Insights from 2022 and what we can expect for 2023

Hear from Mark Williams, our GM Strategy and Insights, about the trends and developments he's seen this year and predictions for 2023.

Mark Williams, our GM Strategy and Insights, spoke to us about the trends and developments he’s seen across Construction and Infrastructure this year. He also talks about what we can expect to see next year.

Q: Mark, tell us a bit about yourself and what you do.

A: I lead a team that advises the Tertiary Education Commission. We also develop Workforce Development Plans for industry that identify issues and opportunities and forecast what having the right people in the right place, with the right skills, at the right time, looks like. 

My background is in the vocational education sector, which includes being the Insight and Innovation Manager at BCITO and leading projects focused on increasing the participation and success of women in trades, investigating the return on investment from training, and analysing industry training penetration.   

Q: Could you give us an overview of the current workforce trends in 2022 within the construction and infrastructure industries, and what are the key highlights for industry to be aware of?

A: There’s been a massive demand for labour. And the pipeline of work is increasing month-on-month. There’s been an increase in people training too. It was interesting looking back when companies were identifying a demand for having a skilled workforce. It’s not always the desirable subject, but it’s THE issue that keeps employers up at night.

Q: What are your predictions for workforce trends in 2023?

A: It’s interesting, everyone is forecasting a dip, but we’ve seen continued growth in the pipeline of work. There’s now over $300 billion in the pipeline. In terms of how the trend is tracking, even if there was nothing by way of building consents in 2023, we’d still need skilled people. I still see 2023 as a strong growth year for the building industry.

Q: How do our skills shortage statistics compare to other countries, and are there lessons to be learnt from other countries that we can apply?

A: There’s been a lag in letting people into the country; we’re also competing on the dollars. Other countries like Australia are outbidding us, and we’re struggling to win people’s hearts and minds to get them to come here.

We must be as competitive as possible, especially in a global market.

Retaining and encouraging people to want to stay here is a challenge for employers. It’s tough to compete on the dollars but creating a good working environment and a good culture can help make a difference.

Q: Do you have any practical tips for industry to help minimise disruption and make the best of the current environment?

A: I think being aware of what work there is. There is far more work than there are people. The questions are where do you want your company to be in the next five years, and where are your future workers coming from?

One of the trends is contracting people rather than employing them. However, this can eventuate in a breakdown in workplace culture and a loss of opportunity to create loyalty.

Q: Māori are currently underrepresented within the trades - why do you think this is, and how can we change it?

A: Interestingly, I’d say for vertical construction, the numbers at an apprenticeship level are at, or better than, the percentage of the population. The issue concerns the number of learners doing apprenticeships at level 4 in the New Zealand Qualifications Framework. But the number of people learning below apprenticeship level is far higher for Māori and Pacific peoples.

So, it’s imbalanced how Māori and Pacific peoples feature in the workforce. Progression in the trades and within businesses into leadership roles is important. We need to see more of that.

Q: Where will new people joining construction and infrastructure come from in 2023 and beyond?

A: If history teaches us anything, the largest group of people tend to be career changers.

So, thinking about the skill sets that those people bring with them, for example, communications, IT ... how can we recognise and utilise those skills? How can we identify and build on them? More than half are choosing the trades as a career.

Q: What are some changes that Waihanga Ara Rau is working on implementing to help reduce skills shortages?

A:  One of the things is increasing the skills and knowledge of people through training. The more people there are in training, the more productive we become, and we’re seeing a ROI for employers and their investment in people and training. We’d like to see more support for soft skills, for example, some of the culture-developing things (site leadership environment). We look at the demands across the sectors and see a demand for first-line leadership roles - supervisory capability.

Q: We can provide all the insights and statistics in the world, but how do we get industry employers to act -  do we give them practical advice or just the findings from the WIP data?

A: I think a combination of both. Giving people information allows them to make decisions for themselves.

We can give them resources, but people must make the transition themselves and often, employers are busy working in the business rather than on it. But there are some game changers, such as Apprenticeship Boost in conjunction with Fees Free. Those have had a positive impact on people training. 

Those interventions that we help support and deliver are some of the game changers. If the Apprenticeship Boost scheme were to continue beyond 2023, that would be a good focus and could help with retention and drive the upskilling component.

Q: Are we heading for a ‘bust’ - our industries are cyclical, so where are we right now?

A: Major impacts have caused the pipeline of work to change. The global financial crisis (GFC) was a case in point. But one of the things we did was shed a whole load of the workforce, which created a hole that we’re digging ourselves out of now.

COVID hit, and we had a different response. We supported apprenticeships. 

We counteracted and learned from the loss of capability that we saw in the GFC and have seen growth in the industry as a result.

If you can break the cycle and learn from past instances, there doesn’t need to be a boom and bust.

Given the pipeline of work, if we can retain the skilled people, there’ll be a positive economic impact. We have a massive pipeline of work - no reason for a bust.