The latest quarterly Building Engineering Business Survey, conducted by leading electrotechnical trade body ECA in partnership with BESA, SELECT and SNIPEF, reveals an expected bounce back for the sector in Q2. Materials shortages and cash flow continue to affect the sector. But recruiting and retaining the right calibre of staff is now the biggest curb on business growth.
A rise in apprenticeship recruitment shows a recognition that investing in people is the key to future prosperity. Almost a quarter (24 percent) of firms said they were hiring more apprentices than last year. Almost a third (32 percent) plan to directly employ more staff than in the past, showing the value of keeping qualified people in the business.
Andrew Eldred, ECA’s Director of Workforce and Public Affairs said:
“We are delighted to see more firms taking on apprentices, but we are not out of the woods yet. With the rapidly changing electrical landscape, we need double the numbers to make the transition to net zero a reality”.
Almost half (43 per cent) said tender enquiries have increased in the last quarter. The biggest challenges to taking contracts are finding and keeping the right calibre of people, forecasting inflation, navigating risk and cashflow issues.
Retentions are still the top issue affecting cashflow. Nearly 80% (79 per cent) of respondents had up to 3 per cent of their turnover held in retentions last quarter (average profit margins are 2.5%) and 70 per cent were paid a minimum of 30 days after the work was completed. Hope is on the horizon, as nearly a quarter (24 per cent) expect payment behaviour to improve during 2022, because right now the economy is buoyant.
Rob Driscoll, ECA Director of Legal and Business said:
“Businesses must ensure their pricing is versatile and reflects the risks. In a market suffering 20%+ inflation on materials with longer lead-in times where suppliers are repricing up to 4 times a day, they must be prepared to walk away, rather than accept negative margins at the point of delivery”.
Fiona Harper, Director of Employment & Skills at SELECT, said:
“The UK-wide rise in apprenticeship recruitment is an encouraging sign and follows the 800 new electrical apprentices and adult trainees taken on in Scotland in 2021 – the highest figures for 12 years. With colleges preparing for a further healthy intake in 2022, it’s clear that there is an appetite for joining the construction sector.
"However, it’s vital that we don’t rest on our laurels and that we continue to nurture and encourage the talent of tomorrow to ensure that recruitment keeps pace with technology and the demands of our journey to net zero.”