Manufacturing is vital to the UK economy. Responsible for 45% of the country’s exports, totalling £275bn, the UK is the ninth largest manufacturing nation in the world. This bellwether industry is increasingly turning to new digital innovations as it looks to boost productivity, with Industry 4.0 unlocking enormous opportunities for businesses. UK manufacturers are making smarter products faster and more efficiently than ever before, while at the same time, realising new ways to make goods more personalised and tailored to meet specific customer preferences.
But will UK manufacturers have the skills they need to adopt, implement and manage new technologies and realise their full potential?
The factors exacerbating the skills gap
The manufacturing sector is well on its way to becoming advanced and connected. Almost half of all roles in manufacturing will need to evolve within the next three to five years, as the industry becomes increasingly digitalised.
At the same time, it’s estimated that two million new manufacturing jobs will be created in the years ahead. Yet the industry is facing a concerning skills deficit. In fact, the British Chamber of Commerce revealed that 81% of manufacturers are having trouble finding staff with the right qualifications and experience, and the sector is facing its greatest skills shortage in 30 years.
With an all-time low level of unemployment and increasing numbers of job vacancies in the market, competition for talent is fierce. But advanced manufacturing is also changing the nature of what skills are required on the shop floor. As machines become more intelligent and organisations invest in smart factories, a whole new generation of manufacturing jobs has been created in Britain, for people to design, test and manage highly connected systems and innovations. UK manufacturers must start bridging this skills gap now, quickly and creatively.
The increasing cost of talent
The growing war for manufacturing skills is also increasing the cost of talent across the board. Increasing labour costs and sharp swings in currency exchange rates have flattened some of the global differences in cost competitiveness. In February 2000, average wages in the manufacturing sector stood at £356 per week. By April 2019, this had risen to a high of £612 per week.
This is a combination of the impact of the supply and demand for limited talent in the marketplace, along with the more technical skills required to bring in advanced manufacturing. As costs start to spiral, manufacturers must take a fresh look at their hiring strategy, to ensure they secure the best talent, at the right cost.
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Upskilling and reskilling the workforce
Firms can’t expect to find people to fill new job vacancies overnight. Instead, they will need to build the skills they need, by upskilling and reskilling their existing workers at pace. This will be crucial to plugging the short-term talent gap that will continue to widen as advanced manufacturing further evolves.
To prepare workers for the new demands of more digitally focused manufacturing roles, organisations should look to deliver short training programmes that last no longer than six months. Training schemes that exceed this or try to cover too much ground can actually disengage employees. But these initiatives shouldn’t just be seen as a one-off. UK manufacturers must foster a culture of continuous learning across their businesses. It’s just as important to repeat training and offer refresher courses. This not only cements the initial knowledge base but also ensures that the individuals being trained can keep pace with the latest developments in the industry. Programmes like this will help British manufacturers to build the sustainable talent pipeline they need to plug future skills gaps and establish a workforce that has the technical and functional skillsets required to drive their businesses forward in the digital age.
Organisations need to plan for the future demands of advanced manufacturing and nurture their own talent now, instead of relying solely on going out to the market to recruit external hires. Specialist recruitment will always remain a critical part of UK manufacturers’ talent strategy, but with the added market pressures exacerbating skills shortages and the cost of talent, these businesses will have to adapt and look to build talent from within their workforces as well.
