UK immigration and labour shortages in construction: The energy sector challenge

The United Kingdom’s drive for a greener economy and renewed energy infrastructure has spotlighted the critical role of immigration in alleviating persistent labour shortages in the construction industry, especially for energy projects. What if the UK's ambitious net zero targets are derailed, not by technology or funding, but by a shortage of skilled labour on the ground?

Labour shortages in UK construction

UK construction underpins the national economy, responsible for housing, commercial developments, and major infrastructure, including energy installations. However, the sector suffers from an aging workforce, insufficient young recruits, and an expanding skills gap. These issues threaten ambitious projects, particularly those linked to the UK’s net zero and energy security goals.

Well before the COVID-19 pandemic, the industry warned of labour shortages. The pandemic worsened these through travel restrictions, supply chain disruptions, and workforce challenges. Brexit marked a major turning point, ending freedom of movement between the UK and EU and cutting off access to European skilled workers. The energy sector, with its need for both technical specialists and general labour, has been particularly affected.

Labour challenges for energy sector transformation

The UK energy sector is expanding rapidly, with government targets for carbon reduction, a shift away from fossil fuels, and greater use of renewables. This transformation requires new infrastructure such as offshore wind farms, solar parks, hydrogen plants, and upgraded power grids—all of which demand more workers.

Both skilled and unskilled workers are required: engineers, project managers, welders, electricians, and technicians for renewables, as well as general labourers for infrastructure. However, training local workers has not kept up with demand.

A lack of workers causes delays, cost overruns, and missed deadlines for energy targets. For instance, the UK’s offshore wind sector and nuclear projects frequently cite shortages of technicians, engineers, and welders as project bottlenecks.

Immigration policy and its effects

The most recent update on the UK’s points-based immigration system on 22 July 2025 aims to attract skilled talent while reducing reliance on low-wage migration. Many vital construction jobs - like thermal insulation engineers - do not qualify under the system, creating recruitment challenges for energy projects that need both specialists and support staff.

Some progress has been made by adding certain construction roles to the Immigration Salary List, which makes sponsoring visas easier. Yet, the process can still be complex and expensive, particularly for smaller firms. The emphasis on skilled migration also overlooks the importance of lower-skilled workers, whose absence can halt projects entirely.

It is important for employers to be aware that, as announced by the UK government, the Immigration Salary List will be replaced next year by the newly established Temporary Shortage List. Consequently, there is no assurance that any specific occupation code will appear on the Temporary Shortage List, and if it does, its inclusion will only be temporary.

An illustrative case involves steel erectors and welding trades, which are among the most difficult skilled trades and labour positions to fill. In the absence of access to overseas labour markets, the construction sector would face increasing difficulty sourcing adequate labour. As observed in current industry practices, labour shortages have led to a significant increase in salaries to attract skilled workers from other projects; for instance, major infrastructure projects may draw talent away from smaller initiatives, thereby impacting the progress of various regional projects.

Workforce diversity and innovation

Immigration has long enriched British construction by fostering diversity, innovation, and productivity. International experience combined with local know-how has been crucial for adapting to new technologies in energy. Restrictive immigration policies risk narrowing the sector’s talent pool and reducing its ability to meet future challenges.

Addressing the construction labour shortage, especially in the energy sector, will require several actions:

• Assessment of current workforce and recruitment pipeline: Conducting a thorough evaluation of the existing workforce and recruitment pipeline - including graduate and apprenticeship programmes - is essential to determine the extent to which they may be affected by changes in immigration policies. This assessment will help organisations remain resilient in the face of recent and future policy developments, as outlined in the UK government's immigration white paper.

For example, identifying positions that may require backfilling if a current or prospective employee becomes ineligible for sponsorship, or exploring development opportunities that enable the retention of current talent who can then meet sponsorship criteria.

• Compliance: Adhering to sponsor duties and ensuring prevention of illegal employment is increasingly critical, particularly in light of the Home Office’s latest announcement highlighting record numbers of visa sponsor licence revocations.
• Development of workforce strategy: Investing in domestic training and re-skilling initiatives, as well as strengthening partnerships between industry and educational institutions, are key strategic priorities. Many employers are collaborating with educational partners to address organisational labour shortages, evidenced by Persimmon and Bellway’s partnership with Teesside University to develop the new Level 6 Construction Quantity Surveyor degree apprenticeship.
• Expansion of the Temporary Shortage Occupation List and circular migration: Organisations should advocate for the inclusion of additional construction and energy-related roles on the temporary shortage list to facilitate visa processes for semi-skilled workers. Enhanced collaboration with the UK government is recommended to identify solutions to ongoing labour shortages.
• Targeted overseas recruitment: Actively promote UK construction and energy sector opportunities worldwide to attract critical expertise where it is most needed.

Looking at the whole

It is essential for employers to take proactive measures to address current labour shortages. This begins with compliance regarding illegal working and sponsorship obligations, and training and re-skilling local workforce, as well as conducting thorough assessments to identify other challenges within their organisation and workforce before pursuing further external solutions.

There is something that is very clear – the future of the UK's energy transition depends on bold action today. Employers, policymakers and colleges need to work together to ensure that the workforce is ready.

If your organisation is facing these challenges, now is the time to review your workforce strategy and seek expert advice. If you need guidance on immigration and workforce solutions, get in touch with us today.