Brought into focus by the introduction of the Social Value Act back in 2013, the need for procurement teams to derive greater social impact from contracts is a principle now enshrined across both the public and private sectors. This cultural shift is no more apparent than in the construction sector, where many large contractors are looking to unlock value-added benefits for local communities.
In fact, across the board, research shows that social enterprises are currently displaying unparalleled commercial resilience – with 47 per cent experiencing an uplift in turnover over the past 12 months, compared to 34 per cent of SMEs. This increase in market demand is an opportunity that must be exploited, however to do so effectively social enterprises must engage with partners in a measured way and successfully balance the commercial and social aspects of their organisation.
Why construction?
Construction as an industry that naturally lends itself to the presence of social-purpose organisations, driving an exponential increase in contract opportunities for both current and new market entrants. Most large projects require some degree of local knowledge, allowing super-local supply chains to be established and the mobilisation of the regional workforce. Social enterprises often differentiate themselves by adopting a hyper-local approach, one which connects large, sometimes multinational organisations with the networks they need to effectively manage and engage stakeholders.
As a general rule, much of the value delivered by social enterprises comes from securing work for individuals who face barriers to employment, such as ex-offenders or those with disabilities or gaps in training or education. With the construction sector looking for solutions to an impending skills gap, this engagement of a dormant workforce and the seeking of talent in different places is an increasingly popular tactic.
The industry has a low barrier to entry and a hugely varied supply chain spanning hundreds of potential roles including joiners, bricklayers, security, site managers and caterers, many of which can be mastered via on-the-job training. For those working to reintegrate individuals back into the workplace, the opportunities present are vast.
Engaging with contractors
For social enterprises looking to gain increased cut through, demonstrating the correct market approach is essential. Prospective partners must be assured that the organisation functions as a commercially-viable business, that project managers are aware of all contractual obligations and its ability to deliver quality, timely outcomes is parallel to that of privately-run competitors.
These assurances should be communicated alongside a comprehensive overview of the social and environmental impacts of the business, either demonstrated through KPIs, testimonials or previous project case studies. This ability to balance both commercial and social aspects of the enterprise is crucial.
To gain further cut-through, leaders should consider securing a place on the Social Enterprise UK register – subject to compliance checks, this certification can be used in all electronic and printed materials and act as a real asset on new business pitches and marketing resources.
To directly engage with prospective contractors, decision makers should seek out relevant regional meet the buyer events – networking opportunities which often serve to broaden the local supplier bases of large contractors. Approaching firms with a strong track record for CSR can also prove invaluable; for instance Wates Construction actively employs social enterprise ambassadors to connect with potential suppliers, while all contractors present on the public-sector Scape procurement framework are legally-bound to engage with at least one social enterprise per project.
For an example of an organisation that has reaped the rewards of strong commercial and social credentials to secure large-scale contracts with construction firms, we need look no further than waste management expert Recycling Lives. The firm’s team of industry, community and training specialists work with prisons to reintegrate ex-offenders back into the workplace, both within institutions and upon individuals’ release.
The high value and quality nature of the service, alongside its demonstrable social benefits has prompted the organisation’s ongoing success, allowing it to expand its range of services and open offices in new locations, achieving nationwide coverage.
There is no doubt that as the construction skills gap widens and a growing proportion of organisations seek to give more back to local communities, there is a huge opportunity for social enterprises to gain greater market cut through and deliver enhanced social outcomes. For those with growth ambitions, maintaining a key focus on both the commercial and added-value aspects of their organisation will prove essential in engaging with contractors.
Josh Steiner is a social value and sustainability expert at Wates Construction
