Part V overview
1st August 2018
Replicating and scaling the Ó Cualann model
1st August 2018
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Apprenticeship crisis within the construction industry

A recent survey carried out by the Construction Industry Federation (CIF) confirmed that 86 per cent of Ireland’s building companies have an inadequate supply of qualified tradespeople.

According to CIF, this is an alarming discovery given the well documented growth in the construction sector and future expenditure under Ireland’s National Development Plan (NDP). Skills gaps have emerged across the full range of construction trades and are most pronounced in the “wet” trades (e.g. plastering).

The shortage is so severe that there exists the potential for long-term problems, such as is the case of floor and wall tiling, where no new apprentices have been registered in the last number of years.

The top three barriers to employing tradespeople were identified as being discontinuous demand for work; onerous legislative obligations; and the costs of direct employment of construction trades.

In terms of employing apprentices, only 29 per cent of companies participating in the CIF survey currently employ apprentices. Most commonly employed apprentices are carpentry and joinery followed by electrical and plumbing.

However, the most common apprentice by number employed remains those engaged as electricians, followed by plumbing, carpentry and joinery. CIF has concluded from the low number of firms engaging apprentices that residual uncertainty remains within the industry, leading to a reluctance to employ apprentices for up to four years.

Many Irish firms in the past employed apprentices, however, current barriers include organisational downsizing, lack of government incentives and onerous legislative obligations. The legacy of the severe recession, discontinuous demand for construction output and increased reliance on sub-contract and agency labour are some of the key factors contributing to this trend.

According to the building companies taking part in the survey, this downward trend will only be reversed on the back of incentives from government; better marketing of apprenticeships and tax incentives for apprentices.

Construction firms are acutely aware of the difficulties in attracting people into careers in construction employment, and strongly believe that a targeted attempt must be made by all stakeholders to address the identified skills shortage. The construction sector in Ireland has gone through a period of extremes in the last decade, from an exceptionally high growth to deep and prolonged recession.

The backdrop to the CIF report, however, is one of favourable economic and industry conditions. Economic growth is positive, exchequer balances are improving, unemployment continues to decline and sentiment within the construction industry is strong across most sub-sectors.

The construction labour market, however, remains in a state of disequilibrium. The severe recession had devastating consequences on construction firms in Ireland resulting in company closures, redundancy and mass emigration.

At the same time, the number of new registrations onto construction education and training programmes plummeted as the industry was characterised as having uncertain career opportunities. While the economy and the construction sector are currently in a growth cycle, there remain two legacy issues within the construction labour market that may hamper the ability of the sector to reach full potential.

Firstly, for some companies, the threat of entering into another recession in the future may act as a deterrent to staff recruitment, most notably apprentices. In addition, due to the reduction in registrations on apprenticeship programmes for several years, there now lacks the requisite number of trained construction workers to meet demand for construction output across all sectors.

“Significant investment in the education, training and apprenticeship system is required if we are to expand the capacity of the industry to deliver infrastructure and resolve the housing crisis, whilst also equipping the next generation with construction skills.”

According to Tom Parlon, Director General of CIF, immediate action is required on the findings of the report. He says: “Where apprenticeships are declining, the State must intervene to make it viable for companies to get involved in training again. The CIF will work closely with SOLAS, the Department of Education and Skills and other stakeholders to ensure that labour supply meets demand through a range of initiatives in the coming years including the launch of an online skills-forecasting portal for construction.

“This research study, which was conducted independently of the CIF, presents for the first time, new knowledge regarding trends in the construction labour market. The study is a first of its kind investigation and as such, helps bridge the existing gap in our understanding of trades and apprenticeship skills utilisation within the Irish construction industry.”

He adds: “We, therefore, believe that the recommendations of this report can and should be implemented promptly to ensure that the barriers identified by this survey are addressed.”

According to CIF, the pipeline for construction activity is very strong with predictions of between 9 per cent and 14 per cent annual growth for the coming years.

In essence, the construction sector will be expected to help deliver the €116 billion capital investment announced in the National Development Programme while also reshaping Ireland over the lifetime of the National Planning Framework, up to 2040.

Increasing the housing output per annum from around 15,000 to 35,000 by 2020 – targets set out in Rebuilding Ireland – is another challenge for the construction sector, as will be the use of world class construction technologies to deliver the specialist buildings required by global companies choosing Ireland as a destination for investment.

While construction employment has grown by 50,000 since the all-time low of 2013, apprenticeship numbers have in some trades failed to record significant improvements and declined in some important subsectors, such as the wet-trades. The CIF survey shows that for many companies, particularly the SME cohort, which accounts for 99 per cent of the industry, taking on an apprentice is beyond their financial capacity.

In other words, a gap has emerged between industry and the apprentice in trades that are critical to the delivery of the housing and infrastructure which our society and economy requires.

Parlon explains: “Closing this gap will need to be a collaborative effort with the State. Significant investment in the education, training and apprenticeship system is required if we are to expand the capacity of the industry to deliver infrastructure and resolve the housing crisis, whilst also equipping the next generation with construction skills. Relying upon importing mobile labour to meet demand is not sustainable.

“Moreover, it is at the expense of growing indigenous talent and, thus a wasted opportunity. Rather, with investment, and targeted measures, the State can deliver necessary construction whilst enabling industry to providing thousands of quality careers to people.”

In carrying out the survey, individual senior representatives of each CIF member firm identified and asked to were voluntarily complete an anonymous online questionnaire. Targeting a single senior people in this way ensured that participants were of sufficiently high level to be able to speak with authority as to that firm’s engagement with trades and apprentices.

A usable response from 229 CIF member firms was obtained, equating to a 21 per cent response rate.