The debate around the issue of productivity has been going on in the Scottish construction sector for a very long time – certainly since I first joined the industry way back in 1982.
It’s always been a lively and complex debate, but one I feel hasn’t really moved on that much in the past 30 years.
We need to listen carefully to what industry has to say
A recent study by the Confederation of British Industry (CBI) found that average output in Scotland is 25 per cent lower than in London. It goes without saying that if Scotland continues to lag so far behind on the productivity front, it will make it difficult to attract inward investment.
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The CBI is therefore calling on the Scottish Government to make increasing the efficiency of business its number one priority in the forthcoming budget, potentially adding billions to the economy. At Construction Scotland we’ve already put the productivity issue at the very top of our agenda through our Profit Through Productivity programme, which was launched last September.
The theory is simple – the more productive we are, the more profitable we become. In practice, things are a bit different. I was recently asked to judge an annual award, where eight medium-sized contractors turned up, and I was astounded to find that only one had profit as a key indicator of how well the business was doing.
I’ve seen so many well-intentioned reports over the years, and we don’t need another. We need to listen carefully to what industry has to say, not what the commentators say we should be doing. We can’t look back and be judged on past performance – we need to be inspired by good ideas and clever thinking.
As part of our Construction Productivity Improvement Action Plan, we consulted with a range of industry stakeholders. We found that many in the industry believe improving productivity comes with a hefty price tag. But it does not always involve significant cost; in many cases it is just about adopting different practices or processes. People also told us we need a simple, strong and clear message, illustrated by good examples of success, which can help to engage the wider sector.
One area where I personally believe real improvements can be made is in the approach to procurement. I believe procurement strategies must support collaboration, and give all the stakeholders adequate time to plan to achieve that.
The CBI’s recent research – while not construction industry-specific – echoes what our industry is constantly telling us about the lack of vital skills. For example, infrastructure is a key driver of productivity, but a recent survey found 86 per cent of infrastructure providers are concerned that skills shortages will hamper the UK’s ability to deliver its current infrastructure pipeline.
We need to create a more positive perception of the construction industry and widen the talent pool to ensure appropriate levels of supply in a competitive labour market. Companies can help by engaging with schools to support careers services and showing there is a broad range of exciting career opportunities in construction.
Finally, and probably most importantly, companies told us that improving productivity must be an industry-led mission. Strong leadership is required – this is too big and important an issue for any single organisation to address, and therefore Construction Scotland’s role is critical. There is never a right time to drive improvements across our industry, but with our action plan in place, we now have the right focus and organisation.
The Profit through Productivity activity programme is a direct and current response to the productivity challenges identified through our extensive consultation across the industry, commissioned by Scottish Enterprise on behalf of Construction Scotland.
In 2017, we will continue to address productivity issues geared to the requirements of the construction industry via a series of events.
• Ken Gillespie is a member of the Construction Scotland industry leadership group