Knowledge & Insight

Construction - responding to the economic downturn

Mon 30 January 2012

Nobody in the construction industry would deny that trading conditions are tough right now. Although the downturn has affected virtually every sector of the UK economy, it’s clear that construction companies have been particularly hard hit. On the demand side, homebuyers have found it increasingly difficult to secure mortgages, leading to a collapse in demand for new housing. While on the supply side, many developers have been denied the basic funding they need to continue operating on a day-to-day basis. The challenge for management has been to evolve or die, and the impact on recruitment has been profound.

Many construction companies have been able to quickly adapt their operating plans, switching their strategic focus from growth to stability, cost reduction and perhaps even diversification into related markets. Yet faced with new objectives and a radically changed marketplace, many companies have discovered that the skills and experience they possess at a senior level aren’t well matched to their new requirements, and that’s where recruitment agencies can play a key role in helping companies manage their way through the current crisis.

Stone Executive takes a proactive approach to identifying and attracting senior construction professionals and executives. With a network of contacts that spans the entire country we’re able to actively seek out the best-fit candidates in the market, wherever they may be. It means we’re very well placed to assist companies looking either to bring new skills on board or to attract a different kind of experience to the boardroom.

Effective recruitment has also become a critical success factor at an operational level, and many companies are dispensing with in-house personnel and relying more on interim and consulting staff to provide short term project-specific solutions. Yet there is a great reluctance to lose those staff who are able to really add value in these testing times, and so although many firms are outsourcing the bulk of their labour requirements, they are also maintaining a core of highly experienced, highly skilled people. So while it’s true that many construction management firms, developments companies, consulting engineers and commercial architects are streamlining their operations, it also appears likely that the construction industry as a whole will see a significant increase in the demand for executives with a track-recordof delivering success in similar market conditions.

So what does the future hold for the construction industry?

Clearly a great deal depends on the behaviour of the banks and on their willingness to lend, both to consumers and to businesses. But of course the good news is that people will always need somewhere to live, and with a rising population that means more homes, more roads, more power stations and civil engineering projects. And all these projects will need skilled construction professionals. They’ll need engineers, building planners, architects, building designers, and they’ll need construction firms with the resources and skills to meet that demand.

Although conditions might be hard at the moment it’s certainly not the first time the construction industry has been under pressure, and it’s during these periods that firms must ensure their operations are efficient and that they have the right people on board. So the challenge for construction companies is not only to manage their way through the downturn, but to ensure they’re well positioned to take full advantage of the recovery when it comes. And that’s where a good construction executive search firm can help, because those companies that retain or recruit the best people are always going to put themselves in pole position when the lights turn back to green.

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