Why is finding the right people with the right skills an up-skill battle?

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Manufacturers’ plans to drive productivity improvements and capitalise on the 4th 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 could spiral further, finds our latest report out today – An Up-Skill Battle.

Over the next three years, manufacturers expect a significant increase in demand for skills, yet almost three quarters are worried about how this demand is going to be met.

73recruitmentdifficulties 

 

The problems are both of quality and quantity of candidates with manufacturers reporting difficulties with applicants lacking the right technical skills (67%), a lack of relevant experience (61%), and an insufficient number of applicants (64%).

It is unsurprising then that the latest UKCES figures from its Employer Skills Survey shows the number of ‘hard-to-fill vacancies in manufacturing remain stubbornly high and unchanged since 2013.

35h2fvacancies

The situation is set to deteriorate even further as manufacturers expect a significant increase in demand for skills in the next three years.

 

 

Almost six in ten (59%) expect demand for people management skills to increase

Some 59% expect demand for leadership skills to increase

Production related and technical skills demand also set to soar (59%)

Over half (53%) expect demand for craft/technician skills to increase

Sales and marketing skill also in demand (52%)

IT and software skills set to rise too (47%)

Manufacturers are taking on the challenge, offering a number of incentives to attract and retain top talent that is scarce supply:

 

Over eight in ten (84%) of manufacturers offer competitive salaries to attract and retain highly-skilled workers

Half offer opportunities to work in other parts of the business

Over two-fifths (43%) are offering flexible working arrangements

 

And then there are apprenticeships – loved and value in manufacturing:

79engineeringapprenticeships

45nonengineering 

Had manufacturers not being taking such actions, they will already be over the cliff-edge and not just approaching it. Far from getting to grips with the issue, government policy has largely left manufacturers to try to soften the impact of the skills crunch on their own.

Our report finds that the challenges of finding, funding, retaining and retaining skilled workers are all likely to increase from 2016 and that many employers’ proactive plans may be pared back as they feel the bite of additional costs imposed through government policy.

What needs to happen now?

Government must match the ambitions of industry and ensure that the education and training system delivers the skills that employers require for innovation, productivity and growth over the next decade. Policies must help, not hinder firms, as they strive to overcome the challenges of finding funding, retaining and retaining skilled workers.

In the short-term:

  • Scrap the proposed immigration skills charge and freeze further employment costs to business

  • Deliver on EEF’s 6 red lines on the apprenticeship levy

In the mid-term:

  • Expand the role of the new Institute for Apprenticeships to identify gaps in provision

  • Ensure capital funding for FE colleges and the roll-out of National Colleges follows employer demand

In the long-term

  • Set targets for secondary schools for the number of Key Stage 4 pupils undertaking an apprenticeships

  • Revise the EBacc and develop a ‘STEMBacc’ in consultation with industry

 

Keep an eye out for further blogs on our new report….

 

Author

Head of Education & Skills Policy

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