In this article, David Atkinson, UK Head of Manufacturing SME & Mid Corporates, Lloyds Bank, considers the causes and potential solutions to the manufacturing sector’s recruitment struggles.
Recruiting and retaining the right talent continues to be one of the biggest challenges facing UK manufacturers.
An aging workforce has been an issue for some time, exacerbated by the sector’s image problem; dirty, old fashioned and not green.
But there’s no doubt that the search for skills has been made harder by the sector’s ongoing digitisation, which requires a new kind of IT expertise that’s also in demand across the broader economy.
During the pandemic working practices changed dramatically, bringing new expectations of flexible working which are difficult to accommodate on the factory floor.
And in a triple whammy, the ongoing cost-of-living crisis is constraining manufacturers’ cash flow at a time when competition for top talent is pushing up wage growth to record levels.
According to Make UK, more than a third (36%) of manufacturing vacancies are currently proving hard-to-fill because companies can’t find applicants with the right skills, qualifications or experience.
Without action, the issue will only get more pronounced in the coming years – with six in ten (59%) manufacturers citing automation as a trend that is changing jobs and skills needs for their business.
The government did attempt to address the issue in its UK Science and Technology Framework, which received a mixed response when it was published in March.
However, it’s short on hard targets or mandates, instead talking more generally about creating “an agile and responsive skills system, which delivers the skills needed to support a world-class workforce in STEM sectors and drive economic growth” by 2030.
Driving diversity
But I’m heartened by the efforts I see manufacturers making to broaden their appeal.
Despite the sector paying on average 12% higher wages than the national average, more needs to be done by manufacturers to broaden their appeal. This is an opportunity they must embrace.
ONS data shows that women make up just 29% of the manufacturing workforce, while just 18% are from ethnic minorities.
And the average age of workers in the sector is 52, compared with an average age of 42 for workers in the wider UK economy.
While experienced colleagues are obviously a fantastic asset for any manufacturer, it’s a concern that they are not being supported by new entrants to the industry.
In response, firms are focused on young, diverse talent with a prioritisation of ‘will over skill.’
That means choosing attitude over experience, because where there is a shortage of skills, staff with the right approach to work can be supported through training to learn the skills they need.
Apprenticeships are a great example of this strategy in action.
I think most manufacturers have some experience of apprenticeships and it’s a well understood route into the industry.
As such, more than half of manufacturers plan to recruit at least one apprentice in the next 12 months and have ramped up investment in training over the last two years, with around three in five apprentices coming into manufacturing firms aged between 16 and 18.
The apprentice opportunity
These Gen Z digital natives are well-placed to adapt to the emerging technologies like automation and Artificial Intelligence that will help drive the future of manufacturing.
And their values are commonly well aligned with the industry’s green agenda and the push to Net Zero.
The upward promotion of existing colleagues by bringing in apprentices helps contribute to employee retention and loyalty too, as staff see their employer giving them progression opportunities while supporting young talent.
This also helps reduce pressure on salary inflation in comparison to recruiting from the open market, which can tend to be more costly than making internal promotions.
And Lloyds Bank is a major supporter of manufacturing apprenticeships, not least through our support for MTC Training, part of the Manufacturing Technology Centre in Coventry, which works to deliver crucial skills to the sector and improve manufacturers’ productivity and innovation.
We’ve sponsored the centre to the tune of £1m a year since 2015 and we intend to support the training and upskilling of more than 5,000 graduates, engineers and apprentices, having just extended the deal until 2029.
There’s no doubt that the manufacturing workforce of tomorrow will be very different from the past, with a very different set of skills needed.
Industry, education and government, working together to inspire a new generation of engineering talent to choose manufacturing, will be fundamental to the sector’s long-term success.
Find out more about Lloyds Bank’s support for manufacturing apprentices here.
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Lloyds Bank plc. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.
About the author
David Atkinson is a Regional Director for SME & Mid Corporates Commercial with 35 years’ experience in the banking industry. Get in touch with Dave by email.
