The water industry looks set to receive massive investment in its water and sewage infrastructure for the five-year period between 2025 and 2030. According to a release published on water.org earlier this month, water companies in England and Wales have submitted “ambitious plans” to the regular Ofwat. The top line from the release is;
The creation of 10 new reservoirs
Reducing leakage by a quarter from 2020 levels
Technology at sewage works to remove phosphorus from rivers
Reducing overflow spills
Plans expected to create over 30,000 jobs and 4,000 apprenticeships
Proposed 50% increase in workforce
3.2 million households will receive support
Carrington West’s water team Department Manager, Dave Kua, speaks about the impact this level of investment will have on the recruitment of engineers in the water industry.
“With a projected 30,000 plus jobs being created, it will prove a challenge for companies to hire sufficient skilled labour to deliver all their schemes. The talent pool is already under pressure, so there will be increasing importance placed on talent attraction, retaining existing staff, training and upskilling, and the use of temporary/contract workers to plug the skills gap where needed. To elaborate on each of these points;
Staff Attraction and Retention: Skilled and experienced employees are the life source and biggest asset of any water business. Staff retention is going to be a big driver for their ability to respond to the market demands. With Covid we saw companies adapt, offering hybrid working which has quickly become the industry norm. Regardless of evolving employer needs, candidates are expecting some sort of hybrid/flexible working and it is perceived as negative by candidates if it is not offered. I would expect water companies, in an increasingly competitive talent market, to review and improve their benefit packages, work-life balance offerings to improve staff retention.
In terms of talent attraction, I have also inevitably seen water sector companies increase their salary rates by up to 10% in 2023 and would expect to see similar increases in 2024.
Training and Development: The water sector has a deficit of skilled labour and there are simply not enough experienced water engineers to support the current or increasing demands in the market. As a result, I would anticipate seeing companies expanding and improving their training and development programs, allowing them to attract unexperienced staff and upskill them. In tandem, they will have to create more robust career paths to increase staff attraction and retention.
Rise of the Contract Workforce: Securing permanent staff takes time, and in such a competitive market, candidates can have their pick. As a result, I expect companies will have to rely on contract engineers to keep water project delivery on track. Contract workers are paid a premium compared to permanent staff in almost every skillset across the industry. This in conjunction with multiple external factors, most notably the 2021 IR35 reforms, has made finding and appointing skilled workers considerably tougher leading to a 20-50% rise in rates for Inside IR35 workers compared to Outside IR35 staff for similar positions. We expect organisations in the sector are going to be willing to pay the premium when they are unable to find permanent workers, despite the cost implications.”