Why Construction Companies Should Consider Outsourcing Headhunting in These Precarious Times
Earlier this month, Arcadis published their UK Market View Autumn 2023 Report. The world-leading engineering company’s view was not optimistic.
According to the report, although the UK construction sector has grown for eight successive quarters, there are “signs of a broader slowdown”. New orders have fallen for three quarters, with infrastructure, education and health leading the decline.
However, residential construction is where the most prominent challenges lie. Taylor Wimpey, one of the UK’s largest housing construction companies, reported that they started only 13 sites in the first half of 2023, compared to 50 in the same time frame a year earlier.
Likewise, the National House-building Council (NHBC) reported a 42% drop in the number of newbuilds in Q2 2023 from Q2 2022. According to the government’s Insolvency Service, there were 2,244 construction business failures in the second quarter of 2023 – far above the 13-year national average of 1579.
Ironically, Arcadis’ report comes at a time when the need for solid construction businesses, especially those operating in the residential sector, is apparent.
Just a few weeks ago, Michael Gove reiterated his commitment to 1 million new homes by the end of this government (you can read our commentary here). The ongoing school concrete crisis highlights the desperate need for skilled repair teams.
To meet these obligations, contractors need skilled team members and managers. However, finding the right people can be expensive, and costs can’t be overlooked in these precarious market conditions.
Outsourcing some or all headhunting may be the solution for many construction firms.
In-house inflexibility
The past few decades have seen an increase in in-house recruitment teams at large organisations. The construction sector is no exception.
On the surface, in-house headhunters offer organisations certain advantages, such as an in-depth understanding of company culture and cost-savings compared to a third-party recruiter.
However, they come at the cost of a lack of flexibility, which is crucial in economic uncertainty, especially in the construction sector.
In-house teams take time to scale up; the average employee onboarding time is three months. For professional positions at large companies, this can be even longer.
Contractors must meet deadlines and may need to rapidly restructure teams or find skilled people. In-house teams may not be large enough to cope with fluctuating capacity while simultaneously hitting time targets.
Similarly, in-house recruitment teams can’t be downsized easily. This means contractors must maintain significant overhead costs for these teams when the demand for positions is low.
Wrong hires are costly for the company.
Depending on the role, a bad hire can cost upwards of £100,000. For construction firms, the risk is even greater. A bad hire can incur safety risks, compliance issues, and project delays.
These problems are unwanted at the best of times, let alone amidst the slowdown in growth in the construction sector. The solution is to find a headhunter with relevant experience in construction and a good track record.
These experts deeply understand the industry and will identify the right people. They will also be able to conduct thorough background checks and reference checks to minimise the risk of hiring an unsuitable candidate.
Smaller budgets and the relative importance of skilled positions
In economic uncertainty, construction companies often need to lay off workers to meet financial obligations. Last month, the engineering consultancy ARUP announced a series of redundancies. Likewise, the housebuilder Bellway consulted on the potential closure of two divisions.
As a company’s workforce decreases, the relative importance of skilled positions increases. They may have to take on additional tasks and work longer hours. They may also have to be more flexible and adaptable, as they may be required to work on different projects.
This problem is exacerbated by a need for more specific skills in the construction sector, particularly at the intermediate, senior and director levels.
At a broader level, skilled workers can complete tasks more efficiently and accurately, saving the company money. Additionally, skilled workers are more adaptable and able to handle unexpected challenges.
Conclusion
The UK construction sector is facing a slowdown. Residential construction is being the hardest hit.
Outsourcing headhunting can be a cost-effective solution for construction businesses seeking skilled workers.
At Pinnacle Recruitment, we emphasise long-term relationships. This gives our clients the understanding and depth of an in-house recruiter while retaining the much-needed flexibility of a third party.
Likewise, we have a 98%+ success rate in finding suitable candidates in the construction sector, including many outside the general market. If you’re looking for skilled headhunters in the construction sector, please reach out to [email protected]
Sources:
https://www.arcadis.com/en-gb/knowledge-hub/perspectives/europe/united-kingdom/uk-autumn-market-view
https://www.agencycentral.co.uk/articles/what-is-the-cost-of-making-a-bad-hire/
https://www.consultancy.uk/news/35119/arup-announces-layoffs-as-uk-construction-slows
https://www.constructionnews.co.uk/skills/skills-shortage-reaching-alarming-proportions-15-11-2022/