Skills and what can be done to combat issues in the manufacturing sector
A common theme throughout our years of surveys has been the skills gap and issues in recruiting.
One of the main barriers for businesses 2020 growth was recruiting skilled staff at 22%, this is up slightly from last year 19%.
Excluding apprentices, we asked how many businesses anticipated taking on new staff, 48% expected to see an uplift.
Looking at recruitment broadly in the sector 78% felt they have difficulty which has remained the same from last year. Delving deeper into that we asked respondents to select the categories they struggled to recruit the most; experienced engineers were 27%, slightly in front of skilled machinists/ technicians at 25%.
We then looked at the main reasons behind this 67% attributed it to a shortage of applicants, with the second most selected option being lack of motivated applicants locally (24%). Interestingly, most businesses didn’t feel that competition from larger or smaller businesses affected this.
We asked if recruiting relevant skills is an issue, what is your strategy? 55% are investing in training current staff, 16% have a number of employees who have worked past retirement age, 15% are investing in technology to bridge this gap, while 13% selected ‘other’.
The pool of industry experienced people seems limited. We’re now recruiting young office staff that have no industry experience and are training them.
Comment from a respondent
What the data says: EBITDA per employee steadily reducing; recruitment should be well planned and in line with identified capacity needs.
Thoughts from the experts
There has been a consistent message from industry on a lack of skills being a barrier to growth. With reduced access to international talent, programmes that identify capability frameworks for manufacturing businesses and put make the skills content and delivery accessible are essential. There is a role for the IMechE and other professional institutions in partnership with innovation organisations such as the Catapults to map future skills needs and work with providers.
High Value Manufacturing, Catapult (HMV)
These results are consistent with other surveys and with comments from BoE policymakers. The recruitment difficulties have grown as the unemployment rate has fallen. That in turn seems to have fuelled an acceleration in wage growth. And as companies have not been able to pass on the cost increase or offset it with productivity growth profit margins have been squeezed. There are now some tentative signs that these pressures are beginning to ease due to slower growth. However, they could re-emerge relatively if growth rebounds.
Institution of Mechanical Engineers
What does the Job Market Tell us?
MyLMI track a million job adverts every day across the UK to present a comprehensive view of supply and demand of skills across sectors in the UK.
2019 saw an 18% increase overall in engineering and manufacturing recruitment to 1.1 million roles advertised but with a varied end to the year and a mixed regional picture. Q3 saw the largest drop by 19% with Brexit playing a part in the adverts specifically being called out by employers. The year ended extremely well though with a bump of 78% increase compared to the previous year, potentially linked to increased confidence. Regional performance saw double digit growth in all regions apart from Wales and West Midlands which saw small declines overall. The strongest regional growth was in South West and Scotland with 61% and 37% respectively. Top jobs and skills most in demand by volume remained multi-discipline Service Engineers (mechanical and electrical) and an acute shortage across all regions for CNC programmers, Welders and more niche but growing roles such as Hardware/Electronic design engineers.
This article comes from our latest Manufacturing & Engineering Survey Report, now in its eighth year, is a go-to report when it comes to understanding the sector, its opportunities and challenges. We benchmark SMEs across the UK to paint a national picture of the Manufacturing and Engineering sector.
Click here to read a copy of the full report.