Manufacturers competing with top City banks and digital innovators to grab shrinking pool of technically skilled employees

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Government must create an Employer Training Fund to upskill existing workers and introduce apprentice incentives to train all age groups in the most sought-after skills – Make UK/Sage analysis

  • 95,000 current manufacturing vacancies costing the British economy £7.7 billion a year – a £21million daily loss to UK GDP
  • 50% of manufacturers say they cannot source the talent their business needs locally 
  • And 62% reported the will not find it easy to ensure their businesses have the skills they need to power ahead to 2030
  • Automation, digitalisation and environmental sustainability came out top of companies’ priority lists
  • 58% of manufacturers plan to recruit engineering technicians and 61% are prioritising production and process engineers between now and 2030
  • Automation is changing business focus – with over a quarter (27%) of companies saying they need data analysts and 11% plan to recruit data scientists
  • Almost three-quarters (74%) of businesses expect demand for cognitive and metacognitive skills like critical thinking, creative thinking and learning to learn to increase with the transition to a green and digital future across manufacturing gathers pace

British manufacturing companies are now having to compete with top City banks and leading innovation companies to secure employees with the relevant digital and technical skills needed to drive automation through traditional businesses. The move towards digitalisation of production processes has accelerated in recent months, leaving companies desperate to recruit the very best qualified technical engineers and data experts to ensure new automation is as successful as possible.

New research, 2030 Skills: Closing the Gap, published today by Make UK, the manufacturers’ organisation and Sage, leader in SME accounting, financial, HR and payroll technology, reveals that 58% of companies said they have plans to recruit engineering technicians while 61% want to recruit production and process engineers. This is a dramatic shift from previous industry analysis as we see a stronger focus on the essential use of data, which requires input from employees trained in the very latest digital technologies, data investigation and implementation. More than a quarter of companies (27%) now say they need to recruit data analysts and 11% plan to employ data scientists, seen as necessary to make the desired automation changes to drive their businesses forwards.

Crucially, manufacturers already find themselves competing with other sectors for this skilled talent across the board and will continue to do so in the coming years. Many of these roles are in demand across the economy, and the fight for talent is set to intensify in the critical development years leading up to 2030 with sustainability and automation at the heart of most companies’ strategic planning.

Half of manufacturers surveyed say they cannot source the talent their business needs locally and some 62% reported the will not find it easy to ensure their businesses have the skills they need to power ahead to 2030. 

Stephen Phipson, CEO of Make UK, the manufacturers’ organisation said: 

“To address the issue of labour shortages which is now at critical point, Government must ensure that the revised Shortage Occupation List is in place as soon as possible to plug the huge skills gap in data and digital technicians which are simply not available to employers from the domestic labour force.

“Government should also look to urgently create an Employer Training Fund, funded by a portion of unspent Apprenticeship Levy funds, to support the upskilling and retraining of existing employees in critical skills as well as providing support to bring through the next generation of talent through routes such as T Levels for manufacturers to train up straight from school.  This would also be the time to introduce apprenticeship incentives for areas of skills shortages, where targeted incentive payments are made available for apprenticeship courses (standards) in those skills areas where supply is most scarce.”

Paul Struthers, MD, UKI, Sage said: 

“UK manufacturers are going through a period of transformation adapting their traditional operations and adopting new technologies to be more digitally enabled, remain competitive and reduce costs.

“This evolution has created a need for more specialist, digital skills, required to maximise the benefits of technology. With labour shortages on the rise, urgent reform of the Apprenticeship Levy is required so that manufacturers can access and nurture the talent they need to remain successful and continue to grow. “   

The introduction of a Training Investment Allowance would further boost skills creation with a tax rebate on investment in training for manufacturers upskilling existing employees. This reflects manufacturers’ desire to access tax relief on investment in training which in ways which are easy to understand and implement quickly.

Half of manufacturers said offering flexible working helps them to recruit and retain workers and 90% of businesses said they were able to offer flexi arrangements to non-production staff. However, over a quarter said they had to stick to rigid shift patters for their production staff.

Digital skills were paramount in keeping Britain’s manufacturers open for business and enabling the switch in production to vital PPE equipment and ventilators for the NHS during the pandemic, this acceleration must be supported to continue at pace to promote continued growth as the sector fights its way through the current global economic challenges. 

Read the full report here:  https://www.makeuk.org/home/insights/reports/2022/09/22/2030-skills-closing-the-gap

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