Philip Whiteman, CEO of Sector Skills Council, Semta, gives his views on what the results from the recent CBI Industrial trends survey mean for the future of manufacturing in the UK.
The new CBI quarterly industrial trends survey reveals the recovery in the manufacturing sector is firmly in place: Output is rising, and 18% of manufacturing businesses have seen an increase in new orders (compared to 11 per cent in October 2010).
The sector has invested in training, maintaining skills and improving productivity during the recession and is reaping the benefits. However, as manufacturing growth continues, the impact of skills gaps is likely to increase: an increase in orders means extra work and businesses in the sector have reported plans to boost employment levels.
Only 19% of manufacturers plan to spend more on training and retraining. Whilst this is a rising number, which is good news, there is still more to be done in demonstrating to manufacturing companies that training is an investment rather than a cost. With orders expected to continue to rise, a focus on skills and training will be fundamental.
Making sure training delivers a return on investment means careful planning. Semta works closely with employers to understand both industry-wide and individual company development needs, creating training plans that will meet current and future business needs. We have a strong track record with an average 6:1 return on investment through our National Skills Academy for Manufacturing productivity programmes. We have supported 6,000 companies to start business focussed training. Our Compact agreement, which funds training priorities identified by our sector skills agreements, has created training plans with 2,000 companies.
With 30 to 40 % of employees in manufacturing over 45 years old, a key focus for business should be investing in their future workforce, ensuring there is a pipeline of talent. The recent government skills strategy announcement revealed available funds for 75,000 new apprenticeship places per year, this is good news for manufacturing, where new technical skills are crucial for growth and for filling skills gaps caused by retirements – currently only 15% of manufacturing employers offer apprenticeships.
Whilst Semta welcomes additional apprenticeship places, other aspects of the skills environment indicate significant government funding cuts and we anticipate radical changes to the skills landscape. Many government funding cuts are still to bite, so manufacturers need to avoid training for training’s sake, investing instead in training that produces bottom line returns. In doing so, employers will be well placed to continue the strong upward trends they have reported in the survey.