The labour shortage challenge for UK manufacturers
Released On 13th Mar 2023
When we talk with our manufacturer clients, there is one challenge we consistently come across: hiring and retaining the right talent.
This is not a new problem. Building and maintaining a workforce with the right skillset has long been difficult for UK manufacturing businesses. But the challenge has been intensified by digitalisation, Brexit and the Covid pandemic; and then, more recently, by issues such as low unemployment and wage inflation.
Now, according to Make UK’s latest research, some 36% of vacancies in manufacturing are proving hard-to-fill as applicants lack the appropriate skills, qualifications or experience. This compares to an average rate of 24% across all industries.
The problem cuts across almost the entire workforce: from leadership and management, to production and fulfilling orders and continuing operations more generally.
To hear about the extent of the challenge, and what manufacturers are doing to mitigate it, we spoke to Jamie Cater, Senior Policy Manager at Make UK. He said: “In the last 12 to 18 months, we've seen the conversation really shift from having enough people with the right skills to just having enough people.”
Jamie added: “We're seeing an increasing proportion of firms, about one in 10, take longer than 12 months to fill a vacancy. This is having a significant impact, not just on fulfilling their order books, but on future planning for growth and sustainability.”
The recruitment conundrum
Part of the challenge is an ageing workforce. “An increasing number of employees have either retired early or plan to do so in the next five to 10 years,” Jamie said. Many others have reduced their hours or are look towards early retirement.The sector suffers from an image problem too, with many roles seen as low skilled, low paid, and using heavy machinery in repetitive tasks. Of course, those of us close to the industry know that’s not normally the case, and manufacturing can offer exciting, often hi-tech career options.
How the industry is meeting the challenge
So, what are manufacturers doing to tackle the labour shortage problem? Some firms have increased pay or begun to offer other financial awards such as retention bonuses or, more recently, one-off financial help to cope with the increased cost of living. Others are investing more in workforce training and development, so that employees have opportunities to progress and develop within the firm and take their career further. Non-financial benefits, such as offering flexible working – where possible – can also help.Jamie says: “It's about looking at the existing workforce and how we retrain and upskill them to make sure they can meet the big challenges they face. We need more investment in leadership and management skills. We need good leaders to lead teams and businesses through complex processes of change, such as adapting to flexible working or four day weeks. And as well as technical ability, managers also need social and emotional skills.”
We know that manufacturers are committed to investing in their workforce, both current employees as well as the next generation of talent. Apprenticeships remain an important part of this, despite the frustrations caused by the Apprenticeship Levy. Jamie says: “Apprenticeships are the main route through which employers will bring new talent into the sector. I think that's partly because there isn’t necessarily a great understanding of the other routes that are available to them, like T Levels. And new government initiatives are often quite poorly understood by employers, but they know what they’re getting from apprenticeships.”
It's clear that as the nature of the recruitment challenge facing manufacturers develops and deepens, firms will have to adapt their strategies too.
Help is at hand
Howden have been Make UK’s insurance partner for 15 years. We offer all our clients, regardless of the size of your business, an advised sale. ,Whilst we might not be in a position to offer specific advice on labour shortages, we have considerable manufacturing expertise to advise you on the best insurance for your needs, and we support you every step of the way when taking out insurance and making claims.
To find out more about how we can help, contact the specialist Howden team. Call 01234 230275 or email: makeuk@howdeninsurance.co.uk
