黑洞社区

Amid the blizzard of alarming economic forecasts and revelations of public spending cuts, it鈥檚 easy to forget that UK construction is still a 拢100bn-a-year market.

Of course, the danger is very real: the Construction Products Association (CPA) is forecasting that construction output will fall next year by 3.6% as a result of plummeting public sector activity combined with subdued private sector construction. Public sector output in particular will drop 11% in 2012 with activity in education, roads, social housing and PFI work set to reduce sharply.

However, construction will be growing in a number of significant areas over the next few years - notably, rail, energy and sustainability. Rail construction, for example, is set to rocket 78% by 2014. Noble Francis, economics director at the CPA, says: 鈥淭he next 18 months are likely to be extremely tough for the majority in the construction industry but for those who are flexible and clever, there are some key areas where you can win millions of pounds of work.鈥� And it is also likely to be these 鈥渇lexible and clever鈥� firms that will have a head start when construction recovery does occur, currently forecast by the CPA for 2014.

So how should businesses be positioning themselves to ensure they are best placed to capitalise on opportunities now and in the coming three years? We asked forward-thinking employers how best to line up staff and create lean structures to succeed in the current market conditions and follow the market into recovery. Below are the seven top tips that emerged.

1. Hire graduates and trainees

While few firms have been able to avoid lay-offs, as counterintuitive as it may seem, now is the time to hire graduates. Mott MacDonald, the UK鈥檚 second largest engineering firm according to 黑洞社区鈥檚 2011 Top 200 Consultants rankings, with 2,505 chartered employees in the UK, has taken on more than 100 graduates this year.

Kevin Stovell, group strategic development director, says that this is about half the peak intake of 2008, reflecting the downturn, but fresh talent is still deemed essential. 鈥淎fter previous recessions there were sectors where hardly anyone had been training staff - we are not going to get caught out that way.鈥�
The recruitment strategy does take account of market conditions, however, with a greater number of graduates being channelled into the busiest sectors, which for Mott MacDonald are rail, power and water. This recruitment policy will continue into next year, when the firm plans to draft in a further 120 graduates.

2. Cut back where it鈥檚 needed

Falling workloads mean that lay-offs are unfortunately unavoidable for many firms but it鈥檚 vital to make cuts in the right areas. This may mean reducing numbers in slow geographical regions - as Balfour Beatty and Bam Construct did in October when they entered into redundancy consultations with some staff in the North-east.

Alternatively, if the business has too many high earners, lay-offs may be needed at senior management level, as is under way at Davis Langdon, which is cutting about 30% of its 175 directors.

All three firms have pointed to the need to be more lean. Stovell warns against going too far, however: 鈥淲e do have fewer staff in the UK than in 2008 and have reduced in sectors such as buildings and highways but I can鈥檛 think of an area where have reduced to the extent we do not have significant capability to operate in a sector. Where appropriate we transfer employees between sectors and even countries, if this appeals to them.鈥�

3. Reward your staff

It may be tempting to reduce employee benefits in the downturn as part of an economy drive, but ring-fencing benefits is a simple way of retaining the best employees. While it will not save the company money per se, neither does it add to costs. With other companies cutting benefits, you鈥檒l be ahead of the competition simply by maintaining your firm鈥檚 status quo.

Mace, the contractor building the Shard, has adopted this strategy, maintaining existing deals on pensions, health and life cover, and even improving the package by upping the company鈥檚 pension contribution. Kath Knight, human resources director, says: 鈥淲e wanted a very competitive pension offer because we know pensions are increasingly important to people and we realise that employees do have a choice about where they work, even in this environment.鈥�
Mace also tries to offer benefits other companies tend not to, such as 鈥淢ace days鈥�, which are days off for dealing with problems at home or a sick relative. Knight says: 鈥淵ou can book a Mace day at short notice and it doesn鈥檛 come out of your holiday. It鈥檚 about making people feel good about working here.鈥�

4. Plan for growth

Believe it or not, forward-thinking firms are gearing up for a surge in demand. John Stanion, chairman and chief executive of the UK contracting arm of Vinci, Europe鈥檚 largest contractor, says: 鈥淚鈥檓 very optimistic, especially regarding the medium term. Consider the government鈥檚 National Infrastructure Plan [the second phase of which is expected to be announced this month]. This will require huge numbers of skilled people. Nuclear new build at Hinkley Point power station alone will require a management team of around 1,000.鈥�

For this reason Vinci UK has some 200 vacancies and it is also working overtime on training existing staff, whether sending them on management courses or up-skilling them in Vinci鈥檚 various training 鈥渁cademies鈥�, such as the Vinci Energies Academy, Montesson, France. Stanion says: 鈥淲e鈥檙e giving people the best training so we can maximise the opportunities coming up.鈥�

Neither is the approach only for big players. Margolis Office Environments is a 40-strong, 拢18m-turnover office design and build firm based in London. Managing director Geoff Andrew says: 鈥淲e recently decided that as the market is tough we should stop aiming for growth and focus simply on surviving.鈥� Andrew swiftly changed tack, however. 鈥淲e realised that if you don鈥檛 have a growth objective you make different decisions, such as focusing solely on existing clients.

鈥淚f you are trying to grow you have a healthier approach, including proactive marketing to win new clients. Whether we get to our objective is an interesting question but the point is that we have growth plan and that energises the business.鈥�

5. Innovate

Stanion believes it will be critical to invest in innovation in the coming years, even if money is tight. 鈥淲e will not survive unless we innovate, as it is the only way to progress. Look at Steve Jobs [the late co-founder of Apple]. He achieved a revolution simply by radically improving technology that was already there.鈥�
At the heart of Vinci鈥檚 UK innovation drive is its Technology Centre, which researches and offers services in all aspects of construction and engineering, from sustainability to rain noise testing and building pathology. In Paris, where the firm is headquartered, its think tank The City Factory is researching the future of the world鈥檚 cities. Vinci also promotes sharing ideas in within its business through in-house innovation awards, which had 170 entries this year.

6. Be twice as sustainable

As firms position themselves for the coming years, they should take a dual approach to sustainability: it can be sold to as a service to clients and also implemented internally, saving money and improving corporate social responsibility, which can help to attract investment.

It is worth investing up front too, with a view to a longer term pay-off. Margolis, for example, hired a sustainability consultant. Andrew says: 鈥淒espite some capital costs like installing an energy meter, we have halved the paper we use and we all turn off our PC screens, so - while I don鈥檛 have the numbers yet - this is clearly going to pay off. It鈥檚 good for the environment but it also makes pure business sense.鈥�

Meanwhile, firms from Vinci to 85-strong consultant John Rowan & Partners are underpinning all client services with sustainability. Echoing the strategy of a growing number of the sector鈥檚 more innovative firms, Stephen Gee, managing partner at John Rowan, says: 鈥淲e鈥檙e positioning ourselves so that sustainability is a key part of everything we do for clients - not a standalone service.鈥�

7. Go international

More than ever, overseas work is crucial. Consultant Gleeds, which employs 644 staff in the UK, plans to grow its international business from 30-35% of turnover to 50% within three years. Stuart Senior, managing partner, says: 鈥淲e think the UK market will be stagnant for up to 10 years, so you can choose to stay there and face rising costs, which will diminish your business, or go for some of the wonderful opportunities abroad.鈥�

In line with this, Gleeds recently acquired US consultant ProjectConsult, which is based in New York and Sao Paulo and plans to buy more firms in Australia, the Far East and Central Europe. It is also on a huge recruitment drive for its existing offices outside the UK, with plans to hire about 200 people in India and China.

Neither is international growth a strategy for larger firms alone. John Rowan & Partners works in Paris and Prague and began working in New Zealand in June after forming an alliance with Miles Construction Group to work on rebuilding the city Christchurch following the February earthquake. The firm is even looking at a job in Democratic Republic of Congo. Gee says: 鈥淎lthough we are medium-sized, we have to be as flexible and ambitious as a bigger firm.鈥�