News

News
Neutral Vend
Dec 2021

By Richard Gelder, Client Engagement Lead for Construction & Property

Alongside the rising cost and shortage of materials, the recruitment of skilled labour, managers and professionals is currently the most urgent priority in the UK construction sector.

According to the Office of National Statistics, vacancies in the industry hit a new all-time high in September this year and topped 40,000 for the first time since 2001.

Currently there is much thinking at government level on how to solve the skills crisis, including from a new Building Back Better commission that has recommended the creation of major regional training hubs to increase the construction workforce.

This kind of solution feels like a long-term fix however, and it begs an obvious but serious question: how exactly can the industry solve its skills crisis in the short-term, scale up to meet 2022 targets – and at the same time stay 100% compliant with employment regulations?

With this in mind, and with those end-of-year and January planning meetings coming up soon, here’s my take on the top five challenges that hiring managers face and how they can solve them.

1    The need to source more temporary workers

The Institute for Public Policy Research has warned that new policies are needed to address the 750,000 construction workers that could retire or be on the verge of retiring over the next 15 years. It also says that 20% of construction workers are currently aged under 30, fuelling a future skills shortage that has already been affected by Brexit and new immigration rules.

One solution to this is to source more temporary skills to fill gaps. However there is currently high demand and competition for self-employed and temporary agency workers that is putting pressure on available numbers.

To solve this problem, hiring managers need to look beyond their limited number of preferred agencies who are likely to be struggling to fulfil requirements and explore different models to resource temporary workers. One option is to explore the potential of partnering with a Neutral Vendor Managed Service Provider. This will increase choice and quality of candidates and provide greater access to a diverse supply chain of suppliers.

2    Managing issues around foreign workers and new compliance needs

The new points-based immigration system that came into effect from January 2021 is making it particularly difficult for construction businesses to hire skilled foreign workers. Next year is likely to be no different. There is also confusion over the responsibilities of employers to undertake right-to-work checks.

Trade associations like Build UK are actively lobbying government for guidance that is easier to follow, but in the meantime, uncertainty is putting further pressure on businesses that need to navigate an increasingly complex maze of red tape that is hindering recruitment at scale. The best way for hiring managers to solve this problem is by partnering with a recruitment specialist that can complete all checks necessary for compliance on their behalf.

3    Dealing with IR35 compliance

Changes to off-payroll working rules brought in with IR35 remain  a challenge within the UK construction industry. Contractors need to examine the way they operate to make sure they stay compliant. In particular they need to audit their working practices to determine who falls inside of IR35 and decide the employment status of every worker, even if they are working through an agency.

With the need to recruit ramping up, overcoming this challenge efficiently is becoming more urgent by the day. Again, partnering with a specialist that will complete these checks as part of their service will help.

4   Challenges around modern slavery and clarity of worker status

With the need to recruit temporary agency workers rising, there is also an increasing need for construction employers to make sure all the candidates they engage are safe and eligible to work.

Currently, this is usually handled via a retrospective review process. In many cases this means temporary workers are often in place for several months before being identified as non-compliant.

Hiring managers need to review these audit and screening processes – and make them much more proactive – if they want to build a more stable temporary workforce. This will also help avoid non-compliance caused by forged right to work documents, breaches of Agency Workers Regulations or serious offences like modern slavery.

5   Controlling and reducing costs 

Many hiring managers currently find it difficult to get a clear picture of their organisation’s engagement with contingency and agency workers. Many of these problems stem from the increasing number of suppliers many contractors are now having to use to source the temporary workers that they require to meet demand.

Under this model it is time-consuming to gather reports across multiple agencies, and almost impossible to receive data in a consistent format to get visibility on what they’re spending on who, where and why.

This lack of data prevents accurate forecasting and is a barrier to insight that could help control costs better. To solve this problem, hiring managers should also be looking at ways they can develop access to real-time business intelligence that will significantly improve visibility and forecasting.

At MatrixSCM, we specialise in solving these challenges with a Neutral Vendor approach that delivers increased choice and quality of candidates, guaranteed compliance checks before candidates start a project and management information that provides greater visibility over spend and usage of agencies.

If you would like to find out more about our approach, we’ve recently produced a buyer’s guide for hiring managers in the construction sector that will help you explore your options.