EEF’s fourth quarter survey confirms that the worst of the downturn is over, and manufacturers are recruiting for recovery and opportunity. But as Colin Chinery reports, the sector image is not asset rich.
Recession, re-structuring, redundancies; the three Rs rocking, rolling and reverberating through UK industry in a grueling 2009.
But there is a scent of recovery in the chill New Year air, as smart manufacturers have moved up to the starting blocks and are already recruiting staff. Engineering and technology businesses are expanding, reports a skills survey of 400 companies by the Institution of Engineering and Technology (IET).
And nearly two in three are citing growth as a spur for recruitment. But the spur is hitting tough hide.
According to another review — this from the CBI — two thirds are having difficulty in recruiting STEM skilled staff (Science, Technology, Engineering and Maths), with problems at graduate and postgraduate level hampering a third. Another high profile report warns that Government hopes of the manufacturing sector hoisting Britain out of recession will be thwarted unless almost 600,000 engineers, all with advanced skills to rival those in other developed economies, are recruited and trained over the next seven years.
Numbers and image
This annual health check on the industrial labour market from the Engineering and Technology Board pinpoints two parallel developments with major implications for UK manufacturing:
• The 30% decline in the number of lecturers teaching engineering, manufacturing and technology, and;
• The 17% drop in the number of higher education students going into production and manufacturing degrees this year.
Villain-in-Chief? That hoary intractable spectre stalking modern British manufacturing — negative, out-dated perceptions of its real character, achievements and career opportunities. As Business minister Ian Lucas observed at the Manufacturing Technology Centre in Coventry, many graduates and school leavers do not view the manufacturing sector as an exciting place to work; “To say it comes low on their list of career choices would be putting it lightly,” he said.
Here, for example, are the responses from 1300 14 to 19 year olds interviewed for the ‘Engineering Our Future’ report:
• Engineering is viewed as a “dirty and menial” subject to study at university.
• Engineering as a subject is suited to less academic students.
• Parents and teachers view engineers as “blue collar men in overalls who fix things”.
In modern Britain it seems, we disparage engineers and venerate ‘celebs.’ As such, “There is still a major need to change the image and profile of engineering, and to improve education and in-school activities,” warns Robin McGill, chief executive of the Institution of Engineering and Technology. Similarly, “The fact is that manufacturing struggles to get people interested,” says Phillip Hodson, director at awardwinning Kensington Consulting of Chorley, Lancs, a leading executive recruitment company specialising in manufacturing and engineering.
Hodson, with a manufacturing background including Caterpillar and Perkins Engines, says that while modern manufacturing areas such as Lean and Six Sigma have had a significant exposure, these have not been communicated sufficiently to universities, colleges and sixth forms. “We have to get talented young people interested, but there is still this inability to sell the exciting and stimulating aspects of manufacturing to academia.” “So we have this void, and it comes back to manufacturing’s need to get engaged with young people. Regrettably too many of them see manufacturing as mass production, mundane and so on, and we all know this is simply not the case.”
Hodson notes that retirement will mean the exit over the next ten years of large numbers of highly qualified and experienced. “This will leave a big gap in the manufacturing sector. There are simply not enough young engineers and young professionals coming in to match the rate of the departing retirees.” There are no such worries for e2v of Chelmsford and Lincoln, a leader in the design and supply of specialised components and sub-systems for the global medical, science, aerospace, defence and commercial and industrial markets. “This is not an issue now or in waiting,” says Andy Bennett, group marketing and communications manager. “Since the skilled are retiring all the time, we have to deal with it as an ongoing process — which is why we continue to invest in apprenticeships as well as working closely with universities.” Manufacturing has taken its share of blows, notes Bennett, whether fighting the attractiveness of a career in the City — which itself has lost much of its shine — or facing the effects of the global recession. Even so, it is imperative to recruit for specific skills and attract the best candidates. “Manufacturing must also look to the medium to long term, post recession, and continue to look to promote the high tech career aspects as well as the business, HR and finance disciplines,” he says.
“At e2v, for example, we have our work on projects like the Hubble space telescope to inspire new engineers, and there are many other exciting projects out there across the manufacturing community.” People approach work in this age in a very different way from the past, says Phillip Hodson. “It’s become more assignment based; they want to experience this project, move on to that project rather than saying ‘I want to achieve this position in this company’.”
The art of selling yourself
Kensington Consulting were 2009 finalists for five national recruiter awards and winners of two — ‘Best Understanding of Candidates Needs’ getting a top placing. Tellingly, says Hodson, “I interview design engineers and managers on a day by day basis, and in general design people struggle to sell their skills.
It isn’t the same with supply chain people, who have caught on to the fact that they need to sell their skills, especially from a commercial or purchasing function.” “But when I interview senior candidates in engineering and ask what they’ve achieved over the past 12 months, their answers are not usually well prepared. Talk them through, however, and it becomes clear that they are improving quality, innovating product, driving cost, satisfying customer needs.
But most times they don’t bring these attributes and achievements out in an interview.” “They can struggle to communicate their major assets and fail to make the link between what they do on a day to day basis to the operational objectives of the business. So we give a lot of guidance and advice to engineers on how they can best sell their attributes and skills to the fore at an interview.” But a manufacturing organisation needs finance HR and business experts as well as engineers, and e2v does not expect to recruit engineers with the full technical skill sets for its business, says Brian McAllister, e2v’s general manager of imaging.
Colleges and higher education
“It just doesn’t happen like that most of the time,” he says. “We find a much greater success from involving ourselves with schools and universities, getting to know potential new employees and helping them to understand what we can offer as a career as they start out in the employment world.” “Our strategy is to attract the world’s best people, whatever stage they are in their career. In my area of the business we target physics graduates and have created a talent pool. These graduates then flow into other areas and functions within the company. It is rocket science, and we do employ rocket scientists. For example, we have launched the e2v centre for electronic imaging in collaboration with the Open University, where we work closely with a dedicated research team.” “We are also collaborating with STEM Team Essex, involving some 20 ambassadors working with schools.
In fact, there is a whole series of schools projects including support for technology competitions and organisations such as Young enterprise, as well as visits to local schools to attract young people.”
What this is achieving?
Two distinct benefits, says McAllister. “Firstly, we have a research centre directly within the academic community, and secondly it gives us a pool of potential employees with relevant skills. By the time they complete research programmes they know us and we know them, so if we both decide that the match is right then we are set for a great future.” Systematic planning is essential for recruiting success. From identifying the skill requirements to assessing personality fit — it requires understanding and awareness of organisation, objectives and the world outside the business. Recruitment falls into two categories; impulse and planned. Impulse recruiting is reactive; posting on a job board, for example, generates a large number of candidates in a short time and is often a quick fix solution.
But while this can work, it is not the most effective or efficient approach. Time and resource are needed to sift through the applicants and the chances of missing the ‘golden nuggets’ are high.
‘Our greatest asset’?
It’s a commonplace for a company to say that its people are its greatest asset, but there’s not enough due diligence on this point, notes Hodson. But it can seem to be the biggest cliché since ‘the cheque is in the post.’ “We find within the manufacturing sector that a lot of companies do not look upon recruitment from a capital expenditure perspective,” he says. “In 2009, there has been a heavy cost focus which I appreciate.
But recruitment is not just about cost, it’s also about value. Manufacturers do not always detail their needs and go into the market place aware of their specific needs; what will be the inputs, the challenges, how will the role interact with different departments?” “Let’s say the role is £40,000 a year. Over a five year time frame your investment at a bare minimum is £200,000. If you were investing in a piece of machinery costing the same amount over the same lifetime, you would ensure you were specifying its needs and working with the right supplier and challenging them on their ability to provide that product. Unfortunately, when it comes to recruiting there are manufacturers who view it as a simple process and go out to get the cheapest. And they get what they pay for.”
The retention issue
Recruiting is one challenge; retention is another, and there are reports of increasing numbers of companies hiring entire teams of employees from competitors.
In boom periods, the strategy might have been the acquisition of the competing business. But with credit tight, the predator employer may attempt to poach a profitable team and secure a book of business without the associated costs of acquisition.
To counter this, employment lawyers are being asked how best to minimise the risk. Yet many companies continue to rely on standard employment contracts, paying negligible attention to how an employee will fit in to the organisation. “As well as attracting the world best people, we need to retain them,” says e2v’s Brian McAllister.
“This is done by keeping people engaged with challenging work. We have many people who have worked in the business for more than 30 years. Ask them why, and the answer is always the same. ‘There’s always interesting work to do’.” A parallel development is a new focus on ‘inplacement’, as organisations going through major restructure put just as much effort into re-recruiting key people as they do into helping those leaving the organisation find new employment.
Set your objectives
The issue for companies and employees is that they can start off on the wrong foot, says Phillip Hodson. “Setting clear and shared objectives with both parties buying in and relating them to the strategic objectives of the company is critical. And there should be regular but not too frequent appraisals, along with SMART objectives setting, succession planning and salary surveys. All of which can reduce the risk of people leaving.” “You can’t have a company full of Napoleons, but you need to have a succession plan right throughout the organisation to ensure there are promotion opportunities for those consistently achieving their objectives.” An effective philosophy for recruitment is to try and make the process as standardised and as transparent as possible, says Andrew McConnell, senior solicitor in the Employment team at corporate and commercial law practice, Brodies LLP. And this is particularly important for manufacturing where the battle for talent can be intense.
“The recruitment process as a whole — including job specifications, scoring matrices, make up of the interview panel, and so on — should be clear to both those recruiting and being recruited so as to ensure both parties are fully aware of the requirements of the job, how they will be measured against those requirements and who will be reaching a decision on those points. This clarity will help avoid losing skilled employees shortly after they have joined because the scope or content of the role has been pitched at too high or low a level, for example.“
With fewer jobs around, there is anecdotal evidence of recruitment decisions being challenged, with the serving of discrimination questionnaires by candidates on the increase, says McConnell. “A process which is well defined and transparent is more likely to satisfy an unsuccessful claimant that the process was fair and therefore less likely to lead to challenge. Even an unsuccessful challenge can soak up hours of management time and legal costs.” “High achieving organisations know that employee retention and talent management are essential to sustaining growth in an ever more challenging marketplace. Open communication made timely and with content which is transparent is an important tool in encouraging retention and maintaining engagement.
If an employee knows why a decision has been made — whether it’s to do with promotion, change in terms and conditions of employment or otherwise — he is often more likely to understand it. And timely communication avoids employees ‘filling the void’ with incorrect assumptions about what, when and why.” McConnell says it’s important too for management to understand that ‘survivors’ of a redundancy exercise can feel vulnerable and stressed, and therefore effective and meaningful communication continues to be critical following a restructure. “If the organisation behaves in a way which demonstrates awareness of these priorities then that can be a key factor in encouraging engagement and loyalty during these difficult times.”
Back to school
“We’ve continually failed to compete adequately in the graduate recruitment and skilled workers job pool,” says Nick Brayshaw, recently retired chairman of the CBI national manufacturing council.
“Excluding some of our exemplar manufacturers such as BAE Systems and Rolls-Royce who would be able to recruit the best, the general manufacturing community has not done well in that market place.
The largest recruiter of engineering graduates is the accountancy profession, great for the overall economy perhaps but leakage for the manufacturing sector.” Andy Bennett agrees. “There’s a need for industry and academia to reach out for each other rather than wait for the knock on the door. It’s easy to lose focus on this in the middle of a recession, but it has to remain high on the agenda,” he says.
“We have a range of activities with schools, colleges and universities and there’s an obvious benefit in identifying candidates for future employment. But it also adds to job satisfaction for our people, being able to go into schools and tell pupils about their work and opportunities for apprenticeships etc.” Make sure there is enough due diligence when specifying the role and where it sits in the organisation, says Phillip Hodson. “One question we always ask is ‘how are you going to measure the success of this role? What are you looking to achieve?’ This is a key question and many times there is a big pause, a hesitation, and not many answers.”
The head of manufacturing, transport and logistics at Barclays Commercial Bank, Graeme Allinson, believes that the recently-formed Manufacturing Insight has a major role in improving public — and in particular young peoples — perception of manufacturing.
Part-funded by the Department for Business, Innovation and Skills and EEF, a particular focus will be a campaign in schools designed to generate enthusiasm for students to pursue careers in manufacturing. “It is essential that we change the image of manufacturing and raise awareness of the exciting careers that are available,” says MI’s director, Nick Hussey, non-executive director of SayOne Media — publisher of The Manufacturer.
Certain companies are doing a lot, but it takes an awful long time to change people’s perceptions and what’s been in their minds for the last 30 years, says Graeme Allinson. “We have to recognise that it’s going to be a long time before we can see a real change in people’s views. British manufacturing has moved on massively since the 1980s. What we have to keep doing is to extend into some of the smaller companies all the good work that’s done by the larger companies, and support Manufacturing Insight initiatives that are coming out, promoting the reality of British manufacturing — as a great career and a great place to work.”