The UK manufacturing sector has enjoyed steady growth in recent months, but new research suggests the industry isn’t completely out of the woods yet. In fact, the sector experienced its worst performance for nearly three years in February.
According to the latest Markit and Chartered Institute of Purchasing and Supply Purchasing Managers’ Index, manufacturing activity dropped to 50.8 last month. While the figure was above the neutral 50 benchmark that separates expansion from contraction, growth in the industry was anaemic.
One of the biggest areas of concern is employment, with job losses occurring in the labour market for the second consecutive month. This trend was also evident in a new EEF – The Manufacturers’ Organisation study, which revealed the ongoing struggles that businesses face when trying to identify and attract talented staff.
The ‘An Up-Skill Battle’ report highlighted various challenges, including a lack of applicants for positions, insufficient experience among candidates and people not accepting roles that businesses offer them. The most prominent problem, which 67 per cent of respondents cited, was a dearth of technical skills among interested applicants.
UK skills shortages
Manufacturing is not the only industry in the UK suffering a skills crisis. Recent data from the Recruitment and Employment Confederation (REC) found that 81 per cent of businesses intend to take on more staff over the next few months.
However, hiring intentions among smaller organisations appears to be on the decline. Sixty-two per cent of microbusinesses – those with one to ten employees – were looking to recruit in February; down from 74 per cent the previous month.
“Competition for talented candidates remains fierce especially where skills shortages are already entrenched, such as in technology, teaching and nursing,” REC chief executive Kevin Green said.
“Engineering is a particular area of concern – the government announced new major infrastructure projects in last week’s Budget, but there are question marks over how increased demand for skilled workers will be met when supply is already a problem.”
The EEF study echoed these trends, with 73 per cent of manufacturers claiming they found engineering roles difficult to fill. Many organisations are even headhunting from other firms within their own supply chain to find the skills they need to survive and thrive.
Building a talent pipeline
Manufacturers are exploring a number of avenues to overcome the skills shortages within their organisations. EEF statistics showed 84 per cent are offering competitive remuneration packages to entice and retain the best staff, while 43 per cent provide flexible working arrangements.
Roughly half of companies are giving their employees the opportunity to work in other areas of the business to maintain their interest and expand skillsets. Meanwhile, 79 per cent of employers aim to hire a manufacturing or engineering apprentice at some point over the next 12 months.
Nevertheless, the EEF has urged the government to offer more support to the industry over the short, medium and long term. The organisation suggested scrapping immigration skills charges and preventing further recruitment costs, while increasing investment in education and training for STEM professions.
Whatever the future has in store for manufacturing, the sector appears to be rising to the opportunities and challenges that current growth is producing. With the right people and skills at their disposal, SMEs within the industry could be heading for a successful year in 2016.
