Mr. Dermot Carey:

I thank the committee for the opportunity to outline our views on apprenticeships in the construction sector.

I shall provide some context on the changing face of employment in the construction industry as Ireland faces the challenge of generating the 112,000 additional employees, which is required up to 2020 to deliver the targets set out in both the housing strategy and the public capital programme, and to deliver on foreign direct investment projects.

Let us consider the challenge. Rebuilding Ireland sets a target of 25,000 annual housing output by 2021. The public capital programme outlines some €40 billion in activity including road, rail, water and broadband up to 2021. Foreign direct investment has specific requirements for hi-tech construction projects. The Government has committed to delivering 47,000 social housing units up to 2021. Based on these targets, DKM Economic Consultants and the SOLAS labour market research unit, predicts that the sector will require 112,000 additional skilled people up to 2020 to deliver on this target. This figure includes replacing the 36,000 people who will retire from the industry during this period. This is an enormous challenge.

We are here today with a very clear warning; there is an urgent need for the Government and industry to collaborate in attracting more people into the industry and to invest in construction skills training. The alternative is that we will fail to meet these targets, our housing crisis will continue and our infrastructure deficit will stall economic progress. Foreign direct investment confidence to deliver will also be hit. This is a huge threat to Ireland Inc and the long-term capacity of the industry and the State.

We need to address this by attracting people into the industry from the live register, through the education system and from those with construction experience in the diaspora and by upskilling those currently working in the industry. We also need to begin to address the apprenticeship system to ensure we have a steady stream of skilled employees to sustain the construction activity our economy and society requires. The industry is hiring 1,000 additional employees per month since 2013 and by 2020 if we achieve our targets we will have more than 200,000 people working in the industry, plus 80,000 indirect jobs. It is against this pressing demand that we have to examine apprenticeships and skills in the industry.

The first key point to articulate is that the construction sector has been the principal industry sector in Ireland for employment of apprentices. At its height the sector employed nearly 27,000 apprentices. Following the decline of the economy from 2008 onwards, this number fell to around 7,000 in 2013. The figures I have included in my submission to the committee indicate the collapse of apprenticeship registrations from 2007 to 2013. There is, therefore, a resulting skills gap that has been created from almost ten years of stagnation. The extent of the collapse in registrations is more specifically highlighted in the figures and outlines the difference in registrations in the wet trades between 2006 and 2016; bricklaying and stone laying registrations were 679 in 2006 and 56 in 2016; floor and wall tiling registrations were 43 in 2006 and zero in 2016; painting and decorating registrations were at 161 in 2006 and at 27 in 2016; and plastering registrations were at 310 in 2006 and 18 in 2016.

In the context of the need to ramp up residential construction to meet current and rising housing needs, the figures outlined point to a major concern regarding the ability to deliver the emerging needs of the State, especially as the residential sector is labour intensive and requires high levels of input from the wet trades. Urgent and innovative thinking is required to address this skills need in the short term in addition to increasing apprenticeships in the medium term.

The Construction Industry Federation commissioned DKM Economic Consultants to develop a skills demand forecast in conjunction with SOLAS's labour market research unit based on the Government's strategy and the residential infrastructure provision. The extract from the document, which we submitted to the committee, highlights the forecast demand of existing employment within the construction industry. This demand indicates that there is a huge opportunity to increase apprenticeships into certain categories. We are working with SOLAS and others to address issues within the apprenticeship and traineeship system. Intake into the mechanical, electrical, carpentry and joinery trades are increasing at a reasonable pace. The difference, however, between apprenticeship registrations for the wet trades and the projected needs indicate an alarming scenario.

Our house building members, particularly outside the greater Dublin area, are reporting a very fragile recovery. In addition, those house builders who are emerging from recession are in recovery and survival mode. The recession has also fundamentally changed the nature of employment in the sector, rendering these apprenticeships unsuitable for the sector. For example, there is a predominance of sub-contracting where much of the work is done by smaller contractors who are not confident enough to take on apprentices at this time. The current phase format also causes operational difficulties for smaller companies when phase two is 20 weeks duration off the job and the employer is missing that person for all this period. This causes difficulties for a small business. There are costs associated with employment such as the removal of redundancy rebates and initial training costs with uncertain outcomes for this initial investment. There are also the low margins that still exist in the sector.

Apprenticeships are critically important and valuable to the construction industry so we are highly motivated to have a thriving model. To examine how apprenticeships can be made more relevant and attractive in the changed environment in the industry, we have commissioned Dublin Institute of Technology, DIT, to carry out research into the barriers to entry into apprenticeships. We will feed the results of this research into SOLAS with a view to addressing this issue. In advance of this research there are two potential solutions we would wish to comment on. The first is the promotion of apprenticeships as a valid path to a fulfilling career in construction and second is the particular issues with the wet trades. Our experience has shown that apprenticeships are poorly regarded among the public. The reporting of school league tables lauds those schools with 100% of students going on to university, even though drop-out rates are very high in first year at up to 70% on some courses. Apprenticeships are poorly promoted at second level. There is a lack of understanding of career progression opportunities for apprentices. Apprenticeships have been predominately construction focused, and the fear of a boom and bust economic cycle impacts on registrations. There is a lack of choice of apprenticeships limits entry; if one is not interested in construction, motor mechanics or printing, then there is no route available.

However, we accept that this is being addressed.

Therefore, what is required at this point is a promotional campaign to raise awareness of the career potential of the apprenticeship route, as was suggested in the 2013 report, "Review of Apprenticeship Training in Ireland". We are actively supporting SOLAS in the delivery of such a programme in the coming months. The CIF also believes that Government and industry should embark on a construction careers campaign to promote careers in the industry targeted at young people and those in the diaspora. The industry's attractiveness as a career destination must be highlighted through a targeted awareness campaign. As for the wet trades, we believe radical intervention is required to increase the registration numbers, particularly if the emerging needs of the economy are to be met. We have been a supporter of the employer-led nature of apprenticeships. However, the business model of employers in this sector has fundamentally changed. Therefore, we propose: a non-sponsored route into the wet trades for a limited time, that is, a scheme where apprentices would be taken directly into training centre for two phases of the apprenticeship and then taken on by employers once they have gained some skill; and re-introducing day release for these specific trades where small employers could release the apprentice one day a week rather that the current system, which takes the apprentice away for up to 20 weeks at a time.

Finally, by 2013, the CIF was forecasting recovery in the construction industry and that we needed to be proactive to address the skills needs of the sector. To this end, the CIF's manpower, education and training committee developed initiatives to ensure adequate talent was available to the sector, including engaging with career guidance counsellors through the Institute of Guidance Counsellors and careersportal.ie; launching a new website, apprentices.ie; revising the gradirelandconstruction careers booklet to include apprentices; engaging with schools nationally to promote entry; engaging with the TechnoTeachers Association to promote entry; engaging with Waterford and Wexford ETB and SOLAS to run a pilot apprentice sharing scheme. In addition, companies, such as Castle Ceilings, Errigal Contracts and Designer Group have invested heavily in the development of training academies to develop in-house skills. However, all these measures are incremental and in the face of a demand of 112,000 additional employees over the next three years, a quantum shift in support for the apprenticeship model and more collaboration between our industry and the relevant State bodies are required. A high level implementation framework for the action plan for apprentices must be put in place involving all stakeholders.