I have been away from the property and construction scene for only a couple of years but during that time I’ve continually watched developments and changes as they have occurred. I recall predicting the tale of two cities several years ago with housing shortages in Auckland and the Canterbury rebuild likely to make up the lion’s share of construction activity. That has certainly been the case, and while construction has not been as strong as it is at present for many years, which we are all very happy about, it brings with it other challenges that need to be managed.
Everyone knows the boom/bust nature of the construction industry and quite a lot of energy has gone into trying to resolve this, or at least smooth the peaks and troughs as much as possible. But, given the high level of investment that property requires, it is understandable our fortunes will closely mirror the country’s economic conditions. This roller coaster is something we have to live with I’m afraid.
And things are never the same after a recession. As the landscape changes different issues are brought to the fore and so is the case this time round. The global financial crisis (GFC) of 2008 lasted for a considerable amount of time and construction plummeted to its lowest levels since records began (in the 1960s) and stayed extremely low for several years. As a result, the construction sector effectively ‘restructured’ itself to accommodate this change at circa 15,000 new residential builds per annum following a high of just over 30,0000. Of course, with our training system being an employment-based apprentice regime it is very difficult for companies to take on an apprentice when they are struggling for work, and consequently, apprentice numbers almost halved.
When the economy and the sector recovered, it did so swiftly on the back of the Canterbury rebuild and the Auckland housing shortage. Not surprisingly we now have a skills shortage, which, while felt across New Zealand, is most acute the Auckland, Waikato and Tauranga regions. This shortage has bought not only capacity issues (not enough skilled workers) but also capability concerns (poor workmanship and rework in Auckland and Canterbury) as firms are stretched and quality control comes under pressure.
While apprentice numbers are on the rise again, taking into account the lag effect of training, we are chasing our tails on supplying the market as firms take on apprentices once work is secure. We estimate we are about 3,000 apprentices short of what we need, and we are quickly approaching 10,000 currently in training - that’s a 30% shortfall. Some pundits are saying the Auckland demand will last for years, but I am not so sure. Perhaps I am a bit long in the tooth and have seen it all before, but the housing market can ’turn on a dime’. The market is so closely linked to our country’s fortunes that, housing shortages or not, we will not build new homes in the face of tough times. What this does mean is, when things eventually recover, we come under even more pressure to supply a skilled workforce as we fall further and further behind the equilibrium.
It follows that one of the key challenges for BCITO is to try and predict our skills demand at any given time, and as best we can minimise the over and under supply of apprentices. This is no easy task so the work we are doing around workforce development is critical to getting clarity around this. Our workforce development plans are specific to each trade we cover and while they won’t be perfect, they can be refined over time. They will also be of great benefit to the wider sector to help plan for forecast expansion or retraction. This initiative will hopefully help us manage our way through the boom/bust cycles with more confidence and control.
Another key challenge for us is the traditional source of our trainees is coming under increasing competition, and the changing nature of our population requires us to look carefully at the make-up of our apprentices and where we attract them from. One just needs to look at the population mix in a couple of decades’ time - our training and development must reflect this structure if we are going to be successful. Amongst other things we have to broaden our recruitment base, have more women in the trades, greater Asian, Maori/Pacifica representation while improving our qualification completion rates along the way.
We believe we also have to produce more than just apprentices who are technically competent. While that is a prerequisite, these days workers need to be resilient, adaptable, dynamic and critical/creative thinkers to be successful. The Auckland and Canterbury problems are today’s problems. There will be others and more GFCs in the future. It is our job to help develop our young learners as best we can to cope with these uncertainties.
Ruma, the BCITO Board and the entire BCITO team have done a tremendous job in getting the organisation to the strong position it is in today. But, as you can never stand still and BCITO cannot achieve these things alone, we need to partner with industry and Government as such issues are best approached collectively.
Chief Executive, BCITO
Press release: Currently only 2.4% of students move directly into an apprenticeship with BCITO after they leave school. We're trying to change that.
New Zealand Management Academies Ltd (NZMA) hosted their first Women in Construction Breakfast on 10 May with a group of high achieving female construction talent inspiring NZMA students.