The housebuilding industry in the UK has a big problem, a ticking demographic time bomb that could see the start of a new War for Talent in the sector. Around 20% of the workforce is due to retire in the next four or five years, and by definition those reaching retirement are typically the more senior individuals in a business.
Depending on the make up any given company, this could be as high as 70%-80% of the company’s senior management structure. Natural attrition rates like this within business are nothing new, and in most circumstances, there are people coming through to succeed those hanging up their boots and swapping the office for the golf course or the beach. What makes the residential industry’s situation unique is what we saw happen in 2007-2008 because of the global financial crisis. Companies folded, regions closed, and those Companies that weathered the storm were reduced to skeleton staff levels almost overnight. Thousands of people were lost to the industry, and there then followed a fallow period for a number of years where limited new blood was brought in to the industry.
This has resulted in a wide experience gap between the most senior people in the industry, and those looking to replace them. That is not to say that there aren’t good people coming through the ranks, but even with training and succession planning there just aren’t enough people with the right level of experience to fill all the holes that will soon start appearing at regional board level across the industry. There’s no substitute for experience, and that is especially true when problems arise. Whether it’s in Build, Technical, Commercial, Sales, or Land, experienced Directors are already a highly sought-after commodity, and soon they are going to be even more in demand.
Employers need to be able stand out in a crowded and competitive market, companies that don’t regularly review their salary levels, or offer a better work life balance, could soon find themselves losing out when it comes to securing the best talent to fill those key senior positions.
The housebuilding industry is heading in to unchartered territory and those companies that adapt their recruitment & retention strategies and implement effective management training & succession planning are going to be the ones best placed to diffuse the retirement time bomb.