2018 Perspectives

The skill challenge

This year is set to be an active year for our engineering, construction and contracting businesses – provided they can find suitably skilled jobseekers to fill the industry’s swelling staffing gap. Jason Walker, managing director, Hays New Zealand.

IT’S AN INDICATION of just how wide the civil construction and engineering talent gap has become that despite promising to reduce net migration by between 20,000-30,000 people, the government is working with the construction industry to attract suitably skilled workers to New Zealand from overseas.

With more than $125 billion of infrastructure works planned, these professionals will certainly be needed as vacancy activity soars across the country’s civil market.

This comes off the back of an active 2017 which saw an improving economy, sturdy inflation, net migration growth, positive GDP forecasts and a flow of government and private projects. Naturally then, in 2018 the country’s biggest ever infrastructure and housing programme will add significantly to staffing requirements.

However, the civil sector is already experiencing substantial labour shortages. The Transmission Gully project absorbed a lot of workers, making it more difficult for smaller firms to attract the skilled workers they require. A growing population led to an increased number of projects in Auckland and Queenstown while Central Otago is booming.

Meanwhile the last of the anchor projects have started to gain momentum in Christchurch, earthquake repairs are underway in Wellington and infrastructure recovery work in Kaikoura and North Canterbury is adding to activity.

No wonder then that skill shortages are a growing concern. This is supported by findings from our recently released 2017 Hays Global Skills Index, which highlights the country’s struggle to keep pace with labour demands.

The report, published in collaboration with Oxford Economics, shows that despite an existing pool of labour, employers still find it difficult to fill jobs that require highly-skilled professionals.

In the civil engineering and construction sectors this includes civil engineers. Land development, especially in Auckland in response to the Unitary Plan and housing crisis, the busy roading and three waters sectors, and the development of existing infrastructure in order to keep up with and support new developments are fuelling this demand, especially at the mature graduate level through to senior technical delivery candidates.

Land surveyors remain in demand too, especially licensed surveyors. These professionals are needed on a wide range of projects across New Zealand, from roading and highways to commercial and residential land development. As is the case for civil engineers, demand exists at the mature graduate level through to senior technical delivery candidates.

Bridges and civil structures engineers are also needed as New Zealand looks to upgrade existing infrastructure. This is creating more demand for professionals with experience in bridges and civil structures. We are also seeing a significant number of new developments across the country to support our growing towns and cities.

Transport engineers and planners are required too in response to upgrades and growth of the infrastructure network, which includes an increasing number of roads and highways projects.

Candidates with large-scale project experience and experience in seismic strengthening remain at a premium also.

Drafters with Civil 12d, Civil 3D or Revit experience are in high demand too, as are machine operators (excavators, diggers and drivers) in response to the amount of land development and subdivision work underway. The shortage of jobseekers with the appropriate qualification adds to this requirement.

Given demand, it should come as no surprise that staff turnover has risen as workers actively seek better opportunities in a dynamic market that requires their skills. They’re not always on the move for money though, with improved working conditions or more exciting and challenging projects sought for career development purposes.

Jobseekers have also started to think more about a role’s longevity. It has become more important to jobseekers that a contracting business has a sustainable future project workload.

For their part, employers want to see jobseekers who are genuinely interested in working for their organisation. However, they are going to need to relax their requirements around wanting candidates with local experience and knowledge of local projects. Given the campaign to attract thousands of construction workers from overseas, employers need to be willing to utilise those without local experience. Thankfully, most are.

In other trends, employers are creating positions for quality talent since the forward workload is promising. This is a sensible strategy, particularly as 2018 will only see skill shortages intensify.

Meanwhile temporary assignments are growing in popularity and are now viewed as a viable career option rather than an occasional opportunity. Jobseekers are attracted to the wider range of experience, new contacts and exposure to different solutions and ideas that temporary assignments offer.

For employers, temporary and contract staff provide a flexible workforce that can be released at short notice without financial penalty. The on-demand and as-needed nature of temporaries is also far more cost-effective than keeping skills unessential to the day-to-day operation of a contracting business in-house. As a temporary employee is only paid for the hours worked, employers keep a tight control on their staffing costs while maintaining productivity at optimum levels.

In a final trend, and as we are seeing across all industries, 2018 will see additional digital transformations. Many contractors are already using mobile technology to access information and collect and review data to make better and faster decisions onsite.

We expect to see more organisations – driven predominately by the large engineering, construction and contracting businesses – looking at how artificial intelligence, robotics and autonomous vehicles can increase delivery and save costs on projects.

While there are clear benefits, the cost of implementing such technology remains a major hurdle for most. Still, it will be interesting to watch what technologies the larger industry businesses invest in.

This article first appeared in Contractor Perspectives 2018.

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