With the manufacturing sector facing its biggest worker shortage in 30 years, a group of Made Members gathered to share their strategies for rebuilding the skills pipeline.
There are currently 95,000 vacancies in UK manufacturing, according to a recent report. This costs the UK economy a staggering £21m a day in lost GDP.
Attracting new talent into the sector has long been a challenge but today’s record shortages are being driven by:
- A relentlessly tight labour market, especially in certain regions
- It is much harder now to attract workers from overseas
- A lack of incentives for young people to join the sector
Furthermore, industrial workplaces and the very nature of what it means to make something are undergoing a paradigm shift as a result of progress towards:
- Sustainable Manufacturing
- Automated Manufacturing
- Digital Manufacturing
- Flexible / Remote Working
As a result of these changes, the manufacturing worker of today and tomorrow must be tech-savvy and possess a broader range of technical (hard) and personal (soft) skills. They must be capable of working on increasingly more complex and multifaceted projects and readily embrace continuous learning.
The latest Made Masterminds roundtable brought together a dozen business leaders from industry and academia to discuss how such a workforce can be created, and sooner rather than later.
The discussion was held at Made patron Birmingham City University’s STEAMhouse hub, a state-of-the-art redevelopment of the former headquarters of the Eccles Rubber and Cycle Company. The building provides everything from office space and prototyping workshops to training facilities and community networking events.
From the discussion, it’s clear that the pandemic has intensified the skills shortage and driven both flexible working arrangements and greater adoption of digital / virtual tools.
There was also united concern over the steady decline in apprenticeship starts over the past five years. Entry-level apprenticeship starts in England have fallen by 72% since 2014/15, with under-19s now making up just 11% of apprentices – half of what they did five years ago. [Figures from the London Progression Collaboration – an initiative to boost apprenticeship starts in the capital]
As a result, manufacturers are placing far greater emphasis on training and upskilling or reskilling their existing workforce. There are also growing calls for greater and more coordinated engagement from government, schools, training providers and employers to make working in the sector more attractive to young people.
This starts with ensuring all stakeholders, young people, parents, teachers and ministers, understand what a career in modern manufacturing entails, the opportunities it provides and how engineering underpins everything we do and use – something even those directly employed in the sector can overlook.
How has technology impacted your skills strategy?
Proceedings began with a discussion of how the growing importance of digital tools and data analysis has upended the traditional skills sought by employers.
The UK MD of a global manufacturer and distributor of machine tools noted how digitalisation requires his business to employ a “completely different set of people” to what it’s traditionally been looking for.” This has changed not just who they recruit but how.
“We now need people competent in systems integration, networking and programming rather than metal workers, fitters and assemblers. That’s really challenging us because those people are much more mobile, meaning we’ve had to take our recruitment activity nationally to find and attract those skills. That approach has been more expensive as our region is a relatively cheap labour area; when you start looking broader, salary expectations are much higher.”
He went on to note that digitalisation hasn’t just affected one area of the business, but has touched every department, function and role; “It has changed the whole landscape of employment and how we employ.”
This far-reaching transformation has dramatically altered how a well-respected precision stamping manufacturer approaches staff training and upskilling.
“Previously, we had an internal training roadmap built on PowerPoint and delivered by ourselves to all our staff on a rotating basis. That’s now gone,” explained the CEO. “Today, we have an online portal and in a similar amount of time, we can deliver five times as much learning in a very structured yet flexible way.”
Online portals and virtual collaboration tools have also led to a sharp rise in requests for remote and flexible working. For some businesses, like the company behind an innovative high-speed electric motor, the change has been positive.
“We’re totally flexible now. In fact, we’ve got too many staff for everyone to be onsite at once,” its CEO commented. “Typically, staff are onsite for three days and work remotely for two. We’ve found that offering such flexibility has proven helpful in terms of recruitment.”
Other businesses, especially those with a higher share of production floor workers, have found the shift to be less favourable.
“We need people to be onsite every day. When someone weighs up which employer to work for, factoring in the cost and time of commuting, we’re losing strong candidates because we can't offer flexible working,” said the HR Manager at an electrical control and instrumentation systems manufacturer.
Despite the hype surrounding digitalisation, automation and Industry 4.0, the Masterminds unanimously agreed that the hands-on, practical skills of engineering needed to remain a core focus.
How can we better promote manufacturing as an attractive career pathway?
Upskilling and training existing staff are vital in a fast-moving industry such as manufacturing. However, with many businesses having an ageing workforce, there is a pressing need to attract fresh new talent to the sector. Historically, one of the main methods of doing that was through apprentices.
Unfortunately, apprenticeship numbers are “very much going in the wrong direction,” noted the Strategic Director at a leading multi-disciplinary engineering firm. “We need another 300 hands-on engineers over the next three years and they're not there. We have an extensive and established apprenticeship programme, so we’re doing our bit but we need more businesses to follow suit.”
As is often the case, those present aren’t the ones who need to hear such messages. Being a Mastermind shows that each attendee and the organisations they represent are actively working to address the skills shortage. The challenge lies in encouraging disengaged businesses to change their mindset, noted the MD of a leading provider of engineering apprenticeships.
We've reached a tipping point now that requires every employer to step up and engage with schools,” noted one HR Manager.
“We need to make that connection between education and real work. That means engineers standing at the front of classrooms, attending careers fairs, speaking with teachers and parents and generally making people aware of our businesses.
“Take my company, we employ 150,000 people globally,” she continued. “We’re a large organisation that offers global opportunities, but outside of automotive, not many have heard of us. We’ve got to better market ourselves as good employers because, ultimately, that is what’s going to feed the pipeline for both existing and future talent.”
There is also an onus on education providers to organise outreach activities, as well as better promote those already happening.
The Greater Birmingham & Solihull Institute of Technology, for example, of which the University of Birmingham is a partner, aims to transform STEM education by addressing specific technical skills gaps. Yet, more needs to be done to make local businesses aware of such initiatives and how they can be involved.
Collaboration between education and industry is vital, noted the Director of Business Services at a Birmingham-based vocational college. “We’ve got quite a high number of construction employers co-hosting events with us to promote careers in the industry and progression opportunities to students, parents and teachers. We’d be very happy to replicate that with engineering employers.”
Will T levels help or hinder?
Raising the number of businesses opening their doors to young people is even more vital with the arrival of T levels – two-year alternative qualifications to A levels for students aged 16 to 19.
The first T levels were introduced in September 2020 and almost two dozen will be available by September 2023. The three engineering and manufacturing T levels – covering Design, Maintenance and Process Control – were available from September 2022.
T levels are intended to bridge the gap between what’s taught in classrooms and the realities of work by including a minimum 45-day industry placement. This could help reduce a source of friction between schools and industry – duration of placement. Schools frequently only want students gone for a few days, whereas businesses want meaningful work experience built up over much longer.
Yet, herein lies the major challenge T levels face. It is estimated that the engineering and manufacturing T level route will require 43,500 placements by 2024/25. Yet, just 9% of eligible businesses currently host a placement and 12% plan to in the coming year.
Reinstating the £1,000 financial incentive per industry placement for employers could help increase take-up, states a recent report, with 60% of SMEs saying this was the top action the government could take to enable them to offer placements.
“I’ve got more offers for construction placements than I’ve got students to fill them. Engineering is the complete opposite,” said one education provider. “I’ve currently got one placement out of 20 needed for our cohort of electrical engineer T level students.
“If your business can accommodate one or two engineering placements, please reach out to your local colleges and training providers. They’ll likely bite your hand off.”
Again, it was highlighted that despite being introduced three years ago, people’s awareness of T levels is still low. The report also highlighted that 28% of employers don’t fully understand what they involve and the same amount hadn’t heard of them at all. There is a clear need for a national campaign by the government to raise awareness of what T levels are and what they entail.
What are organisations doing to help build the future skills pipeline?
CEO of a precision stamping manufacturer: “We were part of National Manufacturing Day 2022, but we decided to offer a paid work placement for that week and beyond. We took in four young people for four weeks; at the end of which, two chose to take up an engineering apprenticeship.
“As businesses, we’ve got to put our money where our mouth is, get young people in during the holidays whether it’s a week, a month or two and put some money in their pocket. Even those who don’t go on do an apprenticeship or study engineering at university, which is absolutely fine, will have had the opportunity to see what it means to make something.”
Head of Employee Engagement: “For the past four summers, our college has hosted a three-week engineering academy during the summer holiday. Next year, we also intend to introduce a fabrication and welding academy, as well.
“We recruit a cohort of 16-year-olds who are all thinking about going into engineering. we give them all uniforms and PPE and we give them an introduction to hand tools, machining, drawing and fabricating.
“On the last day, we invite local employers in to meet them and every single one of them is hired. Offering a positive, practical opportunity to make something is a great way to create and nurture that spark of interest in engineering from young people.”
HR Manager of an automotive parts supplier: “We’re looking to introduce a ‘Bring Your Child to Work Day’ to help showcase what engineering is and help our workers feel proud of what they do and where they work. We’re also exploring how that could be opened up to the wider community.”
With his older workers looking to reduce their working hours post-Covid, the MD of one business decided to implement a semi-regular training day on a Friday. During the session, young workers and experienced staff choose what skills they want to share and gain.
Not only has it built greater employee engagement and camaraderie but staff look forward to being onsite that day because it’s seen as a skills day’ rather than a work day. It’s proven to be a simple but effective change that has helped boost staff retention and recruitment.