Construction skills shortage exposed

Election infrastructure spending promises will expose the construction sector’s skills and talent shortage, building industry veteran Aaron Muir says.

Mr Muir, a construction management consultant, is calling for significant new industry recruitment.

"New Zealand is a small market and we already have a huge project list on the books, for which construction companies are struggling to find the skills and talent to execute."

The construction industry was already under pressure from a pre-election programme of public and private works valued at $125billion over the next 10 years, according to Infrastructure New Zealand.

The additional infrastructure spending promised by the National and Labour parties during the election campaign added up to $14billion to existing work.

"Firms need to innovate in order to find sufficient qualified and experienced staff to deliver existing and new projects.

"The infrastructure commitments are great news for New Zealand, and we certainly welcome the investment. But we already have a skill and talent shortage and this is going to make an already acute situation much tighter."

National was promising $14.36billion in new infrastructure spending, along with already announced spending. The new spending included 10 new roads of national significance, transport and commuter rail and housing among the big-ticket items.

Labour had pledged a range of large rail projects, regional transport initiatives and housing among infrastructure items totalling $8.14billion.

There was a need to get smart in recruitment by not only training more New Zealanders but targeting overseas markets for the project managers, civil engineers and surveying technicians New Zealand needed and in the next few years, Mr Muir said.

Mr Muir was part of a consortium of public and private companies and organisations, led by HainesAttract and its migration talent attraction brand Workhere New Zealand.

In October, WorkHere launched a campaign called LookSee Build New Zealand to attract some of the additional 2282 higher-skilled jobs the Ministry of Business, Innovation and Employment estimated were needed to meet current demand. MBIE estimates predated the election infrastructure announcements.

Both National and Labour have proposed changes to the rules allowing in skilled migrants, reducing the number of people allowed to come into New Zealand to work.

New Zealand Certified Builders Grant Florence chief executive said his organisation had been advocating for the Government to develop more robust minimum standards for training and skills, create a formal standardised training pathway linked to the licensing regime to ensure builders  increased their business acumen and skills beyond those provided by apprentice training.

NZCB also wanted tougher penalties introduced for those who did not comply with requirements.

A key challenge for the industry was sufficient supply of qualified and experienced builders to keep up with demand.

"A shortfall brings inherent building quality risks as well as other implications for New Zealanders who simply cannot get a builder."

The current situation arose because of the cyclical nature of the industry, he said.

When demand was, as was the case in 2009 and 2011, the apprentice pipeline reduced and skilled participants left for "greener pastures".

That meant a lot of catch-up when the industry was in an upswing, creating a mismatch between supply and demand for years when the sector was booming.

As a major spender on construction, the Government could play an active role in smoothing the boom-bust cycle by staggering its programme of public infrastructure development and/or actively planning for counter-cyclical spend on major construction challenges, Mr Florence said.

"Now is the time to be having that conversation, while we remain at the top of the cycle — not when the bubble bursts."

Maintaining apprenticeship training through good times and bad was important for ensuring the sector’s long-term sustainability and meeting the New Zealand public’s expectations of supply and quality of builders who were critical of the economy,  he said.

Builders were understandably typically reluctant to take on apprentices when the sector was in a downturn because of the uncertainties and challenges they already faced in their businesses when times were tough.

The Government could play a role in addressing the problem by creating financial incentives for builders to take on apprentices during a downturn, creating financial incentives for people who began apprenticeship but never completed it to complete their training, Mr Florence said.

Even an awareness campaign to stimulate interest in a career in the trades would help.

"New Zealand will need more than 65,000 construction workers over the next five years yet people leaving school are often unaware of the career opportunities in this sector."

Otago-Southland Employers Association chief executive Virginia Nicholls agreed.

The association, BusinessNZ and other industry groups had been working with the Ministry of Education and Careers New Zealand to determine what employers thought were the types of skills required to be successful at work.It covered behaviour, attitude, beliefs and personal qualities such as self-management and resilience.

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