2018 was one of the more challenging years in recent memory for SME Building and Subcontracting sector. Since the recession, most businesses have experienced a significant increase year-on-year when it comes to workload, turnover, staffing levels and profitability. This year many have noted that demand and business growth has been limited in Scotland. Project awards have been more scarce, particularly for commercial projects, whilst some retail, banking and public sector frameworks have brought much-needed revenue. Many businesses have consolidated this year as there have been fewer opportunities to win work and even tighter margins.
On a positive note, there have been some pockets of growth and activity. Opportunities arose for many businesses based in Edinburgh, Fife and Perthshire. 50% of the placements made by our permanent recruitment team were in these locations.
Like 2017, Glasgow and the West have been quieter in comparison to previous years, but have steadied and continued to offer project wins and employment opportunities. The businesses that have been reporting success this year have been those who have diversified into new areas of opportunity. Whether that be moving into other sectors like building affordable homes, growing regional businesses in England, or through acquisitions. We’ve also seen a surge of growth from new small businesses which is always encouraging as well.
This year, SME contractors registered 11% less staffing requirements (379 total) than in the previous year. Only 54% of these requirements resulted in a new employee being recruited for the role (by any means, not through ourselves). This is 5% less than 2017, which saw 59% of vacancies filled by new members of staff.
The percentage of new hires that were freelance staff stayed consistent at 61-62%. Still, there was a whopping drop of 29% less permanent hires in 2018 compared to 2017 for the SME construction market in Scotland.
Workloads have slowed and/or spread out in 2018, allowing contractors to better cope without having to recruit more operational staff. We have seen some redundancies of operational staff as contractors have attempted to cut costs and streamline their delivery models.
While it has been a tough year for operational staff in general, commercial staff remain in high demand. 25% of vacancies registered and 21% of vacancies filled in 2018 were Quantity Surveyors and Estimators. This demand is reflected in a rise in salary levels for commercial staff across most sectors in the industry. This seems to be a reaction to more competition at tender stage and a need to protect profits on existing work to improve cash flow. For those keen to better understand the changes in salary levels this year, we will be publishing our annual salary review in early 2019.
What we’ve found quite reassuring is that stats once again confirm the tenacity and viability of SME businesses in the Scottish Market. SME builders have registered 154% more staffing requirements than Large National Main Contractors! Well done to all on what was a challenging, but successful year.
Upon reflection, 2018 was a positive year for our sector, despite the challenges many have experienced. Contract Scotland has managed to place 143 construction professionals (technical staff & management) in either permanent or temporary positions with SME construction companies. It's expected that 2019 will be another challenging year where employment opportunity levels will likely remain the same as we continue to face challenges maintaining workloads and retaining staff against the competitive salaries on offer from large corporate businesses.
Candidate availability across operational positions, such site management and project management, is particularly strong right now. If you are looking to grow your team in 2019, please get in touch with us on 01786 446651.