EXPLORING THE IMPACT OF THE AGEING POPULATION ON THE .
EXPLORING THE IMPACT OF THE AGEING POPULATION ON THE WORKFORCEAND BUILT ENVIRONMENT
CONTENTSExecutive Summary. 4Introduction. 5Skills Shortages. 7Challenges in the Built Environment. 10Methodology. 11Results and Discussion. 12Conclusions. 19By Frances Marley, Policy, Public Affairs and Communications OfficerPublished by the Chartered Institute of Building (CIOB)Twitter: @theCIOBFacebook: www.facebook.com/theCIOBLinkedIn: search ‘CIOB’YouTube: CIOBTVRecommendations. 20CIOB, 1 Arlington Square, Downshire Way, Bracknell, RG12 1WA, UKRegistered Charity No. (England and Wales) 280795 and (Scotland) SC041725www.CIOB.orgTel: 44 (0) 1344 630700Email: policy@CIOB.org.ukAny data or analysis from this report must be reported accurately and not used in a misleading context.If using any information from the report, then its source and date of publication must be acknowledged.Copyright CIOB 20153
EXECUTIVE SUMMARYThis report from theChartered Institute ofBuilding (CIOB) exploresthe effect of the ageingpopulation on theconstruction industry,including the workforce,and the impact on thebuilt environment.Using qualitative inference and analysis, this report extrapolatesthe view of CIOB members who indicate that, despite legislativechanges, awareness of the ageing population and its influence onthe construction industry has slumped.In terms of image, findings from this report also suggest thattrade roles within the industry present the greatest problem,painting construction as a dirty and dangerous field ofemployment to potential recruits. Even amongst the Institute’smembers, there is a telling realisation that constructionmanagement careers do not feature in the responses. Given thatthe uptake of digital technologies such as Building InformationModelling (BIM) are expected to increase the demand for highlyskilled labour, including managerial positions, the dominance oftrade roles in the responses is somewhat surprising. To addressthe skills shortages facing the industry, we are clear that moreneeds to be done to reverse these stereotypes.Despite the government’s decision to introduce legislationto combat discrimination in the workplace, the Institute’smembers are less aware of the ageing population now, whencompared with 2009, when the CIOB’s last report on the subjectwas published. Given this outlook, it is important to recognisethat the responsibility of raising awareness of the ageingpopulation and its effects lies with government, industry andstakeholders, and is not restricted to the actions of one party.As we discover, one of the greatest recruitment challenges willbe to overcome perceptions about older people, and their levelsof both participation and productivity in the workplace.This report also explores the impact of the ageing population onthe physical built environment. Recommendations focus on theneed to consider the challenges brought by an ageing populationas potential ‘win-win’ opportunities. Given that alterations tobuildings may benefit additional groups of individuals, such asdisabled persons, it is important to consider adaptations to theexisting building stock, which cater for the needs of an ageingpopulation, as potential solutions for a multitude of users withaccessibility needs.Furthermore, to fully understand and appreciate the context inwhich these changes to the workforce and built environmentare introduced, it is important to gain a greater insight into theglobal situation regarding the ageing population demographic.INTRODUCTIONThe world’s population is ageing rapidly and with profound results. The global shareof older people (defined as aged 60 or over for the purpose of this report) increasedfrom 9.2% in 1990 to 11.7% in 20131.According to the UN, this trend is forecast tocontinue, with older people set to account for overone-fifth – 21.1% – of the world’s population by 2050.The situation in the UK mirrors the globalperspective. The United Nations’ World PopulationAgeing Report ranks the UK 28th in terms of thepercentage of its population aged 60 or over. Thisequates to more than 14.7 million people2.This change in the ageing UK demographic can beattributed to the widespread fall in fertility ratesand increases in life expectancy. The Total FertilityRate, generally defined as the number of childrenborn to a woman of child bearing age, has remainedbelow replacement since the 1970s3. In the literatureon demographics and population trends, it is welldocumented that women born after 1958 have had, onaverage, fewer than two children4. And as fertility rateshave fallen, the UK has witnessed a rise in women’sparticipation in the labour force. In the 1970s, 55%of women who sought work were employed, whichcontrasts with 65.8% between 2010 and mid-20135.But despite these trends, women account for only asmall proportion of the entire construction workforcein the UK.Data from the World Bank shows a rapid increase inthe UK’s life expectancy over the last fifteen years,from an estimated 76 years in 1990 to an average of 81years in 20136. Improvements in health care provisionand health awareness have helped, and continue tohelp, increase life expectancy.12345674Although a great achievement of modern times, thecombination of increased life expectancy and slowingbirth rates has led to concern over the additionalburden placed on the working age population. Giventhat the annual cost of providing health and socialcare is significantly greater for older people, questionsremain as to whether these services will continue to besustainable in the future. Projections from the Officefor National Statistics (ONS) estimate that the UKdependency ratio will decline to 2.74 in 2037, downfrom 3.29 in 20177. As this ratio declines, the numberof working age adults reduces in relation to everyindividual out of work, potentially placing a greaterburden on the country’s finances and welfare system.11.7%9.2%19902013THE GLOBAL SHARE OFOLDER PEOPLEDEFINED AS AGED 60 OR OVERUnited Nations, World Population Ageing 2013, 2013ONS, Annual Mid-year Population Estimates, 2013, 26 June 2014Note: Replacement fertility is the total fertility rate at which women would have enough children to replace themselves and theirpartner (typically 2.1 births per woman)Government Office for Science, Future Identities: Changing identities in the UK – the next 10 years, January 2013ONS, Women in the labour market, 2013, 25 September 2013The World Bank, World Development Indicators: Mortality, 2015ONS, Compendium of UK statistics: Population and migration, February 20145
IntroductionSKILLS SHORTAGESData from the World Bankshows a rapid increase inthe UK’s life expectancy overthe last fifteen years, froman estimated 76 years in1990 to an average of 81 yearsin 2013.But the challenges are by no means confined to healthand social care. The UK’s built environment has acrucial role to play in terms of raising life expectancyand improving the lives of older people. This may beachieved through: measures that help the elderly to heat their homesthrough cheaper and more energy efficient means; improving the design and accessibility of buildingsand ensuring quality in the built environment; creating public spaces that improve activeness andwellbeing.The question for the industry is how best to adaptthe built environment to suit the needs of an ageingpopulation in a way that can be consideredboth financially viable and all-encompassing.The aim of this report is to gain an insight into thechallenges facing the construction industry as a resultof the ageing population. For the purpose of this report,the impact of the ageing population on the constructionindustry can be easily divided into two subsets: issuesaffecting the construction workforce, and thoseconcerning the built environment.By comparing the findings with those contained inthe CIOB’s previous report, we assess what lessons theindustry has learnt and what it needs to grasp in orderto tackle the skills issues that exist.The ageing population has a direct effect on the workforce and available skillsets in thewider economy. In the UK, the skills shortage in Science, Technology, Engineering andMathematical (STEM) careers is well documented.Unsurprisingly, a similar situation exists inconstruction, although this typically receives lessmedia attention or direct scrutiny. As an industry,construction is heavily reliant on older workers andstruggles to attract and retain younger recruits. Now,with 19% of the construction workforce set to retirein the next 5-10 years8, the question for the industryis how to respond to the skills shortage, and preventit from deepening. This question becomes even morepoignant when we take the government’s commitmentto boost productivity into consideration.It is also vital, when drawing comparisons, to questionwhether our educational system exacerbates theprevalence of skills shortages in the wider economy.For example, media reports argue that a selectionof degree courses in the UK have become lessdemanding. Even where universities are producinggraduates with degrees in subjects sought byemployers, there is some concern that these universityleavers do not have the right level of knowledge,skill or practical experience to find degree-relatedemployment. However, this finding is common acrossall industries, and is not unique to new recruitsentering the construction industry.In fact, many schools in the UK are experiencinga shortage of fully qualified teachers. Similarly,in medicine – an industry also known for its longworking hours – there is a documented shortage inthe number of practising anaesthetists.Whilst skills shortages in the construction industryare significant, other sectors and industries are facingsimilar shortages with some, such as the engineeringprofession, seeing a far greater deficiency of both skillsand relevant expertise.8910116Even so, the skills shortage facing construction iscompounded by those entering the industry not beingsuitably qualified for the job, which can create ‘hardto-fill’ vacancies. This insight is echoed in a report bythe Construction Industry Training Board (CITB)9which notes that insufficient work experience is oneof the top reasons for skills gaps and shortages inthe economy. Similarly, research from the LondonChamber of Commerce and Industry, in conjunctionwith KPMG10, indicates that skills shortages andskills gaps often result in additional costs, delays andsometimes even lost business.Whilst there is a wealth of discussion on theprevalence of skills shortages, there is an increasinglevel of research on the under-utilisation of skills inthe workplace. This can have a detrimental impacton productivity and output. The UK Commissionfor Employment and Skills (UKCES) observesincidences of individuals being overqualified for theirposition, resulting in staff feeling demotivated. Forthese reasons, and those outlined in this section, itis vitally important to unpick the factors that createskills shortages in the first place and form a workingenvironment that suits older workers; but does notdiscourage their younger counterparts.Previous research from the CIOB has indicated thatchanges to the UK’s population pyramid will havea profound impact on the construction industry.Recommendations from the report highlighted theneed to raise awareness of the ageing population andits impact on society as well as the broader economy11.Six years on, we assess what lessons have been learnt,and what lessons can be learnt, in order to improvethe industry’s handling of the ageing population andthe skills challenges.ONS, Labour market statistics, July 2013, 17 July 2013CITB Construction Skills, Training and Skills in the Construction Sector, June 2011London Chamber of Commerce & Industry & KPMG, Skills to Build, November 2014CIOB, The impact of the ageing population on the construction industry, 20097
Skills ShortagesDespite a prolonged economic downturn marked byredundancies and instability, the UK constructionindustry has been one of the main engines of growthin recent years. Globally, the construction market isexpected to grow by approximately 70% by 202512.Previous research fromthe CIOB has indicatedthat changes to the UK’spopulation pyramid will havea profound impact on theconstruction industry.While this projected growth in the sector is welcome,it’s worth remembering that expansion in workloadsdemands an expansion in workforce capability. Indeed,employment forecasts from the CITB suggest thatconstruction will need to find almost 224,000 newrecruits between 2015 and 2019. This is to replaceworkers lost during the recession and those set to retire,as well as to meet the growing levels of output. Ongoingdebates over migration and skills policy may alsohave drastic implications for the future capabilityof the workforce.CONSTRUCTION WILLNEED TO FIND ALMOST224,000NEW RECRUITSBETWEEN 2015 AND 2019Skills ShortagesMIGRATIONWhilst the migration debate continues to gathertraction in the media, the dependence of theconstruction sector on migration and migrant labour isevident13. Yet, whilst much has been made of the abilityof migrant labour to offset skills shortages in the sector,it is clear that migrant workers alone cannot address theissue in the long-term. Put simply, the numbers neededin the sector far outweigh the number of migrantsseeking work in construction.APPRENTICESApprentices are a similar case in point since they canonly be considered part of the solution to the skillsshortage. Indeed, apprentice uptake slumped by 33% in2012/13, a fall of 14,000 over the course of two years14.In addition, industry projections will not provide thenumbers of recruits needed, despite the government’sambitious target of delivering three millionapprenticeships over the course of the next five years.Given these estimates, the best response to the skillsshortage is undoubtedly a combination of policiesand practices, including more effective employeerecruitment and retention. It is important to note thatpart of the solution will require employers to activelyrecruit older workers, and target more individuals intheir 40s and 50s. The industry will also be required tosource both migrant labour and train apprentices – as itcurrently continues to do – but in far greater numbers.OLDER WORKFORCE: BURDEN OR BENEFIT?Research which evaluates the impact of the ageingpopulation on the construction industry draws on anumber of factors to explain the exit of older workersand the challenges facing the workforce. By examiningthese factors, it may be possible to gain a greaterinsight into the most prominent issues and ensure thatconstruction is able to grasp the inherent opportunitiesby retaining older workers.Many of the challenges regarding the retention of olderworkers concern working conditions. Indeed, previousresearch has indicated that the physical and hazardousnature of construction can serve as a push factor for12 HM Treasury, Construction 2025, July 201313 CIOB, CIOB perspectives: An analysis on migration in the construction sector, March 201514 CIOB & CITB, No More Lost Generations, February 20148older workers15. Other push factors include long hours,frequent travel and the difficulty of combining workwith caring responsibilities. Additionally, factors suchas age discrimination and poor health have been citedas reasons for older workers making the decision toleave the industry.Previous studies of older workers have noted aperception that older employees possess a greateraptitude for work16 when compared with their youngercounterparts. It has also been speculated that olderworkers possess greater customer service skills andcan work well under pressure. Similarly, there is adocumented perception amongst employers that agetranslates into a greater skills set, as well as experienceand commitment.With a large percentage of the construction workforceapproaching retirement age shortly, there is a pressingneed for employers to take a multi-faceted approach tothe issue. This should include a focus on repurposingand adapting, where necessary, existing job roles to suitolder workers in order to encourage phased retirement.Additional data suggests that flexible working andfamily leave have a significant role to play in terms ofimproving the work-life balance for older workers. Ifconstruction is to avoid mass retirement these practisesmay warrant further debate and discussion.MENTORINGMentoring has been highlighted as another key areafor employers to make use of existing workers’ skillsand to train new recruits successfully. There is anopportunity for employers to utilise the skills of olderworkers by encouraging them to work with new recruitsand share their knowledge and expertise. Repurposingand changing older workers’ job roles in this way couldenable businesses to retain much of the existing skillsbase and share knowledge with the next waveof recruits.Stephen Martin, Chief Executive of construction firmClugston, participated in Channel 4’s ‘Undercover Boss’to understand the issues affecting the corporation17.Since appearing on the show, Clugston has implementeda number of changes designed to improve the workingenvironment for older members of staff. Recognisingthe expertise of older workers, Clugston implementeda mentoring programme and invested in nine traineesand three apprentices with the aim of improving skillstransfer to younger members of staff.With a large percentage ofthe construction workforceapproaching retirement ageshortly, there is a pressing needfor employers to take a multifaceted approach to the issue.CHANGING LEGISLATIONWhilst the ageing population and older workforceprovide a series of opportunities to facilitate skillstransfer, it is also important to consider existinglegislation, and recent changes to it, which have adirect influence on the workforce.As a result of the government’s decision to officiallyrepeal the Default Retirement Age (DRA) in October2011, retirement can no longer be forced upon olderworkers purely on the grounds of their age. Accordingto government announcements, the aim was toencourage longer working lives and showcase theimportant contribution that older workers make.The decision to repeal the DRA has, and will continueto have, far-ranging implications for a number ofindustries including construction. However, for olderworkers who wish to continue working, this representsa step in the right direction.Nevertheless, it is important to recognise that repealingthe DRA only affects the staff retention rate. It doesnot have a direct influence on the recruitment processor reveal anything about its inclusiveness. In otherwords, for older workers who have experiencedage discrimination in the recruitment process, thegovernment’s decision to repeal the DRA does littleto remove such barriers.15 Strategic Promotion of Ageing Research Capacity, Under the older worker in construction, January 200816 Gibb, Leaviss and Bust, Older construction workers: needs and abilities, 201317 Department for Work & Pensions, Employer case studies: Employing older workers for an effective multi-generational workforce,February 20139
CHALLENGES IN THE BUILT ENVIRONMENTMETHODOLOGYThe challenges facing the construction industry are not limited to the workplace. Infact, previous research from the CIOB has indicated that its members perceive publictransport an
global situation regarding the ageing population demographic. The world’s population is ageing rapidly and with profound results. The global share of older people (defined as aged 60 or over for the purpose of this report) increased from 9.2% in 1990 to 11.7% in 2013 1. 1 United Nations, World Population Ageing 2013, 2013
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