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How a skills gap is holding up digital transformation in construction

Explore the paradox preventing construction businesses from investing in machine control and automation technologies.

Key Takeaways

  • Facing a serious labour shortage and skills gap, construction businesses need to accelerate their investment in digital technologies.

    Facing a serious labour shortage and skills gap, construction businesses need to accelerate their investment in digital technologies.

  • Machine control and automation technologies, such as GPS and laser-guidance systems, are already in use, but the pace of adoption across the industry is slow.

    Machine control and automation technologies, such as GPS and laser-guidance systems, are already in use, but the pace of adoption across the industry is slow.

  • Digital technology icon

    The incremental pace of digital transformation in construction is making it harder to bring new workers into the industry, while the lack of digital skills is preventing further investment in digital technologies.

  • graph denotating increase with upward line

    Client demand is set to increase the need for the adoption of digital technologies, with education and staff training being key to creating a new digitally enabled construction workforce.

Three quarters of construction companies say a lack of expertise and training is a barrier to their ability to transform digitally as a business

Skills gap

The Challenge

The construction industry faces a serious labour shortage. Since 2017, the number of job openings in engineering and construction businesses has almost doubled, yet the number of new hires has increased by less than 10%.1

Adding to this is a digital skills gap that is preventing further adoption of new machine control and automation technologies. Three-quarters of construction companies say a lack of expertise and training is a barrier to their ability to transform digitally as a business. So, how can they overcome this challenge and make the most of technologies that have the capability to improve productivity and profitability in an industry known for working with tight margins?

Profile picture of Chris Sleight, Managing Director, Off-Highway Research

Chris Sleight Bio

Chris Sleight is recognised as one of the world’s leading authorities on global construction equipment markets. He holds an honours degree in civil engineering and, in a 24-year career with KHL Group, has edited the world’s two leading magazines for the industry – International Construction and Construction Europe.

Following the acquisition of Off-Highway Research by KHL in June 2015, Chris transferred to the market intelligence, forecasting and management consultancy business – assuming the role of Managing Director of the business unit at the start of 2018.

The Solution

According to Chris Sleight, Managing Director of Off-Highway Research, construction needs to undergo a cultural shift to better understand and demonstrate the benefits of digital technology. Some of this will be driven by client demand, but education and third-party expertise has a huge role to play in bringing new workers armed with digital skills into the industry.

Digital transformation in construction is an incremental journey

Construction workers in hard hats looking at ipad

When you think of automation, it is tempting to imagine driverless vehicles and machinery working away seemingly without the need of human intervention. The picture in construction is far from that vision, but there is still a wide range of technology already in use – most often in the form of machine control tools that help operators work more productively.

“Automation is really difficult in construction because there are so many unknowns,” says Sleight. “The number of times an excavator has dug that first bucket full of earth out of the ground to find a water main that wasn’t supposed to be there… By the nature of it, you need the human element.”

Machine control technologies like GPS and laser-guiding systems can help operators to deliver this accuracy. For instance, with GPS sensors feeding data back to a machine’s electronic controls, the height of a blade on a dozer can be adjusted automatically. And this makes the operator’s role simpler, safer and more productive.

With digital tools in place, you can make it easier for a relatively fresh operator to work with the machines and get things right first time.

Chris Sleight, Managing Director, Off-Highway Research

One challenge is that these technologies are not as widely adopted as they could be. “These digital tools have been available for a long time, around 20 years,” explains Sleight. “But there’s still a struggle for people to see the benefit in investing in them – even though they can contribute to easing the labour shortage in the industry.”

Despite two-thirds of leaders in construction viewing digital transformation as an urgent priority, it is all part of what Sleight sees as a slow pace of technological change in construction. And this is exemplified by the gradual shift towards alternative fuels.

“Moving to alternative fuels is a big one for construction,” he says. “Electrification is the focus, but it’s not as easy as talking about electric cars. There are electric construction vehicles available now, but in the realm of hundreds of machines out of more than a million sold each year. We’re talking years, if not decades for this to really take off.”

Exploring the industry’s digital skills paradox

Man in hard hat and industrial background image with icons symbolising technology

In theory, the digitalization and automation of construction processes should make it easier to bring new workers into the industry. “With these tools in place, you don’t need someone with 30 years of experience to do the job,” says Sleight. “You can make it easier for a relatively fresh operator to work with the machines and get things right first time.”

There are many reasons this has not yet become a reality. The fragmented nature of the industry means that subcontractors are often small family firms reluctant to invest in systems they have never needed before. The notoriously low-margin nature of construction only adds to this.

As new digital technologies find their way onto sites and people see the benefits, they will filter down the industry.

Chris Sleight, Managing Director, Off-Highway Research

Sleight also points to the fact that a larger cultural shift is needed. “If you’ve just spent decades built around existing systems, you have a lot of expertise in that and that’s what your people know, it’s not easy to make that change,” he says. “All of a sudden they’re expected to build things around new processes and technologies, which means we probably need a new type of talent in the industry as well.”

Construction is far from alone in this. Our latest research saw 85% of industrial leaders say that most of their workforce will need some sort of retraining to adapt to digital transformation and new technologies. This leads to a paradox for construction businesses where the need for retraining adds to their reluctance to invest. New technology has the power to supplement and support the industry with much-needed new talent, but for many businesses, there is no clear route to adoption.

Working with partners and clients to accelerate change

Engineers with digital tablet and projected plans

The resolution to this paradox will not be easy to reach. It will need a shift in approach from client organisations – a process that, according to Sleight, is already underway.

“I think the mentality is changing to the extent that some clients are now specifying technologies such as GPS, laser guidance and collision sensors,” he says. “For example, Highways England is now starting to mandate machine control technologies on its projects because it has worked with contractors who have used them before and realised the advantages of it.”

This type of incentivisation to invest in machine control and automation tools could spark an acceleration in digital transformation for construction. But much will depend on client demands.

“As these technologies find their way onto sites and people see the benefits, they will filter down the industry,” says Sleight. “But it really needs to come from the client. The client pays the bills, so they call the shots in terms of what technologies are required.”

There's technological improvement in construction all the time, but it’s more of an evolution than a revolution.

Chris Sleight, Managing Director, Off-Highway Research

Efforts to offer greater education will also be vital in overcoming the digital skills gap and bring workers with new talents into the industry.

“I don’t think construction has historically been well-promoted as a career choice, but that’s changing,” says Sleight. “People are increasingly doing vocational qualifications, which is a great choice for many and creates a wider range of digital skills for businesses to draw on as they bring in new technology.”

These changes will take time, however, and businesses will need shorter-term solutions. Sleight advises companies to make the most of the resources available to them. “Certainly, for smaller firms, it’s a case of doing your own research and self-education,” he explains. “This isn’t always easy, which is why it’s important to talk to partners and equipment suppliers. Work with them to understand the technology that’s available and how it can improve productivity and profitability.”

A bright digital future for construction begins here

Illuminated city and highway landscape at night

Despite the many challenges the construction industry faces (and the fact there are few quick fixes), Sleight is still hugely optimistic about the road ahead for businesses.

“It’s very exciting to be watching this digital evolution,” he says. “I certainly wouldn't call it a revolution. I think we have to be realistic about how long it will take to resolve these issues, but change doesn’t just happen overnight. Obviously, forecasting these days is a tricky business, but I believe we have a positive future to look forward to.”

1 2021 engineering and construction industry outlook, Deloitte: https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/engineering-and-construction-industry-trends.html

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