Public sector projects facing project management talent deficit
Big Four professional services firm EY has warned that the UK’s public sector is in danger of being hit by a talent deficit in project management. The South West and East of England are likely to face the brunt of the skills gap, as public sector bodies and infrastructure programmes vie for top employees.
Large UK public sector projects run the risk of rising costs and delays unless the issue of a regional skills gap is addressed, according to a report published by EY. As costs look likely to rise due to projects having to pay a premium for commercial, financial and project management labour, the demand for these skills significantly outstrips supply. In the mounting uncertainty surrounding Brexit, which is edging ever closer to the 2019 deadline for a conclusion of divorce negotiations between Britain and the EU, Britain looks increasingly likely to experience a significant “brain drain”.
The result of a great EU migrant exodus has already been talked about by both KPMG and Mercer studies as seeing broad array of sectors lose access to large numbers of keystone workers after a Hard Brexit, while as many as 41% of non-UK businesses responding considered an ideal Brexit to be one including “the UK joining the EEA, retaining full access to the Single Market and accepting the free movement of people.” Now, EY says that a growing lack of skilled labour will lead to delays and projects running over budget.
New figures released by the Office for National Statistics in August, meanwhile, show net migration to the UK has already fallen by a quarter to 246,000 in just over a year, as EU citizens vacate Britain ahead of Brexit. EU net migration was estimated at 127,000 in the 12 months leading to March 2017, down 51,000 on the previous year, while the figure for the rest of the world was down by 14,000 to 179,000. In response to the falling pound, the UK is also projected to lose as many as 40,000 investment banking jobs post-secession.
According to EY analysis, the East of England is subsequently facing a substantial project management skills deficit, the largest in the UK, with five times more roles available in the region than the skilled labour to fill them. Over the next few years, one of the main drivers of demand in the region is likely to be offshore wind farms. The South West follows closely behind with three times as many roles than labour to fill them, with continued demand for project management skills from the Ministry of Defence now competing with the Hinkley Point construction programme. This shortage in skilled labour comes at a time when national and local governments remain steadfastly reluctant to invest in talent development in the long-term, with current members of the Civil Service even being reported to have had to take the digital skills gap into their own hands, following a lack of backing from their employers. On the other hand, Britain’s richest region of London has the biggest project management skills surplus in the UK. London is home to just over twice as many skilled professionals as it is to roles they can fill.
While governmental institutions are turning to outsourcing to meet the strains of Brexit following almost a decade of austerity cuts, they will also likely be competing with infrastructure projects. According to the National Infrastructure and Construction Pipeline data, there will be an estimated £500 billion of projects across the UK to 2021 – including Crossrail and Hinckley Point. Given the scale of the planned investment, demand for project management talent is set to increase significantly. In addition to project management skills and experience, demand for complementary competencies, such as in commercial and finance are also likely to rise.
Joe Stringer, Partner for EY Government and Public Sector, said, “We’ve never seen such an increase in demand for project management, commercial and financial skills across infrastructure and government at the same time. Combined with the geographic nature of infrastructure programmes, decision makers in most regions can’t assume the skills are there and need to think creatively and embrace better ways of working to ensure that they can deliver projects in a way that provides value for money.”
Avoiding the ‘Talent Crunch’
As departments and programmes seem on the verge of outright battle for top talent, EY has set out several recommendations to tackle this impending ‘talent crunch’.
The central starting point of this is that resources should be shared across departments and programmes. As projects develop, there is predicted to be a growing case for departments and programme managers to track talent requirements needed at certain stages of the project timelines. EY suggests these should be shared with other teams as early as possible so that talent can be allocated across projects at the appropriate time, particularly where resources are limited, to avoid creating false competition for the same talent and further inflating hiring fees.
Flexibility on skill sets is also essential to further avoid this. Project leaders are advised to be more flexible when considering the suitability of specific skill sets for certain roles. This will help reduce the barriers to entry from similar professional competencies. For example, the skills offered by quantity surveyors may, in some cases, meet requirements for procurement programmes with the right training in the specifics of government procurement. By building flexibility into the requirements of a project, leaders will be able to respond more quickly and effectively to resource challenges.
Changes in the UK labour market may, meanwhile, provide an opportunity to implement new recruitment approaches and move away from traditional employment contracts. EY believe that new approaches to finding talent could provide better value for money. With an independent scene growing in professional services, which is increasingly bucking the trends of the broader gig economy, some employees are weighing up their changing needs over time and are foregoing long-term or fixed-term employment contracts in favour of shorter and more flexible agreements. Playing into this with talent acquisition processes could be a key way of better managing resources for a range of projects in the short term.
Changes in the UK labour market may meanwhile provide an opportunity to implement new recruitment approaches and move away from traditional employment contracts. EY believe new approaches to finding talent could provide better value for money. With an independent scene growing in professional services, which is increasingly bucking the trends of the broader gig economy, some employees are weighing up their changing needs over time and are foregoing long-term or fixed-term employment contracts in favour of shorter and more flexible agreements. Playing into this with talent acquisition processes could be a key way of better managing resources for a range of projects in the short term.
Leveraging technology is also an important step toward efficiency. With increasingly cost-effective technology becoming readily available, while AI and automated solutions become ever more advanced, many industries are utilising innovative new techniques to best benefit from digital disruption. In this case, with increased use of remote working, mobile technology and collaboration tools, the location of employees should become less of a factor. Project leaders should be promoting remote working wherever feasible, and enable talent to engage with more than one project simultaneously or from another part of the country.
Managers will also need to collaborate with the private sector and professional bodies in order to work successfully. Changes in commercial resourcing cannot work in isolation. Instead, they need to be applied collaboratively across public and private sector projects. Researchers at EY state that professional bodies including the Chartered Institute of Procurement & Supply (CIPS), trade unions, recruitment consultancies and advisors all have an important role to play in the process as very few entities have the visibility across multiple sectors demanding the same skills. These institutions, if treated as allies rather than competitors and combatants, can help facilitate collaboration, provide platforms to share best practice, be sources of innovation, share industry-specific knowledge, and help attract and manage the flow of talent so that the right people are matched to the skill sets required for specific projects.
Finally, EY state that it is essential to recognise the importance of taking pre-emptive action. Outsourcing and procurement programmes are set to increase in volume and complexity over the next decade, particularly in the public sector where there is a clear shift from large one-stop-shop contracts to government taking on more responsibility to integrate outcomes across a wider number of suppliers. Tracking the complexity of projects in the pipeline is important in order to ensure that you recruit and retain the right people.
Public Sector Pay
With regard to the potential for major inflation in fees relating to project management, Joe Stringer concluded, “Waiting until the talent shortage is staring us in the face next week shouldn’t be an option. It will take time to implement the necessary changes so it is vital to act now to mitigate the potential impact.”
However, while the talent shortage in project management threatens to clip the wings of the government’s major infrastructure investment strategy, public sector work in general sees wages continue to stagnate at the other end of the scale. As the UK government has come under mounting pressure for its cumulative spend on external consulting and professional services talent, Theresa May’s Premiership has also faced growing ire over the matter of public sector pay, as many of the external contracts end up simply patching holes left by state lay-offs, which were initially committed in the name of spending reductions.
Now, the government is on the brink of facing a winter of discontent, after public sector pay once again came to the fore of public scrutiny. The embattled government, which finds its hand drastically weakened following a humbling general election in which the Conservatives lost their Parliamentary majority, has faced months of criticism having steadfastly refused to lift a pay cap on public sector workers. The position came in for cross-party condemnation following efforts by the fire service, the NHS and the police following a summer of tragedies, including the Grenfell Tower fire, and terror attacks in London and Manchester, which each highlighted the importance of public sector work.
However, following a decision in mid-September to lift the 1% annual cap on increases, the government was met with derision from Labour opposition leaders, and renewed threats of strikes by trade unions, as the above 1% pay rises only applied to for police and prison officers in the last of the 2017-18. Despite a wider commitment to “flexibility” for all public sector workers from next year, the government has been accused of divide and rule tactics, while unions representing prison officers and police dismissed their pay rises as insufficient, with the former threatening industrial action.
