Global trends over the last two decades have created huge competitive pressures as well as major opportunities for UK manufacturers. They have responded by moving their competitive offerings away from cost and towards innovation, new products and services.
Underpinning this transformation has been the ability of companies to move quickly to respond to changing market circumstances and to seize new opportunities.
A key factor in this speed of movement, and a traditionally important source of competitive advantage for UK businesses, is the UK’s labour market, which remains relatively flexible in comparison to some of our major competitors in the developed world. This flexibility allows companies to adopt a range of people and production strategies in order to respond quickly to changing demand. During the recession, for example, the flexibility in the UK’s labour market allowed many companies to take tough decisions, often in partnership with employees, which helped them to stay afloat and to prepare for future growth.
The UK’s flexible labour market is also an important factor when it comes to compensating for other areas of economic concern for manufacturers – both short-term and more structural – such as access to finance, skills shortages and weakness in supply chains.
However, over recent years many manufacturers have expressed concern that the UK’s flexible labour market, and consequently their wider scope to respond quickly to changing circumstances, has been steadily eroded. This report, based on a survey of our members that was undertaken in the spring of 2011, therefore looks at:
- why flexibility is important to manufacturers
- how they achieve it
- how manufacturers view the UK as a business environment to achieve this flexibility
- what needs to be done to ensure that the UK continues to provide the flexibility that manufacturers need
Key findings from the report
- Nine out of ten companies said they needed to be flexible in order to respond to their customer needs, whilst over half said they needed to switch between markets or have short order books
- The vast majority of companies use overtime and changes to shift patterns
- A quarter of firms use temporary or agency workers but only 13% of companies make changes to permanent staff to respond to changes in demand.
- Four fifths of companies said that co-operation between management and their workforce has helped in achieving the flexibility they needed in the past three years, 94% of companies said that this will be vital in the next three years
- Two way communication between employers and employees is critical to securing commitment. Three fifths of companies used three or more channels of communication with their employee
- Some 30% of firms think the UK environment provides the flexibility that their company needs and 41% disagree – a balance of -11%. However, this balance varies widely from + 1% for companies in more predictable seasonal markets to -19% for those with short order books. These tend to be the more innovative companies in niche markets which we need to grow.
Our report, Flexibility in the Modern Manufacturing Workplace, has been supported by Executives Online, a leading executive recruitment firm with UK and international operations, supporting manufacturers with fast, cost-effective interim management and permanent recruitment services.