Skills shortages threaten to undermine digital revolution say manufacturers
MANUFACTURERS’ plans to drive productivity improvements and capitalise on Industry 4.0 – the digital industrial revolution – could be derailed because the UK is struggling to provide the right quantity and quality of skills to meet the sector’s needs.
And with demand for skills set to rocket, the situation is about to spiral further, EEF, the manufacturers’ organisation, has warned.
The organisation found almost three quarters of manufacturers (73%) had found it difficult to recruit skilled workers in the last three years. They are challenged by both the quantity and quality of candidates, with firms regularly forced to contend with a lack of technical skills (67%), an insufficient number of applicants (64%) and a lack of relevant experience (61%).
At the same time, Government (UKCES) statistics show that the number of ‘hard-to-fill’ vacancies in manufacturing remain stubbornly high at 35% – unchanged from 2013 and worse than in 2011 when it was at 30%.
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The EEF said the situation was set to deteriorate even further as manufacturers expected a significant increase in their own demand for skilled workers over the next three years. Almost 60% expect to need more people management, leadership (59%) and production-related technical skills (59%) over the next three years alone.
Similar increases in demand for craft/technician (53%), sales and marketing (52%) and IT and software skills (47%) over the next three years show how manufacturers are looking to make strategic hires to drive forward their ambitious productivity and growth plans.
However, the organisation said this would place greater pressure on an already diminished skills pool, leaving almost three quarters of manufacturers (72%) concerned about accessing the skills their business will need in the next three years.
Firms are looking to overcome their skills challenges by offering a number of incentives to attract and retain highly-skilled employees. These include competitive salaries (84%), training (50%), opportunities to work in other areas of the business (49%) and flexible working (43%). Apprenticeships are also seen as a critically important way for firms to help close the skills divide over the longer-term. Almost eight in ten manufacturers (79%) plan to recruit manufacturing and engineering apprentices in the next 12 months.
Richard Halstead, Midlands and East Region Director at EEF, said: “Despite multiple warnings about the UK’s yawning skills gap, the dial hasn’t moved since 2012. Manufacturers continue to struggle to find the right people with the right skills – undoubtedly this has led to lost opportunities for employers, would-be employees and the UK economy.
“Had manufacturers not already been taking action we would arguably already be over the cliff-edge and not just approaching it. But this report contains a clear warning – we are just about treading water today and the struggle is only going to get harder. The demand for skills is going to soar in response to manufacturers’ productivity plans and their ambitions around Industry 4.0. Getting the right quantity and quality in place will be critical, which is why we are urging the Government to take firm action now.”
The report comes as optimism among firms in the financial services sector has fallen at its fastest rate since 2011.
According to the latest CBI/PwC Financial Services Survey, the banking and investment management sectors saw the sharpest deterioration in sentiment – while optimism among building societies and in the insurance sector was broadly flat.
Financial market instability, competition from within the sector and macroeconomic uncertainty were identified as the top three challenges facing financial services over the coming year.
Nevertheless, business volumes continued to expand at a solid pace, while profitability improved, albeit at the slowest pace for almost two years.
