Training spending in manufacturing is lower than average

Posted on 22 May 2013

Toby Peyton-Jones, UKCES commissioner and director of HR at Siemens UK, blogs on the future skills needs of manufacturing.

This article was first published at – Striving for success in the manufacturing sector

WorldSkills, DMGG/MORI Seiki
Alex Elton of DMG/MORI Seiki at WorldSkills 2013

“UK manufacturing is fighting back. With growing interest in high-tech components and intellectual property the UK has much to offer on the global circuit.

“But making the most of the opportunities coming up will only happen if firms have the right people with the right skills. With the government’s spending review around the corner, it’s a good time for the sector to examine how it can build on its strengths.

“Today, manufacturing accounts for over half of all UK exports. Having consolidated its position, it is now one of the most productive sectors in the UK economy. Investment in innovation and technology has also risen, with 75% of UK R&D being spent on manufacturing. It’s clear that the sector is hungry for a win at an international level.

“So-called STEM skills – science, technology, engineering and mathematics – are the lifeblood of the sector. But they’re also in high demand in other areas of the economy, including high-pay sectors like banking and accountancy. Figures show that 40% of STEM graduates go into non-STEM roles (UKCES report from Dec 2011).

“With this shortage so well-documented, it is surprising that a significant number of engineering and manufacturing firms are less likely than average to spend time and money developing the skills of their staff – one of the pre-requisites of a good job as far as I’m concerned.

“Findings from the UK Commission for Employment and Skills, where I am a commissioner, show that training expenditure in the sector is lower than average. And while many employers do train their staff, this only reaches a minority of the workforce. In part, this is due to the need for highly specialised skills, which take time and resources to develop. But I also wonder if other, cultural, factors are at play here.

“As director of HR at Siemens plc, I know that a mix of skills is required to achieve effective business performance. Many engineering companies have strong graduate programmes, but what about non-graduates? This is where apprenticeships and their new siblings, traineeships, can help, as new entrants are able to learn and apply technical skills on the job.

Employment projections show that skilled trades and operatives will be in demand to replace those leaving or retiring from the sector. It is therefore more essential than ever that businesses invest in their apprenticeship talent pipeline and build in traineeships that give young school leavers a step ladder and the aspiration to take up a career in manufacturing and engineering.

manufacturing workforce data
In the future UK manufacturing will need for more machine & plant operatives and skilled trades, and fewer managers and directors

“Small firms also have specific challenges when it comes to keeping up the pace. For many of them, thinking strategically is difficult when survival is what matters and costs are rising. Although engineering is traditionally a fiercely competitive sector, collaboration with other small firms might prove to be a lifeline here. Collaboration can help businesses gain bigger contracts, invest in equipment and provide essential bespoke training for staff.

The Employer Ownership of Skills initiative (EOS) is a useful way for employers to work with others in their area, locality or supply chain to get the skills their business needs for growth. At present, UKCES has invested some £90 million in employer-led programmes designed to boost growth through people.

“But although this has shown that there is an appetite from employers to take ownership of their skills needs, competitive funds like this are always changing and so I see that EOS is just a stepping stone to a more long term sustainable solution. That’s why I’m backing the recommendation made by Doug Richard in his recent review of apprenticeships, that the government’s apprenticeships funding should be routed through employers in the form of tax or NI breaks and that is why I am also so pleased to see in round 2 of the EOS so many employer-led industrial partnerships emerging.

“In essence, it is clear that the sector has made considerable changes already, and is moving up the leader board. But to keep winning consistently, firms will need to work together, and seek out any promising opportunities in next month’s spending review. Investing in skills, apprenticeships and collaboration will ultimately ensure that the sector doesn’t just fight for survival – it thrives too.”

Toby Peyton-Jones, Director of HR at Siemens UK

Reproduced with permission of manufacturer’s organisation, EEF