Infrastructure leads hiring demand in patchy construction sector
By Giles Keay on 03 May 2019
The Managing Director of Constructive, Giles Keay, recently provided his insights to Shortlist
Hiring demand has become increasingly uneven across construction sectors, while pay increases outpace those in the broader market, according to recruiters from three specialist agencies.
Shortlist asked recruiters to share their thoughts on the challenges and opportunities in the dynamic construction recruitment space.
Hiring demand for construction talent
Nick Redpath, managing director, Redpath Partners: Demand is still very strong, despite what the media says! The highest demand is coming from the infrastructure sector but clients who have exposure to government projects, commercial office and the industrial market have a number of requirements that range from site roles to executive positions. The obvious and most profound change in the last 12 months has been the decline in the residential market – we’re currently managing 65% less roles in this sector compared to 18 months ago.
Giles Keay, managing director, Constructive Recruitment: A softening is now very evident in the residential sector, and the effects of falling house prices are having an impact. Infrastructure, especially road and rail, continues to be the most substantial area of confidence and demand, particularly in NSW and Victoria. We are seeing strong demand in all areas from initial government planning and project management, design engineering and on-site construction. We are also seeing an increase in infrastructure in Queensland after many years of extreme low levels and this is being seen in an increase in levels of recruitment, especially in the design phases. In WA we are seeing patchy market conditions with a definite improvement in confidence returning but unfortunately without the consistency.
Ian Richardson, managing director, Construction People: Demand is relatively flat. Sydney is coming off the boil; Melbourne is doing relatively okay. Queensland has been static for the past 18 months. Construction has experienced incredible growth in the past 20 years; at some stage it’s got to consolidate somewhat, and it can’t keep growing at the exponential rate it has been. It’s probably just a return to normal. In Queensland it’s more permanent than contract. In Sydney, contracting is picking up as people are unsure about future workloads.
Where are the skill gaps?
Richardson: Demand tends to be highest for the ‘doing’ roles – foremen and contracts administrators, those who are out on site. There’s not that many opportunities for senior management and senior project managers. Hiring for senior roles, such as construction manager and operations manager and above, is fairly limited at the moment.
Keay: Commercial construction is fairly buoyant at present with the main areas of work being within education and healthcare, driven by government spending. We have also seen a large amount of confidence in the industrial area and some large-scale office developments are proceeding and in planning stages. A lack of good commercial candidates is an ongoing struggle in this area, as prior experience on major commercial projects is always preferred and many people on the market have been working on apartments, so their experience is not always easy to transfer to commercial.
Redpath: Candidates who have strong experience in infrastructure and government build projects are in demand nationally. Clients who specialise in this work are far more open to facilitating interstate moves and for specialist positions they will consider overseas talent due to the scarcity of local options.
Keay: Salaries in commercial and residential have dipped in the last 12 months, by up to 5%, apart from roles in the tendering and estimating area. Across the infrastructure area in nearly all states we are still seeing increases of probably 5% annually. This has definitely slowed down from the previous couple of years, however.
Richardson: Salaries and rates have been pretty static over the past 12 months for white-collar roles.
Redpath: Salaries and rates in infrastructure have increased by 8–10%, commercial construction has increased 4–6%, while residential construction is down by 10–15%.
Challenges and Opportunities
Keay: We have multiple markets that are changing rapidly. Although the volume of work is still reasonably strong, there has definitely been a significant amount of uncertainly in the last nine months.
Richardson: Government spending has been slowing in Queensland but is ramping up in NSW for infrastructure. The non-transport infrastructure sector will probably pick up in the next 12–18 months and that will drive employment opportunities in areas such as hospitals, jails, and education facilities.
Redpath: Some challenges are visas – the changes and ensuing confusion when recruiting overseas talent, as well as the extortionate cost; the uncertainty about a Labor government and the potential negative effects on the industry; and that candidates continue to conduct a job search in a scattergun fashion. It doesn’t benefit anyone, most importantly, them.
Redpath: The residential market is hitting consumer confidence and the up-and-coming Federal election has led to an air of uncertainty in business – not a great combination. However, I think the residential slowdown will plateau by the end of the year and there won’t be a contagion effect to other asset classes. We’re now in a more ‘normalised’ market, which was always going to happen following the boom of the past eight years.
Keay: Substantial government spending and low vacancy rates ensure the market looks to stay strong for the foreseeable future, especially within the commercial and infrastructure space, and is certainly the key area to take advantage of in the forthcoming year. We do expect, however, to see a further decline in residential before it picks back up again, so opportunities will be there but not as easy to find.