Why Construction Businesses Are in Need of Some Brand Building

Construction is facing enormous change right now – digitalisation and sustainability challenges.

Shortages in Grade A office space. The impact of flexible working spaces. And the uncertainty around Brexit. However, it’s in the housing supply market where we find one of the most acute problems, threatening to stunt the industry’s growth.

The home building industry has been challenged to build 300,000 new homes a year by the government to help tackle the UK’s housing shortage. With industry volumes for completed homes stuck at about 165,000 per year in 2017 and 2018, there is enormous strain on both skills and materials to increase volumes at all, let alone to meet this target in any foreseeable future.

While there are interesting developments in technology, like new generation pre-fabrication, offsite building and 3D printing, by far the biggest constraint on increasing these volumes is a lack of people and skills. This is a rapidly growing problem, with the lack of a skilled workforce growing as a concern to home builders from 27% in 2015 to 44% in 2018.

The 2016 Farmer Review, which looks into the construction labour model, draws the conclusion that “the industry has evolved a ‘survivalist’ shape, structure and set of commercial behaviours” that “is fundamentally characterised by low capital reserves and high demand cyclicality.”

The success of construction at attracting and retaining talent will become an important indicator of their competitive strength and ability to grow.

Tackling this challenge is exacerbated by the nature of the housebuilding labour market, which is made up of about 80% subcontracted people. The industry has an ageing workforce in which about a fifth of the people are within 5-10 years of retiring. Young people simply do not see construction as an attractive career choice. The fragmented nature of the market has made it difficult to address problems at an industry level. 

“The success of construction at attracting and retaining talent will become an important indicator of their competitive strength and ability to grow.”

Despite its perception problem, it’s an exciting, high technology industry. But, to attract new talent, industry leaders need to change. They need to transform their business models, marketing and culture to improve industry perception and make it a more attractive career for young people.

The fact this is an industry perception problem means brands that are seen to tackle it do well. Home builders who rebalance their marketing communications by considering their subcontractors and workforce as equally important as potential customers can gain competitive advantage because they will attract and retain more talent.

There are signs of green shoots; for example, Persimmon, a leading UK home builder is aiming to secure the skills they need by increasing the percentage of direct employees they use on their sites. This shift in their business model will have a knock-on effect throughout the supply chain.

At the same time, businesses are looking at what they can do to attract and retain talent, using the types of innovative programmes associated with start-ups and tech companies. For example, fast track programmes that can short circuit traditional promotion journeys of around 8-10 years down to 18-24 months.

Brand and communications are a powerful tool to help tackle this. As a specialist B2B agency, we see this skills crisis as a reason for the construction industry to rethink how they do their marketing communications.

At gyro, we believe it’s essential for businesses to build their brands from the inside out, which means engaging employees, sub-contractors, partners, business customers and their end customers. We also believe that employee engagement is a bellwether for the health of brands and, therefore, they should be looking at their employee NPS as a key brand metric.

It’s not surprising that we’ve seen a significant increase in clients seeking to refresh their brands to retain and attract talent for business growth. All it takes is an industry-wide effort to change one industry perception problem.