When skills are scarce employers must have access to the global labour market

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This week, EEF submitted its response to the Migration Advisory Committee's Review of the Shortage Occupation List. Today's blog gives an overview of our response.

When skills are in short supply, manufacturers must have access to the global labour market

The UK must invest to grow and stay competitive in increasingly demanding global markets. The absence of the right skills within the labour market and the policy settings to ensure the economy retains those skills will blunt the competitiveness of the UK and may reduce the attractiveness of the UK to investors.

Employer’s access to the skills they need, or the lack of this, has a direct impact on future investment intentions and plans to Make It in Britain. However, finding a sufficient number of workers with the required skills and qualifications are a significant challenge, with manufacturers continuing to report difficulties in finding highly skilled workers.

Manufacturers’ ability to respond to changing markets and circumstances remains dependent on the UK’s dynamic labour market, which has remained relatively flexible. However, the UK’s current migration policy continues to hamper this flexibility.

It is of upmost importance that employers are able to access highly skilled workers, whether within the UK, Europe or outside of Europe. However, those recruiting outside of the EEA face a process which is complex, burdensome and costly, particularly for SMEs.

The very minor relief some employers have when recruiting non-EEA workers, is the shortage occupation list which hosts occupations which are in short supply and therefore UK employers wanting to fill such posts in their workforce are not required to go through the unnecessary and time-consuming burden of the Resident Labour Market Test (RLMT).

This week EEF submitted its evidence to the Migration Advisory Committee whose job is to review the current occupations on the list and recommend whether they should be retained or removed or whether additional job titles should be added.

In summary, we recommended that the current engineering SOC codes on the list are retain – these are:

  • 2121 Civil Engineers
  • 2122 Mechanical Engineers
  • 2123 Electronics Engineers
  • 2124 Electronics Engineers
  • 2126 Design and Development engineers
  • 2127 Production and process engineers
  • 2461 Quality control and planning engineers

EEF’s skills survey found that those four in five manufacturers were struggling to recruit. Some 37% said they were experiencing recruitment problems for professional roles – these will include those listed above.

Over half (54%) said they were struggling to recruit for skilled trades/technicians positions, strongly suggesting that engineering technicians remain in high demand and short supply and therefore we recommended that 3113 Engineering Technicians were also retained on the list.

The MAC asks for evidence on why we should retain these occupations under the headings of shortage, skill and sensible so in additional to the difficulties manufacturers report in recruiting for these posts, here are a couple of extra thoughts as to why.

Pay for engineering positions currently on the list is generally increasing:

  • Pay for senior engineering positions have maintained a steady increase since 2011-12, and are now above the peak we say in 2010-11.
  • Pay has remained fairly solid since 2012-13 and we expect this to continue.
  • Less senior engineering positions are most subject to fluctuations, which may reflect the fact that higher skilled workers are in higher demand and therefore the pay increase demonstrates the need to retain highly skilled workers.
  • Our pay benchmarking shows that pay for engineering positions currently on the shortage occupation list is far above average pay across the economy and that these roles in particular mechanical, electronic and design engineers are in high demand.

Manufacturers are investing in their future workforces:

  • Two-thirds plan to recruit an engineering apprentice in the next 12 months
  • Two-thirds plan to recruit an engineering graduate in the next 3 years
  • Eight in ten are training existing employees
  • Seven in ten plan to raise investment on staff and training, with one in six targeting a significant increase.

However, these are not ‘quick-fixes’ – investing in future talent is a long-term commitment and in the short-term employers need to be able to recruit for unfilled posts. Moreover, with manufacturing needing almost one million workers by 2020 – the number of apprentices and graduates currently coming out of the system will not be sufficient to meet this demand.

More evidence required

Whilst we have recommended to the MAC that the current occupations are retained on the list, we believe that the job titles that fall under these need to be expanded. As such we have requested that the MAC gives EEF time to work with other trade associations to ensure those job roles that are in short supply are included, giving manufacturers some support to what is an increasingly difficult problem. To feed into this evidence gathering please contact Verity O’Keefe at vokeefe@eef.org.uk

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Head of Education & Skills Policy

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