Brexit fears prompt staffing re-think among small construction firms

Construction companies preparing for a no-deal Brexit-related downturn are risking their reputations by taking on more sub-contractors and hiring fewer full-time staff, according to the Federation of Master Builders (FMB).

The FMB said a fifth (21%) of those SMEs polled for its latest quarterly State of Trade survey reported having a smaller workforce, the first decrease in employment levels among small construction firms for more than five years.

But while the re-balancing of a workforce in favour of sub-contractors has been favoured recently, the FMB warned it “could lead to reputation-damaging mistakes”.

“If a downturn is on the horizon, reputation is everything and construction employers can scrutinise the quality of their workforce far more easily when they’re on the books,” it said.

The FMB’s latest trade survey showed that while workloads for SMEs across the industry rose slightly in the three months to the end of June versus the previous three months, the percentage of firms predicting increased activity in the coming three months fell from 41% to 37%.

And the skills shortage remains an issue, the FMB said, with 60% of SMEs struggling to find bricklayers and more than half (54%) unable to hire carpenters and joiners, although this is a slightly better position than in the first quarter when the responses were 64% and 59% respectively.

Brian Berry, the FMB’s chief executive, said years of Brexit uncertainty had caused construction firm bosses to look at their staffing structures.

“To ensure their firms are ready for any economic shock waves later this year employers are reducing their number of direct employees and relying more on sub-contractors who are easier to shed if work dries up.

“The construction industry has always used a significant proportion of subbies but the fact that direct employment is decreasing, points to Brexit nerves among construction bosses,” Berry added.