In 2020, Sir John Armitt, Chairman of the National Infrastructure Commission, was speaking to MPs on the All-Parliamentary Group on Infrastructure. His comments on skills in the sector were particularly revealing.
“At present, there is an insufficiently joined-up approach to infrastructure skills development in the UK, with a wide range of responsible bodies operating across different geographic and political boundaries,” he explained. “The human capital aspects of the National Infrastructure Plan for Skills need to be refreshed to help ensure our pipeline of future workers is adequate for the challenges ahead.”
The UK faces a skills crunch if it’s to meet the huge demands facing its investment requirement in infrastructure, today and into the future. The scale of challenge will only grow in the years ahead as factors such as sustainability and digitisation continue to transform the way our national infrastructure is built and used.
These are some of the pressures we see playing out every day when searching for leadership talent across the UK infrastructure space. In the article, we look at how this situation has come about, and what leadership skills will be needed if the UK is to succeed in renewing and developing its infrastructure base to the degree needed.
A diverse and shifting landscape
“Infrastructure” includes an array of asset classes, which encompasses fixed assets, and which must be built, operated and maintained to support the lives of everyone in the UK. From roads to rail, from ports to airports, from power stations to transmission lines, from mobile masts to broadband fibre-to-home, from houses to hospitals – and the list is growing all the time. As climate change continues to play out, UK critical infrastructure will increasingly include further categories such as coastal defences, insulation, and new heating systems.
Historically, investment in international and regional infrastructure was the preserve of central government: for example, most of the UK’s airports started life as RAF bases. But since the privatisation programmes of the late 80’s, that has changed dramatically as the UK became a prime mover in inviting private capital to fund infrastructure through a variety of funding models.
The long-term nature of infrastructure investment and long asset-life profile returns is naturally attractive to managers of pension funds. These assets pay back have extended payback periods, as opposed to typically much shorter timeframes required by private equity investors. If we look at the private capital which now owns assets like airports, ports and gas transmission pipelines, it has largely come from infrastructure funds investing on behalf of their pension fund clients.
Adaptable stakeholder management is fundamental
What does this mean for talent? If you’re running a port, airport or other infrastructure asset, you’re just as likely to be working for financial investors as for government – sometimes both, under a hybrid ownership model. This has major implications for the skillset of the Board, CEO and leadership team. If you’re working solely for government, you’ll need well-developed political antennae. If working for private sector owners, you’ll also need deep experience in primarily managing and engaging financial shareholders.
Either way, a prerequisite is expertise in managing stakeholders. The entities that make up those stakeholders are also likely to go far beyond the owners. Depending on the nature of the asset, other interested parties may well include regulators, environmental lobby groups, local communities and more, all of whose agendas must be taken into account.
Customers also vary widely. A power station, for example, is a single-use asset that might have just one B2B customer taking its output for distribution. By contrast, an airport has a vast array of customers and contractual relationships to manage, both B2B and B2C, often with close interdependencies between them. Imagine the complex web of commercial parties who bear responsibility for a lost or damage piece of checked baggage.
The result is a highly complex stakeholder management matrix which calls for a special set of operational skills from leadership – who must also remain primarily focused on generating a financial return.
The rise of technology and sustainability
The already multi-faceted management challenges involved in building and running infrastructure assets are now being further complicated by rapid advances in technology and the increasing urgency around action on climate change. More and more infrastructure-related transactions are now being handled through mobile apps – from buying airline tickets to booking parking, paying for motorway tolls, managing utility bills or reclaiming delay repay rail fare.
On climate change, the challenge of decarbonising existing assets to support net zero is balanced by the opportunities for the UK in developing renewable and/or lower-carbon energy sources like wind, tide and nuclear. With all new cars sold in the UK needing to be electric vehicles (EVs) from 2030, there’s a massive need for and potential in investment in EV-charging infrastructure. The same applies to improving the insulation of business premises and private dwellings, even before we progress to rolling out more energy-efficient domestic heating systems such as heat pumps.
All of these developments are expanding the skills requirements for leaders of the UK infrastructure industry – and in turn putting pressure on the supply of people with the necessary skills. What’s more, as many leaders in the sector step down, this will create a big gap to fill.
Broadening the talent pools
UK infrastructure companies increasingly need to look more broadly to identify and secure the leadership talent they’ll need to navigate them to a more sustainable and digitally enabled future. Beyond this, they’ll also need to broaden their scope across a wider range of sectors and offer the right individuals the right mix of financial and career incentives to convince them to build their legacy.
The people who lead the development of flagship infrastructure, such as international rail or air terminals, often acquire visibility and cachet through their achievements. While money is always part of the equation, the opportunity to make a lasting mark on the fabric that sustains our society is also a key motivation for many individuals. This can make the difference in an increasingly competitive skills market where all countries are facing similar challenges and competing for the same (and international) talent pools.
A new generation of infrastructure and leadership talent
Although UK infrastructure leaders still need outstanding stakeholder management skills, the capabilities they require are expanding rapidly in areas like sustainability and digitisation. As our opening quote highlighted, building smarter for the future demands being smarter about skills acquisition and development – a goal that requires input from both government and the private sector. The UK is committed to an enormous range of infrastructure investment and requires a new generation of leaders to develop it. Helping to find them is where we at Redgrave excels.
To learn more about how we can help you find and attract talent with the capabilities to succeed in infrastructure, contact Jon Boyle.