A widening skills gap is threatening to undermine the achievements of manufacturers in the UK; hindering growth and pushing businesses back down the value chain. Getting the balance right between seasoned professionals and rising stars can help to bridge the knowledge gap of tried and tested experience, with innovative thinking; and businesses must utilise non-traditional recruitment methods in order to fulfil the talent need.
According to the latest EEF Skills Report 2016, over a third of vacant industry roles are now considered ‘hard to fill’ and 67 percent of employers cite a lack of technical skills among applicants as a primary cause of recruitment difficulties. For manufacturing businesses, finding engineers with the right experience and market understanding can be challenging and costly.
To help manufacturers overcome their recruitment challenges, there are a number of government-backed programmes that have been introduced. Run by Innovate UK, the Knowledge Transfer Partnerships (KTP) programme assists businesses across the UK to innovate and grow by helping to enrich the skills base and give them access to relevant cutting-edge research activity.
Part-funded by a grant, each programme links the business with a university and a graduate involved in a specific research project for up to three years. Proving to be a worthwhile investment, businesses participating in the programme achieve on average an increase in annual profit of more than £1m, while benefiting from access to value-added skills that they might lack in-house.
In addition, home-grown talent is another method of broadening the talent pool in a cost efficient manner. Setting up an apprenticeship scheme and, if appropriate, seeking the approval of the Institution of Engineering and Technology (IET) can help to introduce of a steady pipeline of new talent into the business.
Contrary to popular belief, apprenticeship schemes aren’t just available to larger businesses and there are a number of viable options available dependent on size. For instance, manufacturing businesses with up to 50 employees can take on apprentices aged 16 to 24 years and receive a government grant of £1,500 per apprentice. Despite the financial incentive from the government, it is not unusual for businesses to part-fund these training initiates themselves.
However, from April 2017, the way apprenticeships are funded is changing. In a bid to ensure three million apprenticeships have been filled by 2020, the new Apprenticeship Levy is designed to target mainly larger businesses. Firms with wage costs of £3 million or more will be required to pay a 0.5 percent payroll tax to fund the apprenticeships although a training allowance of £15,000 will be available to offset against the levy. The government’s stated intention is that employers will be able to get more out than they put in and each employer’s digital account for spending on apprenticeships will include a government top up, initially expected to be set at 10 percent.
Depending on the location of the business, it is also worth business owners enquiring into local initiatives that are designed to help develop skills that meet the needs of local employers.
Regardless of the action that is taken to gain access to talent, it is important that employers look beyond tried and tested recruitment channels. Those that take steps to address diversity issues by seeking talent in new or unexpected places may find that these recruits add significant value to their organisation. Working with not-for-profit organisations, local schools and training colleges and gaining access to projects run by local authorities can help to open up new employment channels and enrich talent recruitment programmes.
Caroline Milton is Partner and Head of the Manufacturing Group at Menzies LLP. Menzies has authored a guide for businesses in the manufacturing sector which provides advice and information on how to close the skills gap.