BPIE #ClimateConversations: Advancing fairness, skills and opportunities in construction

BPIE’s Climate Conversations series shares a diverse range of perspectives on buildings and climate policies from a wide variety of experts. We seek to explore solutions and illuminate blind spots related to reducing the climate impact of buildings – and enabling a just transition that leaves no one behind.

Upskilling and growing the workforce in renovation and construction is fundamental to scaling up renovation rates that will help the EU achieve its climate goals. At the same time, skills and education are foundational to strengthening the social fabric and ensuring a fair and just transition. You can’t do one without the other.

‘Companies should start hiring directly again and offer decent jobs with good pay and collective agreements.
If this happens, construction will be an attractive industry.’

Tom Deleu, Secretary General, EFBWW

Federation of Building and Woodworkers (EFBWW), an umbrella organisation of trade unions representing workers in construction, wood, forestry and building materials. EFBWW’s seeks to ensure their members are treated fairly in the internal market, which has a massive impact on the construction industry, workers’ rights, salaries, social protection and labour mobility. The organisation also has a strong focus on the green and digital transition.

In this discussion with Tom Deleu, EFBWW’s Secretary General, we consider how subcontracting and outsourcing of employment in the construction industry has undermined the traditional approach to skills training. We discuss the potential role of the social partnership approach, involving business, state agencies and trade unions, in skills training. And we also reflect on the lessons from the Oslo model, which sets minimum quotas for the employment of apprentices on public projects.

Subcontracting and abuses of workers

BPIE: EFBWW has a strong focus on protecting workers in construction and ensuring social fairness. In your introduction of EFWBB, you mentioned there are some industry practices that need cleaning up? What are those?

Tom: What we’ve seen in the last two decades is a model where the construction industry is increasingly moving towards subcontracting, where the bulk of work on construction projects is carried out by subcontractors. While this isn’t new, what is quite new is that subcontracting is being used to drive down prices and the cost of labour. This has created long and deliberately complex chains of subcontracting, and a lot of things go wrong there. We see abuses where workers are not treated equally, do not receive the same pay, and are not properly protected in terms of social protection and health insurance. They are treated as temporary labour, there to fill the gaps in a cheap way.

This leads to a lot of precarious labour on construction sites. There is also the increasing phenomenon of bogus self-employment, which means many of the contractors who engage in tendering are no longer carrying out the projects themselves. A lot of the work has been outsourced – and it is the same contractors who are now saying that there is a huge labour shortage.

And we agree. But this must be connected with the discussion on decent jobs, quality jobs, and investment in skills, which was traditionally done by the construction companies themselves. They hired workers, young workers, and there was a lot of training on the job, but much of the responsibility in this area has also been outsourced through this model that I have been describing.

The Renovation Wave, the European Green Deal, and also the digital transition, offer a lot of opportunities, but we will not be able to take advantage of those opportunities if companies do not take responsibility. And instead of always looking at subcontracting as the first and only answer, companies should start hiring directly again and offer decent jobs with good pay and collective agreements. If this happens, construction will be an attractive industry, which it is not today. Young workers are not choosing careers in construction, and if they do, they’re not staying. They leave the industry quite rapidly, as do women workers. Everybody should be welcome. But we will not attract these categories of workers if we cannot offer better conditions.

Instead of always looking at subcontracting as the first and only answer, companies should start hiring directly again and offer decent jobs with good pay and collective agreements. If this happens, construction will be an attractive industry.

Outsourcing employment

BPIE: You said that outsourcing has been growing. Does this have anything to do with the rise in prices of building materials for contractors, who would compensate the high price of material with cheap labour?

Tom: It’s more that we’ve seen, especially since the enlargement of the European Union, that a lot of potential workers from other backgrounds, who had lower salaries or less opportunities, were suddenly readily available through posting and other schemes to come to European countries. All of this has been done through subcontracting and it has had an enormous impact on the cost of labour. There is a huge drive to reduce labour costs because construction is a very labour-intensive industry.

BPIE: Should companies be regulated more strictly and held to much higher standards? Should they be forced to find ways to hire, to give people proper contracts, proper insurance, etc?

Tom: Based on what our members tell us, outsourcing of employment is always linked to the chain of subcontracting. And it is completely out of control, which is why we launched our campaign on subcontracting. We have some clear demands on how to regulate subcontracting – we’re not against subcontracting per se, but it must be linked to technical needs. What are the specific needs of companies, for example, in terms of knowledge skills which they don’t have in-house? This is very different to having the sole aim of reducing costs. Because then we know that if you have long, complex chains of subcontracting, companies don’t even know what’s happening on their construction sites. And then, of course, things go wrong.

Companies need to promote direct jobs again, because when companies hire workers directly, they will invest in them. Not only by paying them their wages and social security, but also by investing in their skills.

This is linked to the whole discussion on social ID cards and the possibility of creating a European framework for it. This would increase transparency on sites. We would know how workers and companies link to each other, and then link this to ensuring our workers are properly insured, posted and so on. But this can only be effective if it’s also linked with cleaning up the chain of subcontracting and limiting it. Companies need to promote direct jobs again, because when companies hire workers directly, they will invest in them. Not only by paying them their wages and social security, but also by investing in their skills.

The Green Deal and Renovation Wave

BPIE: How do some of the small players in your membership feel about the Green Deal, the Renovation Wave, and the Commission’s objectives? Do they see threats to their jobs and concerns about keeping pace with, for example, new building standards?

Tom: Change is coming very rapidly. This creates a lot of opportunities, so we try to take a positive view that this will change the industry for the better.   The green transition will bring a lot of investment to the industry, which means potentially a lot of new jobs. It’s also clear that there are many challenges, not least because the workforce is not there. And in some cases, the workforce is not ready because the changes are happening so rapidly. There is a relentless drive for innovation in building materials and building methods, and this creates a lot of challenges for training.

Traditionally, the sector dealt with this through strong cooperation between the employees, the businesses, and trade unions. And governmental training and unemployment agencies always had a strong role in skilling, reskilling and upskilling workers especially for SMEs who do not necessarily have the means to set up their own training modules. This is the model of paritarian training institutes that we are promoting on a European level, together with the employers.

This is a model which exists in many Western European countries, but we have a huge gap in Central and Eastern Europe. The Pact for Skills that we signed on a European level could also play a role in increasing investment in skills and helping businesses, including SMEs.

Digitalization of construction

BPIE: Everyone’s talking about digitalization in construction. What do we mean when we say that we need to digitize the sector? What benefits will it really bring to the workers on the ground and who would benefit most?

Tom: There are different angles to this. For example, a lot of the work in developing and executing the plans for renovation or constructing new buildings has been digitalized now with Building Information Modeling (BIM). This has increased construction efficiency and the quality of buildings.

There’s also the idea that at some point, building workers of the future would be wearing smart glasses, and the use of drones in construction is also something being investigated.

Of course, some people fear digitalization might take away jobs. But the majority of industry players believe digitization could be a huge benefit for the construction industry, certainly to fill some of the gaps, and also to get rid of the most dirty, the most intensive and unsafe jobs.

The impact of Minimum Energy Performance Standards

BPIE: There have been a lot of discussions around minimum energy performance standards (MEPS). Do you think that having obligatory standards will help the construction industry? If they know that there’s going to be an increased demand for renovation, isn’t this a good thing? Wouldn’t they then make more money?

Tom: This is the reason we supported an ambitious implementation of the EPBD, although we would like to have seen more emphasis on skills and the link with quality jobs. We’re also aware of the risks, so it must be complemented with support schemes for lower- and middle-income families. They are the ones who economically suffer the most from badly insulated homes, so it’s also in their interest to have better performing homes. But the political reality is that energy poverty and the pressure on income has been a driver for people to vote for more populist parties. This is clearly linked to people feeling more insecure because they do not have stable jobs with decent salaries and social protection. People should have decent jobs and a secure income – it is clear that if this is not addressed, you will have populist parties, especially the far right, trying to exploit people’s fears about their jobs and futures.

BPIE: We’ve talked a lot about the skills gaps in training, and we know that there’s a shortage in the existing labour force. But what about the future workforce? What about young people now? How can the industry be made more attractive to young people?

Tom: It’s very much linked to the fact that construction is the answer to many of the challenges we have in society. The energy crisis, the climate crisis, the housing crisis – these are connected with the need to build new homes, new services, new infrastructure, and to build in a new way. This can attract young people by showing that it’s one of the few industries where you actually physically build something – people in the construction industry generally are always very proud of being a worker building up something from scratch.

But we need to organise the industry in a different way and with a renewed emphasis on skills and skilled workers. I just came back from a trip to our affiliate in Norway and we discussed the changes and challenges there. New legislation in Oslo means companies can no longer hire workers through agencies, which is quite an interesting move. It has pushed many of the big companies to hire workers directly again.

But at the same time, they have been experimenting what they call the Oslo model, where in public procurement there’s an obligation to have at least 5% and, if possible, 10% apprentices in the labour force. And they’ve been reaching those numbers – vocational schools are attracting more young people because they’re quite sure that they will be given access to such apprenticeship schemes in construction. And they also see a construction industry moving towards better working conditions.

The Belgian construction industry is also running a big campaign. It’s called ‘The construction industry looks forward’ and is targeted at young people – the message is that the construction industry is not a traditional industry anymore. It’s about new kinds of jobs. It’s about smart glasses, drone pilots – it’s about people dealing with digital technologies.

Of course, there is also the general societal challenge and changing the attitude of parents thinking  their children should go to university and have a certain degree, and so on. This has meant that the technical professions have been increasingly looked down upon.

Who will push investment in skills training forward?

BPIE: What should be the role of the EU versus member states, versus industry? You mentioned before the example of these tripartite partnerships in vocational training: whose responsibility is it to really push investment in training and education forward?

Tom:  I think that the Commission, but also Member States, should take advantage of the knowledge and experience that exists on the level of social partners. That means the shared knowledge between business and trade unions. In our industry, we have a long tradition of close cooperation between social partners.

One very practical example is that the Commission could push for these kinds of paritarian organisations to become active in Central and Eastern Europe countries. The absence of these organisations is not so much due to a lack of will among social partners, but because the legal framework is too complicated and the lack of political support.

A lot of skills training and apprenticeship programs are financed with public money. So public procurement laws are a valuable tool in this area. We had a very positive revision in 2014 regarding social clauses. Many of the Nordic countries are using these social clauses to promote social apprenticeships, but many countries are not. Therefore, the Commission could foster this further and promote it in a more proactive way. In public procurement, Member States should really look at promoting apprenticeships.

BPIE: Why aren’t some countries doing this? Is it not mandatory?

Tom: It’s not mandatory. Many Member States, or let’s say public clients, do not use it in their tendering for varied reasons. One of the reasons is that for public clients it’s about the cheapest price and they don’t want to know about what’s really happening on the construction sites. There are many other reasons as well, and we feel that this is a missed opportunity that needs to be addressed. In the meantime, through its guidelines and other initiatives, the Commission could promote a lot more apprenticeship programmes and initiatives to shed a positive light on the construction industry such as the Belgian example.

BPIE: The European Year of Skills is coming to an end in May 2024 – what do you think it has achieved and what do you hope its legacy will be?

Tom: Every occasion to talk about skills is a good opportunity for us to highlight the broader issues. The European Year of Skills has been a valuable opportunity for us to spread our views on these topics.

The European Commission could promote a lot more apprenticeship programmes and initiatives to shed a positive light on the construction industry such as the Belgian example.

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