-site recycling;
- energy conservation and processes for bringing about energy efficiency;
- knowledge of green materials’ use and properties (especially for architects and designers) (ECSO, 2020).
Regarding technical and other skilled positions, the same reports identified needs for:
- up-skilling traditional craftworkers (such as plumbers, electricians, carpenters and joiners, plasterers, bricklayers, thermal insulators, and windows installers) in order to be qualified for the Nearly Zero-Energy Building (NZEB) principles. These contain a variety of skills and competencies ranging from the ability to follow waste management guidelines, the application of circularity principles when handling materials (to avoid waste as much as possible), making more efficient use of energy etc.;
- installers of renewable energy equipment (solar panels etc.);
- knowledge of safe and correct use of bio-based materials and nano-materials. These include the knowledge of skills related to wood used in construction, which is gaining pace even in large building projects as it is bio-based, recyclable and an energy-neutral material;
- material technologists, namely, technicians who understand the structures of materials and their interaction with the environment (ECSO, 2020).
The effects of the digital transition
Construction is recognised as one of the less digitised sectors, although still more advanced than some other important ones, such as transport or trade. The greater adoption of digital solutions is necessitated by factors such as technological advances, increased competition, the need for improved profitability and productivity (Akyazi et al., 2020, CECE, 2019), and rising consumer demands for shorter construction times and innovative solutions in construction (e.g., new insulation materials, “smarter homes” etc.) (ECSO, 2020). As noted by the recent surveys, the implications of increased use of digital technologies in the construction sector are significant and involve:
- creating a connection between different parts of the built environment through data sharing (e.g., feeding information from building to urban planners);
- enhancing the participation and interaction of different professionals and users in the construction process and optimising project management;
- creating trust, transparency, and improved decision-making in construction processes such as procurement and issuing of construction permits (European Commission, 2021a).
Despite the low adoption rates of digital technologies in the EU construction sector (according to a recent ECSO survey, only 21% of surveyed companies frequently used drones and about 26% utilised the Internet of Things), there is significant potential for digital transformation across the sector’s value chain.
This potential is mainly driven by mature and increasingly accessible technologies such as BIM (Akyazi et al., 2020). It is considered the most developed and utilised digital technology in the construction sector and supports the renovation, refurbishment, and maintenance of buildings. Its use is more widespread compared with other technologies such as the Internet of Things and robotics, but its use is still modest in the EU. Sensors have a variety of uses both during the construction of a building and for monitoring and maintenance, while drones can be used in scanning and feeding valuable data into dedicated software for use in the construction of digital twins. The future uptake of these technologies creates training needs but in different occupations: BIM is widely operated by designers and engineers, while it is construction workers who usually operate drones and install sensors.
Reflecting these changes, the Construction Blueprint (2020b; 2021) highlights the sector’s key skills gaps in the areas of digitalisation (e.g., smart specifications in construction), green and ecological work (such as energy efficiency, renewable energy systems, wood construction, and recycling), and management and communication (the use of soft and interpersonal skills to improve relations between co-workers in an increasingly interrelated environment).
The greater adoption of digital technologies creates demand for new types of skills while increasing the sector’s productivity. The following emerging skill needs are linked to digitalisation:
- data analysts;
- robot programmers;
- robot managers (operating also robotic systems used in a manufacturing environment);
- construction drone pilots;
- sensor installers and operators;
- AI-assisted architects;
- design automation experts (using key tools such as 3D modelling);
- cybersecurity experts;
- GIS specialists;
- innovation and integration experts.
There will also be a need to upskill / re-skill existing workers in construction sites so that they:
- are familiar with the use of digital devices on site (computers, tablets, remote controllers and other smart devices for monitoring processes and operations);
- use of cloud technologies;
- have knowledge of basic programming;
- are familiar with common data standards and KPIs;
- have knowledge of construction-specific application programmes (e.g., CAD, 3D modelling);
- have knowledge of BIM and related digital tools;
- have knowledge of digital workflow and project management platforms and advanced scheduling optimisation programmes.
New production techniques
Industrialised Construction (IC) refers to assembling buildings from prefabricated components manufactured offsite and employing standard and reusable product catalogues. Offsite construction encompasses everything from the production of small-scale components (e.g., light fittings, windows) to complete buildings (ECSO, 2020). IC potentially affords improved productivity, lower costs, better quality and more predictable production times. It also has the potential to improve sustainability and waste management. The standardisation of construction procedures off-site reduces on-site construction constraints such as bad weather, allows for extensive automation of several parts of the process, and the use of new materials. According to a recent report by Autodesk and RICS, IC is expected to deliver cost savings of up to 50% in construction times and costs, and up to 40% in carbon emission reductions compared to traditional construction (Deloitte, 2022).
New production techniques, especially the use of off-site fabrication, change the organisation of work on a construction site and therefore have an impact on skills demand. Some activities which were previously undertaken on-site will be carried out in the manufacturing sector (i.e., not construction) with skills on-site being increasingly oriented to installing and connecting the various prefabricated components and units.
In addition to long-term megatrends, the demand for skills in the construction sector has been affected by unanticipated supply chain disruptions and the rapidly rising prices of raw materials following the pandemic. Supply chain disruptions are the result, in part, of the surge in construction demand following the relaxation of economic lockdowns across Europe and the world. Producers in the global economy have struggled to keep pace with demand. There have been shortages of many materials including bricks, timber, roof tiles (with lead times for the latter extending up to six months), steel and copper, paints and coatings, electrical products (such as semi-conductors), reinforced iron, water and sewage pipes and fittings, etc.
The rising cost of energy, a consequence of the invasion of Ukraine, has also increased the costs faced by construction companies especially where they are dependent upon products which require relatively large energy inputs in their production such as cement, aluminium, and some recycled steel products. The extent to which the disruptors described above are temporary or more permanent remains to be seen. Potentially there are implications for skill demand depending upon how the construction sector reacts over the longer-term, such as using alternative materials. These all have implications for both labour and skill demand.