SME Building Contractors - 2015 Overview

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SME Building Contractors - 2015 Overview

Kelly Mulholland

The SME Building sector has seen massive recovery over the last 12 months with the majority of contractors reporting a significant rise in tender opportunities and project awards. There have also been a number of frameworks awarded to SME Builders within retail, healthcare, leisure and commercial sectors as companies continue to put finance into refurbishing existing premises.

The amount of project opportunities is not consolidated to a singular geographical area and there appears to be steady growth throughout the North, East and West regions in Scotland. Slower areas of recovery appear to be the Borders and Highlands.

Within the SME market there are significant pressures on employers. Whilst they see opportunities grow back to the level they once achieved, it is often with low margins, onerous contract conditions and inconsistent workloads. Struggles for the SME market are the increase in projects with client’s expectations of margins remaining stagnant. With the increasing cost of materials and labour this narrows profitability of projects.

The issue small businesses face when coming to recruit is that may not be able to compete with larger organisations. Throughout the recession we saw larger companies dipping into the SME workload – the knock on effect being candidates became attractive to all types of contractor. With the availability of candidates diminishing, construction companies, regardless of their size, are now competing for the same talent, whereas in the past a candidate labelled as a major project builder or a smaller refurbishment or fit out specialist. The national contractors tend to have the ability to pay higher salaries (around 15%) on base for the majority of disciplines. Those disciplines in higher demand will often see national contractors paying significantly higher salaries than their regional counterparts, this is especially apparent with Estimators, Quantity Surveyors, Planners and Project Managers.

 Candidates who have been in the same position for some time owing to market conditions are now starting to see an increase in opportunities and financially it can be rewarding for them to make a move. It is a struggle for some small -regional contractors to retain their existing staff and they may find that candidates are moving to larger organisations with pay increments which they just cannot mach. We have noted a significant increase in clients looking for market intelligence on salaries and how to manage staff retention in light of these market improvements, as staff turnover becomes an issue.

 The Building SME sector saw a steady number of permanent vacancies registered in 2015, however the number of total vacancies registered within this sector was down 11% compared to 2014. What’s more encouraging is that there was a staggering 51% increase in permanent placements from 2014, showing greater confidence in future workload, and the indication that vacancies being registered are a pressing requirement for businesses. Furthermore the building SME sector has seen the highest volume of permanent placements throughout all sectors of the industry which is an obvious shift from recent years. The Building SME sector has seen the most promising signs of recovery and opportunity which is encouraging for the industry.

 Job vacancies are spread across most disciplines but with the majority of opportunities seen at mid management level or below. Project Surveyors and Site Managers are in most demand at this time along with Estimators, which has been a discipline difficult to source for a significant period. It’s also interesting to see companies looking to develop their pre-construction teams and recent vacancies registered have included, Pre-Construction Project Managers and Proposals Coordinators.

If you are an employer in the SME Sector looking for help or advice, or indeed a candidate interested in pursuing a career within a small - medium sized building contractors, please get in contact with me.  

I look forward to a positive 2016, and the festivities that comes over the next few weeks. Merry Christmas everyone!

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