Tough answers to difficult questions

Industry News: 12 April 2017

1. What will the UK electrical contracting industry look like in 2020?
All UK industry sectors should be on a pathway of continuous improvement. We should be able to look back and see evidence of improvement in our value proposition when compared to other sectors. Sustained and growing profitability, enrichment of business and workers, are markers to measure any achievement. However, the industry’s recent history has been blighted with many set-backs, including the lack of standardisation around who should be doing electrical installation work. The significant majority of the industry appears to share common concerns around the future availability and retention of suitably skilled workers. Improving the industry’s value proposition is being hindered by an emerging race to the bottom culture.

The Domestic form of Contract determines that SME Electrical Contractors, are usually one placed removed from the client by the interposition of Main Contractors. This condition has weakened the engagement and appreciation of the project client towards the Electrical Contractor’s principal asset. Go to people, and skilled electrical workers are obscured from the Client’s line of sight. And as we all know “out of sight means out of mind.” Acceptance of this condition has been normalised. Client focus on corporate credentials, PQQ and ITT documents means that the value of electrical workers will continue to be undervalued and undersold as we go forward. So it sounds like more of the same and points to a 2020 rendezvous with a familiar, unimproved industry.

2. Will there be less high-quality new entrants attracted to our industry?
The range of options for the best of the annual school leaving population has significantly increased. Competition from Higher and Further Education courses, as well as other existing and emerging industry sectors, place significant challenges before employers and training organisations in our sector as they seek to replenish the workforce. Attracting and retaining new entrants from the top end of the GCSE spectrum is essential. New materials, technology and IT are set to shape the future development of the sector.

Perception of an industry plays a part in the decision making process of those who are seeking a chosen career. The electrical installation sector appears to have lost some of its appeal as being one of the top vocational trades. Poor perception and increased efforts from other industry sectors to brand and professionalise their offering have weakened the attraction of this industry for high-grade GSCE and A level students. We need to recover the former standing and perception of this trade with parents, career advisors and possible new entrants. Future performance and productivity of the industry are strongly tied to urgent requirements to reduce the climbing age profile and increase its collective intellectual capacity.

3. Will there be an increase in unregulated pay rates?
Local agreements, driven by the forces of recession, opened the industry up to a broad spectrum of bespoke pay rates and hours of work. Hourly pay rates appear to range from £10 – £28 p/hr. Variants of the nationally promulgated pay rates are probably more prevalent than the actual published rates.

Tiered subletting of work packages and use of labour only sub-contractors mask the extent of the pay rate issue. Excessive overtime at the flat rate for apprentices and mature workers appears to be normalising throughout the industry. Some efforts on large projects to temporarily standardise minimum hourly pay rates have been successful. These efforts are welcome and should be commended. However, it would seem that the majority of the industry will be obliged to deviate from national base rates for some time to come.