Our Guest Blog is from Toby Peyton-Jones, UKCES Commissioner and Director of HR at Siemens Plc
UK manufacturing is fighting back. With growing interest in high-tech components and intellectual property the UK has much to offer on the global circuit. But making the most of the opportunities coming up will only happen if firms have the right people with the right skills. With the government's spending review around the corner, it's a good time for the sector to examine how it can build on its strengths.Today, manufacturing accounts for over half of all UK exports. Having consolidated its position, it is now one of the most productive sectors in the UK economy. Investment in innovation and technology has also risen, with 75 per cent of UK R&D being spent on manufacturing. It's clear that the sector is hungry for a win at an international level.
So-called STEM skills (science, technology, engineering and mathematics) are the lifeblood of the sector. But they're also in high demand in other areas of the economy, including high-pay sectors like banking and accountancy. Figures show that 40 per cent of STEM graduates go into non-STEM roles.
With this shortage so well documented, it's surprising that a significant number of engineering and manufacturing firms are less likely than average to spend time and money developing the skills of their staff - one of the prerequisites of a good job as far as I'm concerned. Findings from the UK Commission for Employment and Skills, where I am a Commissioner, show that training expenditure in the sector is lower than average. And while many employers do train their staff, this only reaches a minority of the workforce. In part, this is due to the need for highly specialised skills, which take time and resources to develop. But I also wonder if other, cultural, factors are at play here.
As Director of HR at Siemens plc, I know that a mix of skills is required to achieve effective business performance. Many engineering companies have strong graduate programmes, but what about non-graduates? This is where apprenticeships and their new siblings, traineeships, can help, as new entrants are able to learn and apply technical skills on the job. Employment projections show that skilled trades and operatives will be in demand to replace those leaving or retiring from the sector. It is therefore more essential than ever that businesses invest in their apprenticeship talent pipeline and build in traineeships that give young school leavers a step ladder and the aspiration to take up a career in manufacturing and engineering.
Small firms also have specific challenges when it comes to keeping up the pace. For many of them, thinking strategically is difficult when survival is what matters and costs are rising. Although engineering is traditionally a fiercely competitive sector, collaboration with other small firms might prove to be a lifeline here. Collaboration can help businesses gain bigger contracts, invest in equipment and provide essential bespoke training for staff.
In essence, it's clear that the sector has made considerable changes already, and is moving up the leader board. But to keep winning consistently, firms will need to work together, and seek out any promising opportunities in next month's spending review. Investing in skills, apprenticeships and collaboration will ultimately ensure that the sector doesn't just fight for survival – it thrives too.