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Look to contractors for good business sense – and jobs

NCE’s annual Contractors File, published alongside NCE this week, confirms what everyone knows – it has been another tough, tough year for civil engineering contractors. Many firms have seen civils turnover and profits fall, with margins thrown on the bonfire in a desperate quest to survive.

Yet in stark contrast to the consultancy sector, engineers’ jobs appear not to have gone up in flames; extraordinarily, it’s the reverse.

While civils consultants have spent much of last two years slashing jobs – analysis of this year’s Consultants File submissions showed 10% of the total workforce was cut in 2010, following on from a 7.4% cull in 2009 – civils contractors have actually spent 2010/11 recruiting engineers.

The 78 firms listed in this year’s File earned £10.1bn from civil engineering contracting in 2010, £1.3bn less than the same 78 firms managed a year previously.

Yet that same 78 firms employed 12,784 engineers as of June 2011, 1,436 or 13% more than they did in June 2010. Of the 78, 53 have increased the number of engineers they employ. Just 25 have cut numbers.

It’s a remarkably different approach to running a business. Consultants appear to see staff as expendable resources to be brought in or got rid of as and when the market dictates; contractors see them as assets on which to build a future business.

Costain, highly commended in the major firm category for this year’s NCE/CECA Contractor of the Year Awards, typifies this approach. During the year over 10% of its staff have been promoted; through the broadening of Costain’s capabilities a greater range of career opportunities have been made available to employees with over 80% of new job opportunities being filled internally; the business has attracted and recruited over 250 highly competent personnel, including the recruitment of graduates, young offenders, apprentices, and the long-term unemployed. In addition as the business has developed Costain has also improved the skills and development of over 1,900 members of staff within the team.

Shortlisted firm Kier has had a good year and its success down to efforts to retain staff.

“We have invested in our people though the downturn by retaining our experienced staff to work on highly technical tenders which, typically, have long gestation periods,” says managing director Philip Cave. “This has meant that on the award of the contracts our people are already familiar with the project requirements and available to mobilise straight away.”

It’s the same approach down the supply chain. Raymond Brown, highly commended in the medium firm category, says key to its success – it has grown civils turnover by almost 50% from £24M to £36M and employs 34 engineers – is recognising its people as its most important asset and devoting considerable effort to developing and supporting strong committed teams.

Buckingham Group chairman and managing director Paul Wheeler agrees. “We have continued to invest heavily in the training and development of our people and have focused our attention on recruiting the best talent available,” he says. The firm – last year’s medium firm winner and highly commended again this year – now employs 67 engineers, up on 49 last year.

North Midland Construction (NMC), another medium sized firm that has performed well, also stresses the importance of its skilled workforce.

 “Over the past 12 months, as a medium sized contractor, we have seen our market reduce in terms of number of jobs, prices being squeezed due to the level of competition and more competition from the large national contractors as they downsize to maintain volume. Despite this we have been able to increase our win rate against this competition using innovation and cost cutting due in no small part to the efforts of our long serving staff that are part of the ‘family’ of NMC,” says chairman and chief executive Robert Moyle.

AE Yates, another shortlisted medium firm, has also spent the year adapting to a recessionary climate yet still managed to hang on to its staff. “We have, by and large, maintained our staff and operative workforce with a minimal level of redundancies and secured employment of our highly skilled workforce, whilst investing in new ventures and providing new jobs,” says business development director Neil McLeod.

Whoever you speak to, the message from contractors is the same – long term sustainable growth will come through investment in people. Can consultants learn from their mucky-booted counterparts? With civil engineering students now facing a grim fight for jobs with employers reporting an average of 130 applications per vacancy (NCE 20 June), for the sake of the future of the industry, one hopes so.

 

 

Readers' comments (2)

  • "Consultants appear to see staff as expendable resources to be brought in or got rid of as and when the market dictates; contractors see them as assets on which to build a future business."
    I was made redundant by a major international contractor in the top 15 of this years NCE Contractors file. The company did nothing more than the minimum legal requirement to help save my job, all suggestions of retraining or relocating were dismissed. I now work for a major consultant in the top 10 of this years NCE Consultants file. Good and bad in all business sectors.

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  • I am sure that most contractors realise that they build what consultants have spent 2 or 3 years designing. As we consultants have hed a downturn for the last 12 months or so I would expect contractors to have a cmparable downturn pretty soon. If clients such as governments don't have the money to build things then everyone in construction suffers, and the management of individual firms makes little difference.

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