The primary effect of the skills shortage in construction is cost. Difficulties in sourcing staff comes with increased recruitment costs, as construction companies have to increase their efforts and spend to try and find workers. In turn, this can mean a rise in inflated salaries, as businesses need to overpay to secure skills that are in short supply.
Paying over the odds for staff is also an issue in temporary staffing situations. While waiting for a long-term solution, companies often have no choice but to pay a much higher rate for temporary staff as a stop-gap. Short-term gaps have cost UK organisations an additional £2.2 billion in 2020 versus 2019. There is also the associated cost of training workers hired at a lower level to bring them up to the desired level of qualification.
Turning down work has major consequences for construction companies, but accepting contracts they are then unable to fulfil has repercussions to their reputation in the industry. The skills shortage in construction can result in a project going over time and over budget, so both projects and construction companies are affected.
Taking all into account, if investment in skills and training is not implemented at the right level, costs will rise with construction projects, having a detrimental effect on both construction companies and contract or project management.