Thoughts on the UK electrical contracting industry

8 January 2019

2019 Part 1

Broad anecdotal evidence from industry points to a decline in the standard of work and practice in the UK electrical contracting sector. Exceptions do exist. Some enterprises enjoy repeat business based on their reputation for service and value for money.  Nevertheless, only a few will argue the fact that the trend in quality and skills remains downward.

An aging workforce, low-level uptake of apprenticeship training and a mounting dependence on the uncertainty of foreign and semi-skilled workers, compounds the short, medium and long-term difficulties. The impact of the UK’s demographic dilemma upon productivity continues to be a threatening reality in the sector as well as the broader construction industry.

Negative consequences!

Short form electrical training courses intended for the domestic sector have served to undermine traditional apprenticeship training and provided backdoor access into the commercial and industrial marketplace. The transition of “short form” trained and semiskilled workers into the commercial and industrial electrical sector, provides a temporary but unsatisfactory labour fix in areas where market demand is high.

However, this particular development has many negative consequences. For example, the industry becomes less attractive to high-quality school leavers as the perception of a career in the trade has diminished when compared to other existing and emerging sectors. Pay rates, terms and conditions of employment and the overall identity of the electrician have been set back because the industry has failed to adequately protect its most important brand credential, i.e., trust!

Loss of trust, borne out of poor historical control measures, as well as ineffective industrial and political strategy has weakened consumer confidence in the identity and value proposition of the sector. As a result, the trade has slipped from the top rungs of the construction trade ladder.

What control measures?

Established control measures for those individuals who carry out electrical work on behalf of the UK electrical industry have progressively declined during the period. The absence of specific legislation, resistance to industry lobbyists by successive governments and apathy within the trade has facilitated the rise and dependency on unregulated electrical workers.

In the contemporary industry, the majority of commercial and industrial electrical workers operate outside of a central trade organisation. This means that Clients of the industry can be exposed to immediate risk and latent risk factors as many of these workers are unqualified, underqualified or self- designate as being a qualified electrician.

New house rules required

The government requires industry to keep its own house in order. However, the supply side hasn’t quite managed to meet this requirement. We have failed to maintain an adequate guard on the gate and unfortunately developed a tolerance for lower cost, semi-skilled labour on which there is a short-term gain but ultimately a diminishing return. The present adverse outcomes, i.e., decline in competency, standards and productivity have been shaped by a legacy of changes in the economy, demographics and procurement policy.

Public procurement authorities remain unresponsive towards monitoring the electrical competency of individuals working on capital projects, preferring to rely on technical and professional desktop assessments of the employer.

Private clients are also often unaware that the majority of electrical workers working on their project, may not be fully qualified electricians. The practice of using one or two go-to people supplemented with labour only gangs of unregulated electrical workers or extended third party sub-contracting, is becoming the norm in much of mainstream electrical contracting.

Tender dynamics

The UK electrical contracting industry is by no means the worst affected industrial sector. Other existing and emerging sectors in the construction industry share similar problems. Outstanding examples of successful traditional family and corporately owned electrical contractors do exist throughout the country. However, many of these enterprises are often limited to a repeat business model within an existing customer base. Most contractors operating under this model are perhaps unwilling or unable to contend with greater field of bidders who rely on unregulated and extended labour supply chains to win competitive tenders.

Client preference and subsequent sponsorship of competitive tendering that excludes “a condition of tender” requirement covering individual worker competency may produce lower contract prices. However, this procurement strategy has inadvertently undermined and degraded the national training and skills imperative. Only a few discerning and responsible procurement organisations in the private sector, factor in the electrical accreditation of individual workers beyond those of a basic health and safety passport.

Weakening industry resilience

Many associations, bodies, authorities, and unions work hard to improve quality and raise standards in the industry. However, commercial objectives, market segmentation and feuding politics within and around the industry often confuse Clients and weary stakeholders.

Cynicism and scepticism borne out of frustration and conviction on the negative state of the industry, are being increasingly vented by conscientious stakeholders to provoke the imperative to change course.

Too many unqualified, underqualified and self-designated electrical workers have entered the industry supply chain. Short form training courses, client procurement habits and lack of financial reward within trades have systematically weakened the industry. Low margins, poor cash flow and workforce instability dissuades many employers from investment into worker and apprenticeship training.

The outlook for productivity and service levels in the UK electrical contracting industry is likely to be more of the same in 2019. Decline in the sectors skill base and weakening industry resilience is occurring imperceptibly in some areas. In other areas, the problems of skilled and affordable labour are becoming acute.

Fewer high quality, new entrants are being attracted into the industry and a less productive aging workforce is steadily retiring. The emerging skills gap in the industry’s training pipeline is likely to mean that Clients may face difficulties in sourcing and appointing the next generation of high quality well-resourced electrical contractors.

Why not share your thoughts, opinions and views on the current and predicted state of the industry. More thoughts from SparkSafe to follow in Part 2