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Construction Industry Challenges and Trends in 2021


In what has proven to be a period of unprecedented challenges and disruptions, 2020 was an eye-opening experience for many industries. With the arrival of the new year, the focus for many is now on what lessons can be learned from the past 12 months and how best to safeguard themselves and their businesses against the challenges ahead.

As one of the first sectors affected by the coronavirus restrictions brought in earlier last year, construction firms and the industry has proven itself to be extremely adaptable and willing to implement changes to the workplace swiftly and decisively. The result was that many construction projects were able to reopen in May of last year – well ahead of the curve of many other industries.

That same adaptable nature looks to be tested once more as we head further into 2021. With the UK’s exit from the European Union, the construction sector looks to be one of the industries most greatly affected by the raft of changes necessitated by the departure from the EU trading bloc. It is also a time of cautious optimism, with many looking to leave the hardships of 2020 behind and to focus instead on the opportunities being presented to us by the new year.

The purpose of this article is to examine challenges in the construction industry, and the emerging trends as a result of this. We will look back at the changes necessitated by the COVID-19 pandemic. We’ll also be looking ahead to the future, examining some of the predictions regarding the impact of the ongoing global health crisis as well as the impact of changes to transport and logistics and free movement from the EU.

Finally, we will consider how the industry has already begun to pivot to meet these changes and also, how regulation changes and technological developments may become an asset to organisations.


COVID-19 and the construction industry

Although we are now in 2021, it cannot be overstated that we are still facing a global health crisis in the form of the COVID-19 pandemic. The ongoing vaccination rollout across the country is offering a light at the end of the tunnel for many, but the current impact to the UK’s workforce is still significant and one that employers can ill afford to disregard.

As mentioned, the construction industry was one of the fastest in adapting their workplace practices to ensure the safest working environment possible for their employees. Many employers in the industry are satisfied their workplaces and processes are fully compliant. However, the ongoing situation offers some challenges unique to the construction industry.

The ageing workforce

The construction sector has been struggling for some time with an increasingly aged workforce. The industry has seen the greatest increase in workers of over 60 than any other age group in any other sector. This is of particular concern as over 60’s have been identified as one of the groups most at risk from covid-19, meaning the construction sector has one of the largest percentages of at-risk workforces of any industry.

Logistical constraints

Many business owners have admitted to having to widen their procurement net since the crisis began. As shored up as one businesses’ processes may be, this is still a reminder that unfortunately, many companies have been unable to survive the past 12 months. For construction firms, this may mean that previously relied upon merchants may have ceased trading, necessitating the search for suppliers elsewhere. This could lead to an increase in project costing and delays, should demand outstrip supply in certain areas.

Many organisations have done what they can to minimise the damage posed to them by the crisis. Implementation of safety protocols and following government guidelines such as maintaining security scanners and access control points. Even as medical developments continue to show us a way out of the crisis, people are still aware of the need to not relax control measures at this point, all the better to ensure the safety of themselves and their workforce.

Wellbeing and safeguarding

Moving into the post-pandemic world, all sectors are looking to deal with the challenge of re-onboarding their workforce as well as restructuring the working environment to suit the “new normal.” Although the construction industry is seeing a less fundamental shift in this regard, given that on-site projects won’t have faced the same level of restrictions as office-based roles- HR teams and business leaders in the industry will still be dealing with many of the same issues as their counterparts in other sectors.

As businesses look to move back to a sense of normality, one of the greater challenges facing businesses is that of employee wellbeing. The pandemic has highlighted disparities in businesses and their ability to accommodate for varying degrees of mental and physical health requirements. As we move into a post-pandemic world, employee’s expectations will have shifted to have a greater level of appreciation of issues of workplace compliance and safety. It is important that the industry is mindful of the concerns of their employees as projects and sites inevitably begin to ramp up in productivity.

Ensuring that business owners and site managers are keeping open, frequent dialogues with employees about their mental health and taking onboard feedback regarding the various causes of workplace strain-both physically and mentally- can help ensure that workforces feel secure and productive.


Impact of Brexit on the construction industry

It’s no surprise that construction is entwined with transport and logistics. The efficient and regular supply of materials acts as the lifeblood of many organisations. With the exit of the UK from the EU, legislation surrounding the procurement of goods is set to change dramatically. The new year has already seen some challenges in the construction industry, including a logjam of goods vehicles at the border and it is the concern of some that until new legislation is bedded in, we may continue to see disruptions.

The implications for businesses within the industry would be potential increases in project costs, if demand for materials outstrips available supply, as well as leading to spiraling timeframes for project completion.

Despite this ongoing uncertainty, projections for the industry remain positive. The Office for National Statistics reported that in the three months leading up to November 2020, construction output saw a 12.4% increase compared to the 3 months previous. There has also been a similar increase in demand for both new build work (11.9%) and property maintenance (13.2%).

UK skills shortage

As mentioned previously, the construction sector has seen the largest increase of any industry, in workers over 60 years old. This, coupled with a steady decline in newer members of the workforce under 30, means there are some concerns about the future of the UK sector.

As well as the previously mentioned health-based impacts of an ageing workforce, the struggle within the industry to appeal to younger people could potentially see the loss of valuable skill sets. With a lack of new blood entering the workforce, there are fears that the industry will be unable to benefit from the “teachable moments” the older members of the workforce could provide – imparting their knowledge to the next generation.

Previously, the UK has supplemented this need for younger employees by relying on an influx of EU nationals- London’s construction workforce currently consists of 37% EU nationals. Now with the UK’s exit from the EU and the changes to free movement that come with it, there are concerns that this previously reliable source of workers will no longer be viable.

Furthermore, the government’s proposed points-based immigration system seems unlikely to qualify workers within the industry.

It’s not all doom and gloom. Indications within the industry point towards an uptake in several new trends, many of which seem suited towards attracting a younger workforce. The upswing in the use of 3d printing technology within the industry as well as the increasing trend towards pre-fabricated, modular housing, is indicative of the sector pivoting to a more technology-driven, environmentally friendly way of working. This could be an indication that within the industry, the focus is on innovation and developing entirely new methods of working, which could go some way towards lessening the impact of an ageing workforce, as the sector becomes less reliant on preserving that knowledge.


An eye towards the future

In examining construction industry trends, we can see a sector with a great cause to be hopeful for the future. After a turbulent 12 months, and yet to be fully realised implications of Brexit, a sense of trepidation is understandable. However, in looking at the industry and their willingness to adapt to new processes and recognise new trends, we see a sector extremely well suited to tackle an uncertain future.

The focus for 2021 for many businesses will be on looking towards the horizon. Where 2020 was about pure survival for many industries, all indications for construction are pointing towards a period of growth. The challenge for these businesses is ensuring that they are ready to meet this future head-on.

Construction technology

Technological advances, as well as existing government legislation, will be a boon to companies looking to make the most of the next 12 months. Whilst we’re still in the midst of the pandemic, government guidelines still heavily encourage the use of access control systems, such as biometric scanners, in order to ensure steady, controlled movements of employees throughout the workplace.

HR systems will become one of the greatest assets to the construction sector in the upcoming years. Changes to regulations in the wake of Brexit, mean that a company’s ability to be transparent in its reporting will become paramount in the upcoming years.

With changes to the logistics and supply chain an inevitability, it will also be critical for businesses to have effective project costing in place in order to lessen any negative impact. Training modules will also be a boon in helping ensure an even distribution of key skill sets throughout the business.

Hopefully, this article has been an informative look at the construction industry and the challenges and trends that await as we move further into 2021. If any of these challenges mentioned sound familiar to you and you would like to discuss further ways to increase productivity levels and make the most of the future at your business, get in touch to discuss how our workforce management solutions can help you.

Mitrefinch is a leading global provider of integrated Time & Attendance, Payroll, HR and Access Control solutions. The company has designed user-friendly and cutting-edge products that help organisations unleash their true potential. Experience workforce data like never before and increase productivity and profitability with our powerful workforce management solutions.

Experts in Workforce Management since 1979 and trusted by over 7,500 organisations worldwide.

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