People build infrastructure: Developing human capital

Governments are planning trillions of dollars in infrastructure investment over the next decade. But are there enough capabilities in the market to deliver on those ambitions? 

Infrastructure is built by people. Engineers, project managers, bricklayers, designers  - the list goes on. And that means the capacity of any government to deliver on their infrastructure objectives is directly related to their ability to attract the right people with the right talent and capabilities.

However, there is growing concern that some markets may be about to face a significant skills shortage, just at a time when these skills are needed more than ever. 

In part, this will be driven by simple demand and supply equations: the sheer quantum of investment being planned by governments around the world will likely far outstrip the current supply of workers and capabilities. Yet, even before this surge of infrastructure investment, some markets were becoming concerned about growing skills gaps in the industry.

“We're filling our vacancies today. But when you look ahead just a few years from now, you start to see a significant potential for skills shortages,” said Harvey Francis, Executive VP and Chief HR Officer at Skanska UK Plc. “On the one hand, we have an aging workforce that will be retiring. On the other hand, we have trends like digitization and offsite manufacturing that are creating demand for new skills across infrastructure and construction more generally.”

While the sector has been somewhat slow to digitize in the past, new technologies are now starting to be adopted more broadly. And that is changing the skill sets that are in demand.

“We are already seeing increased pressure for digital capabilities right across the technical fields, whether it's in contractors, designers, utility operators or suppliers,” added Sir John Armitt, Chairman of the UK's National Infrastructure Commission. “I suspect it is demand for those skills, in particular, that will lead to shortages in the near future.”

So, whose job is it to ensure that enough of the right skills and capabilities are available to meet future infrastructure demand?

National and local governments certainly have a massive influence, across a range of levers. Some national governments, for example, have been adapting their immigration policy in order to make it easier for companies to attract the labor and skills they require (others, paradoxically, have perhaps inadvertently made it harder). Local governments are often also very active in working with local businesses to attract talent to their cities.

Governments can also encourage private companies to invest more into the development, training and retention of key skills by, for example, outlining a long-term pipeline of work. “The national infrastructure plan was a very welcome first step in terms of creating a longer-term view of government plans,” argued Harvey Francis. “By giving companies greater certainty in terms of the pipeline, the industry is able to build better business cases for continuing to invest in skills development and training. The UK Construction Playbook is also very helpful in terms of setting out sustainable procurement criteria which encourages the right focus.”

Some governments also take a more direct approach in encouraging skills training and development. In the UK, for example, the Construction Industry Training Board (CITB) uses a levy and grant system to help businesses ensure they have the skilled workforce they need. However, not all these schemes have delivered on the outcomes envisioned.

“I've never been entirely convinced about the role of government in skills training,” argued Sir John Armitt, who also Chairs the City and Guilds of London Institute, an educational organization focused on training and accreditation. “Government tends to get involved in training when they believe the private sector is defaulting on their obligations. I believe training is the job of responsible employers. And I have always argued that the best place for government to intervene is at the school level. If you are waiting for the government to step in, you are looking at the problem through the wrong end of the telescope.”

Given the rapid pace of digitization, particularly for skills training and education, there is a broad expectation that the way companies develop their skills and capabilities will change.

To get an understanding of the trends in digital upskilling, we reached out to Microsoft to find out how they are dealing with this shift. “We've seen organizations from a variety of industries go through incredible digital transformation this year, with new technologies and solutions that often require new skills,” Carolyn Byer, Human Resources Lead at Microsoft Canada told us. “Ongoing learning is a core part of Microsoft's DNA. And we are developing innovative solutions  - like Microsoft Viva  - to help other organizations enhance learning and reskilling across their ecosystem.”

Sir John Armitt agrees on the need to integrate new technologies into the training environment, pointing to the growing use of everything from e-learning to virtual reality technologies to help engineers and designers explore environments and learn technologies virtually. “We are already seeing a shift in the way people learn in the infrastructure sector. Accreditations and certifications have largely moved online. And I am hearing everyone from engineers to bricklayers talk about how they might use VR in their training programs,” he noted.

With significant numbers of skilled professionals on the cusp of retirement, many companies are also placing increased focus on skills transfer and apprenticeships. “Coaching and mentoring has been central to our talent development for some time,” noted Harvey Francis. “It's a great way for the older generation to pass skills, experience and insights to the next generation coming through.”

One way to bridge the potential skills gap is by broadening the workforce. That means actively looking outside of the sector and at non-typical education routes that could bring important skills and perspectives to the industry. 

On the positive side, many governments and education authorities are now placing greater focus on STEM subjects, particularly focused on bringing women and under-represented groups into technical trades like engineering and construction.¹

Private companies are also keenly focused on encouraging diversity and inclusion in their workforce. “We're working hard to understand the experiences of our underrepresented groups and how they interact with Skanska’s culture,” noted Harvey Francis. “We want to make positive interventions in our culture to ensure we are truly inclusive of all underrepresented groups.”

Yet, as Sir John Armitt noted, school systems generally tend to do a poor job communicating the opportunities available to those considering future vocations.

“There is very little information to help youngsters understand the opportunities of working in different sectors,” he said. “Teachers simply don't have the first-hand experience to provide good guidance on different career paths and they struggle to find time in the curriculum to get people from industry to come in. Young adults are leaving school without knowing anything about construction except what they hear from their parents or see on YouTube.”

Harvey Francis agrees. “Unfortunately, people still see general construction as being towards the less sophisticated end of industry and that's just not true. Construction is very sophisticated and a very intellectual career path. But I think we need to do a much better job helping people see that.”

Given the growing demand for new infrastructure, new technologies and new digital capabilities, it is clear that no single party is responsible for 'upskilling' an industry; it is an issue that must be addressed from all sides and from a local national and regional level. “Addressing the skills gap requires close collaboration between the private sector, the public sector and non-profits,” suggested Carolyn Byer at Microsoft Canada.

Sir John Armitt agrees. “The only way out of this is through a much longer collaborative approach that brings the construction industry together with local employers, local educators, schools, colleges and training bodies. We need to be thinking long term about how we deliver a pipeline of infrastructure over the next 30 years or more. And we need to be thinking about how we are going to work together to provide opportunities for young people over the same time period.”

That, in itself, creates a new skills gap. “Collaboration is emerging as a critical capability in the way we work with customers and stakeholders,” noted Harvey Francis. “I suspect we will see much more demand for capabilities that encourage collaboration in the future.”