An examination of the relationship between skills development and productivity in the construction industry

In recent years, the UK government skills policy has emphasised the role of workforce skills development as a key driver of economic success and improving productivity across all sectors of the economy. The importance of skills (as a vehicle for enhancing productivity performance) is highlighted within numerous government reports, such as Skills White Papers (2003 and 2005), in addition to the Leitch Review of Skills (2006) which coincided with the outset of this research. Thus, the aim of this research was to examine the relationship between skills development and productivity in the construction industry in order to assess the assumptions of government skills policy in the context of the sector. A multi-method approach was adopted in this research. This involved the analysis of: official construction statistics, levy/grant and financial accounts data of construction companies, in addition to a telephone survey. The main findings of the research are published in five peer reviewed academic papers, demonstrating the tenuous nature of the relationship between skills development and productivity performance, particularly when considering the heterogeneous nature of the construction industry. Government claims about the mono-causal relationship between skills and productivity should be treated with caution. A simple boost in qualification levels or participation rates of training is unlikely to lead to productivity improvements in the construction sector.However, skills development and training activities needs to be targeted and focused if the desired outcome of enhancing productivity performance is to be achieved. Construction companies needs to be proactive in addressing the skills and training needs of their business through drawing on the various support available through CITBConstructionSkills training grants or participating in appropriate skills/training initiatives, such as apprenticeship schemes. The provision of 'productivity-based' training grants should be considered by CITB-CS in order to prompt construction companies to consider training as a plausible means for enhancing their productivity performance. Finally, the recommendations presented in this thesis and areas for further research sets out the potential way forward in terms of advancing knowledge in this area

An exploration of the relationship between training grants and the profitability of UK construction companies

A levy/grant system exists in the UK construction industry to provide financial support for companies undertaking training activities. With the current UK government skills policy, there is an emphasis on ensuring that training support provided to employers is aimed at enhancing companies’ profitability. This paper explores the profitability of construction companies in relation to training grants. Inferential and descriptive statistics were used to analyze a uniquely combined dataset over the period 2002–2005. The research revealed that there is not a simple linear relationship between training grants and profitability. However, large and more profitable companies claimed more training grants in relation to the following areas of training: management, qualifying their existing workforce (certifying the skills of their existing workforce) and developing training plans. The authors argue that training grants should be targeted and focused towards specific areas of training if profitability gains are to be achievable. Future research should consider training grant utilization within the context of construction companies in order to ascertain the real contribution of training grants to their profitability