Understanding and addressing industry’s skills shortage

Jason Saunders – Regional Director at Michael Page Engineering & Manufacturing – explores the causes of the UK’s skills shortage and the solutions that need to be put into place to tackle the issue.

It’s well-known that the engineering and manufacturing (E&M) industry in the UK is facing a significant skills shortage.

Jason Saunders, Regional Director, Michael Page Engineering & Manufacturing.
Jason Saunders, Regional Director, Michael Page Engineering & Manufacturing.

With engineers playing a crucial role in Britain’s productivity and economic development, this skills shortage is a serious cause for concern.

The resultant ‘talent war’ is becoming a major obstacle for both recruiters and employers in the E&M industry.

The root cause

Through to the latter stages of the economic downturn, there was a severe lack of investment in production, engineering and technical roles including quality and design.

Once business started to improve and more capital was released post-recession there was greater demand on production enhancement, innovation and efficiency.

As a result, the jobs market has been recovering from the bottom upwards and we’ve been seeing large-scale demand across E&M within the past 18 months.

Unsurprisingly, everyone is demanding the best talent. The E&M industry doesn’t have enough technical staff to fill niche roles and companies are fighting over the very few high calibre candidates available.

In the UK alone, we’re currently looking to recruit 87,000 engineers a year. Businesses, who previously chose to outsource work to Asia due to cost advantages, are now concerned about quality and want to invest in efficient, high quality staff.

Many companies are now focusing on staff retention as candidates are calling the shots. This power shift has caused salaries to be driven up by 5–10% within the last year.

A year ago, we were experiencing candidate shortages to a salary benchmark of £35,000; this has now extended up to £45,000.

To compare your salary to the regional average, visit the Michael Page Salary Comparison Tool.

The average salary of an engineer in the UK is currently £38,575 and an engineering manager will earn an extra £11,000.

However, this varies by region with the South East showing the highest differential, netting up an extra £18,000, whereas the lowest differential is in the North East, with under £8,000.

How do we fix the problem?

According to EngineeringUK, engineering companies are projected to have 2.74m job openings from 2010–2020, in which 1.86m of these jobs will need engineering skills.

Finding skills is vital to growing a company
The UK produces just 46,000 engineering graduates each year and only 27,000 UK apprentices currently qualify at the appropriate level annually.

Currently, the UK produces just 46,000 engineering graduates each year and only 27,000 UK apprentices currently qualify at the appropriate level annually.

In order to bridge the skills gaps in the short-term, businesses need to seriously invest in talented young professionals who can be trained just as effectively through an apprenticeship programme, as they can through a graduate programme.

Businesses need to understand the needs of today’s candidates and recognise their intrinsic value to the company.

A legacy brand and a standard benefits package is no longer enough to keep today’s workforce happy. In a candidate driven market, businesses must build their brand as employer of choice and work hard to attract and retain the best talent.

We need to focus on multi-skilling existing workforce and introduce training and development programmes, as well as on the importance of flexibility, diversity, inclusion, rewards and recognition, to prevent staff from leaving for higher salaries.

Would you like to discover ways in which your businesses can gain higher productivity by focusing on their workforce needs?

The Manufacturer’s National Skills Conference – in partnership with The Manufacturing Technology Centre – will provide a forum to discuss the skills issue currently affecting all aspects of British manufacturing.

This inaugural event offers the opportunity to make changes throughout industry and wider partners, exploring best practice methods and innovative thinking to promote building capacity to drive business performance.

15 – 16 October, 2015 : Antsy Park, Coventry

For a long-term solution, companies need to address E&M’s major identity crisis and promote the industry as an exciting, creditable and diverse career choice, particularly for women.

We need to address the misconception of ‘the engineer’ as a man donning grubby overalls and harness the female talent pool.

There certainly needs to be more awareness in schools – educating students on what engineering is and what it involves, including what job opportunities are available and what your earning potential could be.

Creating and demonstrating a clear career path will be key to tempting young people into the industry.

There needs to be a clear responsibility across government, professional bodies, education and the wider engineering community to work together in addressing the skills gap and ensuring there are enough skilled people to meet demand.

This may take months, years, or decades even, but if the message is out there and being received, we’re one step closer.