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New employment and migration rules could make construction’s flexible labour model more expensive and less dependable. In Simon Rawlinson’s 16 June 2025 opinion, the proposed changes would push contractors away from heavy reliance on agency, umbrella-company and self-employed labour and towards direct employment, training and retention. That is an informed industry view, not a statement of current law: the legal status and commencement of each measure must be checked before you change contracts or payroll.
The pressure is real even before any rule change. Official figures show a large workforce, persistent shortages, and several different forecasts of future demand. The useful response is to separate those measures, model several labour scenarios, and invest early in skills, supervision and retention.
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Construction does not have one labour market. A major infrastructure contractor, a small house builder and a specialist subcontractor use different mixes of permanent employees, agency workers, umbrella-company arrangements and genuinely self-employed tradespeople. Projects also start and finish at different times, so firms have traditionally valued the ability to expand and contract quickly.
Rawlinson, a partner at Arcadis, argues that proposed changes to employment rights and migration would collide with that project-based model. He wrote that “These changes are not compatible with construction’s existing business model.” That sentence is his assessment of the proposals as understood on 16 June 2025, not a government finding or a prediction that every contractor will face the same result.
The underlying workforce challenge is supported by current official evidence. The Office for National Statistics (ONS) counted 1.4 million construction-related employees in Great Britain in 2024, excluding self-employment. The total was 0.6% higher than in 2023, yet businesses continued to report shortages of skilled labour and vacancies remained above pre-pandemic levels. ONS identifies an ageing workforce and a reduced supply of EU labour among factors associated with the shortage.
In the ONS voluntary Business Insights and Conditions Survey, 24% of UK construction businesses with 10 or more employees reported worker shortages in early February 2025. That is the share of surveyed businesses reporting a problem; it is not a vacancy rate and does not mean that 24% of construction workers were missing.
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Read the workforce numbers without mixing unlike measures
These figures answer different questions. Treating them as interchangeable can make a staffing plan look more precise than the evidence allows.
| Figure | What it measures | Scope and qualification |
|---|---|---|
| 1.4 million employees | People employed in construction-related work | Great Britain, 2024; ONS release in 2026; excludes self-employment; 0.6% increase from 2023 |
| 24% | Businesses reporting worker shortages | UK construction businesses with at least 10 employees in the voluntary ONS survey, early February 2025; a business share, not a worker or vacancy rate |
| About 28,000 vacancies | Open construction vacancies | UK, three months to January 2026; government Industry Training Board reform consultation; about 13,000 fewer than a year earlier |
| About 240,000 additional workers by 2030 | Potential extra workers needed | CITB forecast reported in the 2026 government consultation; business-as-usual assumptions |
| About 110,000 workers per year | Additional annual requirement in a higher-demand scenario | UK government estimate for meeting ambitions for homes, retrofit and infrastructure; a separate scenario, not an addition to the 240,000 forecast |
| 629,000–706,000 workers annually | Estimated workforce needed to deliver the infrastructure pipeline | NISTA March 2026 update; annual average over the next five years; demand estimate, not a shortage count |
The geography, period, unit of measurement and assumptions differ in every row. The 1.4 million figure is an employment count without self-employed people. The 24% figure describes businesses. The vacancy figure is a point-in-time demand indicator. The 240,000 and 110,000 numbers are conditional forecasts, while NISTA’s range describes the workforce needed to deliver a pipeline. A board paper should label each figure in full rather than presenting one headline “shortage”.
How will new employment rules affect construction workers?
The 2025 opinion discusses proposed employment-rights and migration changes, but it does not establish the final wording, commencement dates or exemptions. Because those details were not verified, no contractor should treat the article as legal advice. Check the current legislation, regulations and official guidance for the jurisdiction in which each worker is engaged.
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For workers who are currently self-employed
If a project can no longer rely on the same level of self-employed labour, some workers may be offered direct employment or a different intermediary arrangement. Direct employment can bring more predictable work and access to employer-provided training, but it can also change take-home pay, tax treatment, notice arrangements and the freedom to move between projects. The correct outcome depends on the actual relationship and the rules in force, not simply on the label in a contract.
For agency and umbrella-company workers
Contractors may review how agency and umbrella-company labour is sourced, paid and supervised. That could mean fewer last-minute bookings, longer commitments or a preference for suppliers that can demonstrate compliant payroll and right-to-work processes. Workers should ask who their legal employer is, which organisation pays them, what deductions are made and who handles grievances or safety concerns.
For migrant workers and employers
Changes to migration policy could affect which roles can be filled from overseas, how quickly a worker can start and the evidence an employer must retain. The 2025 commentary treats that as a potential reduction in labour flexibility. Employers should not infer eligibility from an old project or a worker’s previous permission; check the current route, dates and documentation for every engagement.
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For apprentices and existing employees
A tighter supply of contingent labour makes retention and progression more valuable. Firms that provide structured training, competent supervision and a credible route from entry-level work to skilled roles may be better placed to keep people through the end of a project. That is a workforce strategy, not a guaranteed legal consequence of any bill.
What the proposals could change in a contractor’s operating model
Rawlinson’s “carrot and stick” description captures two pressures moving together: public support for skills and training, alongside proposed changes that could increase the employment risk carried by firms. The practical effects are best tested as scenarios rather than assumed as a single forecast.
- Cost structure: moving a role from a short-term external arrangement to employment can add payroll administration, supervision and periods when the worker is retained between projects. The exact cost depends on the final rules and the contract.
- Planning horizon: a project team may need earlier commitments to secure scarce trades, rather than relying on a large pool of people available at short notice.
- Compliance ownership: responsibility for status checks, records, pay and worker communications may sit more clearly with the principal contractor or subcontractor. Map who performs each task and who keeps evidence.
- Bid and programme risk: a tender that assumes unlimited agency or overseas labour may be vulnerable if supply tightens. Price realistic recruitment, training and lead times into the programme.
- Productivity and safety: frequent churn can increase induction and supervision demands. A stable team can retain site knowledge, but only if managers plan workload and development rather than treating retention as a slogan.
A scenario-planning method for 2026 and beyond
Use a written model that can be updated when the law becomes clearer. It should show the people, cost and delivery consequences of each option.
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- Map the current workforce. For every project, record employees, agency workers, umbrella-company workers, subcontractors and genuinely self-employed people separately. Include trade, competency, location, expected end date and the supplier or employing entity.
- Identify roles with no near-term substitute. Mark occupations where one departure would stop a critical activity, delay a handover or overload a supervisor. These are retention and succession priorities.
- Build three labour cases. Model business as usual, a reduced-contingent-labour case and a higher-demand case aligned with the homes, retrofit and infrastructure ambitions cited by government. State assumptions about recruitment, training throughput, migration and project start dates.
- Stress-test the programme. Vary start dates, wage rates, sickness, attrition, onboarding time and the availability of specialist subcontractors. Show the point at which a project needs a new shift, a different sequence or a revised completion date.
- Assign decision triggers. Examples include a vacancy remaining open for a defined period, a key trade leaving, a supplier failing a compliance check or a migration route changing. Give one accountable owner authority to act.
- Review at every major legal or commercial change. Record the date, the rule or guidance checked, the affected contracts and the resulting action. Do not allow an old interpretation to survive because it is embedded in a template.
Training and retention are not optional extras
The government consultation says increased recruitment and retention alone are unlikely to meet forecast demand. Its cited CITB forecast points to around 240,000 additional UK construction workers by 2030 under business-as-usual assumptions. The separate estimate of about 110,000 workers per year relates to meeting stated ambitions for homes, retrofit and infrastructure; it should not be presented as a revised version of the 240,000 figure.
A useful programme combines several routes:
Make entry routes visible
- Publish the competencies, site experience and qualifications attached to each entry-level role.
- Offer supervised, paid pathways that let new entrants progress to recognised skilled work.
- Coordinate with colleges and approved training providers so classroom schedules match project demand.
Keep experienced people productive
- Pair experienced workers with successors before retirement or project completion.
- Use phased responsibilities, mentoring and less physically demanding tasks where appropriate, rather than losing knowledge abruptly.
- Track why people leave: pay, travel, management, insecure scheduling and lack of progression require different fixes.
Train supervisors as well as trades
More entrants increase the need for competent line management. Supervisors need time and support to induct, coach and verify work safely; otherwise a recruitment gain can become rework, incidents or early turnover.
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- Get a current legal review. Confirm which employment-rights and migration provisions are enacted, when they commence and whether transitional rules apply. Use the worker’s actual circumstances, not a job title.
- Explain changes individually. Tell workers who employs them, how pay is calculated, what deductions apply and where to raise concerns. Give enough notice for questions and independent advice.
- Check supply-chain controls. Require labour providers and subcontractors to document right-to-work checks, payroll responsibility, insurance and competency evidence. Keep an audit trail.
- Protect continuity. Identify critical workers who could be lost during a transition and agree handovers, cover and training dates before a contract ends.
- Reprice work honestly. Include realistic recruitment, supervision, training and contingency allowances in bids. Do not hide a fragile labour assumption inside a low tender price.
Common mistakes and how to avoid them
- Calling every worker “self-employed”. Status follows the facts of the relationship and applicable law. A label cannot resolve control, substitution or integration questions.
- Using the 1.4 million figure as available labour. It excludes self-employment and covers Great Britain’s construction-related employees; it says nothing about a particular trade, region or project date.
- Turning 24% into a vacancy rate. It is a survey share of businesses with at least 10 employees reporting shortages in early February 2025.
- Adding the forecasts together. The 240,000-worker CITB forecast, the 110,000-per-year ambition scenario and NISTA’s 629,000–706,000 annual pipeline workforce are different measures with different assumptions.
- Assuming recruitment solves the problem. The consultation specifically says recruitment and retention alone are unlikely to satisfy forecast demand; training capacity and experienced-worker succession matter too.
- Acting on a 2025 commentary as though it were current law. Rawlinson’s article is dated opinion. Check the live legal position before issuing notices, changing deductions or altering a worker’s status.
What the industry should take from the evidence
The immediate lesson is not that one labour arrangement will disappear. It is that a project model built on abundant, interchangeable labour is exposed when skills are scarce and policy risk is changing. Public investment may increase demand: in the March 2026 infrastructure pipeline announcement, Chief Secretary to the Treasury James Murray said, “Transforming this country’s infrastructure is a vital part of that plan and will create high-quality jobs right across the country.” More work does not automatically create more skilled people.
Construction firms should therefore treat workforce capacity as a core delivery asset. Separate employees from self-employed people in reporting, distinguish vacancies from business-reported shortages, and label every forecast by its assumptions. Then combine legal review with scenario planning, training, retention and realistic programme allowances. That is how the industry can face the labour pains Rawlinson described without making unsupported claims about rules that may still change.
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