The UK construction sector is on the cusp of a significant expansion. Driven by the government’s ambitious target to build 1.5 million homes by 2029. The aim is to address the nation’s housing shortage and boost economic growth. However, a severe shortage of skilled labour threatens to slow progress and compromise the quality and safety of construction projects.

Martin Parker, (above) Head of Construction at Markel in the UK discusses the current state of the construction labour market and highlights the risks firms run if they are forced to user under-skilled staff.

Growing demand amidst a shrinking workforce

Labour’s housing initiative includes reinstating mandatory local housing targets and streamlining planning processes and looks likely to accelerate construction activities across the country. However, the construction industry faces a potential shortfall in labour to fulfil this additional activity. According to the Construction Industry Training Board (CITB), almost 225,000 extra workers will be required to meet UK construction demand by 2027. This shortage is exacerbated by an ageing workforce, with the Construction Products Association predicting that 500,000 workers—approximately 25% of the current workforce—will retire over the next 10 to 15 years.

To support construction firms, the government has launched a number of initiatives. These include streamlined planning decisions for small-scale developments, and a boost to the apprenticeship scheme, that will see a planned 5,300 new builders come into the market through the establishment of 32 Homebuilding Skills Hubs offering fast-track construction courses lasting 12 to 18 months.

These initiatives, whilst encouraging for the sector, are unlikely to address the full extent of the potential labour shortfall, which is also being hit by the challenges of bringing in foreign skilled builders.

Risks of employing under-skilled labour

In response to labour shortages, the pressure to hire unskilled workers or inexperienced builders to fill resource gaps could be significant. However, taking this route could carry significant risks for building firms.

With construction already one of the most hazardous industries in the UK, employing under-skilled workers might well increase the potential of accidents and injuries on-site. The HSE reports that in 2024, there were 51 fatal injuries to workers, which compares to the five-year average of 42 fatalities and 4,050 non-fatal injuries. The sector will not want to see these numbers increase significantly as a result of taking on unqualified staff to fill resource gaps in the rush to build.

Building quality is another area of potential concern. There is pressure to build, and build quickly. If the ratio of supervisors to less-experienced builders increases the risk of having sufficient time for thorough on-the-job quality control will rise too.

Inexperienced workers will lack the knowledge of their longer-serving colleagues, increasing the likelihood that important elements of a build are missed or not completed to the required standard, potentially leading to costly remedial work or safety issues down the line.

The need to supervise inexperienced workers through on-the-job training and quality control checking, will add further pressure to teams. Should this cause inefficiencies, projects could overrun potentially creating financial losses.

Losses could be exacerbated if time pressures, coupled with an imbalance of experienced to inexperienced workers, leads to regulatory non-compliance through a failure to meet building standards for works. Consequential legal penalties and reputational damage would be another headache for firms already under pressure.

How can the insurance industry support the construction sector?

The insurance sector’s role in supporting construction firms is vital. Insurers have the responsibility to understand the specific risks the sector faces and create products and services that meet those needs. Brokers are perfectly placed to take their clients through the types of cover that is available and why it may be important for them.

Covers such as EL and PL offer standardised protections. Others such as contract works insurance—which provides cover for ongoing construction projects against unforeseen events—are more specialist in nature. Professional indemnity insurance also provides important protection, particularly in the context of this article’s subject matter.

Added-value services offered by insurers are another consideration. These often include access to legal and HR support, which can help firms stay on the right side of the regulations while receiving professional support if an incident does occur.

The construction industry is going through a period of flux with a tremendous opportunity for builders potentially impeded by the challenges of completing projects on time, without incident and to a sufficient standard. The insurance sector can support during these times through specialist covers and additional services that make a tangible difference to building firms looking to deliver for customers.