Safeguarding manufacturing in post-Brexit Britain

Both government and industry have a role to play in helping to develop and safeguard the manufacturing skills that the country will need after withdrawal from the EU, says the head of education and skills policy at EEF, Verity Davidge

The skills shortage within the manufacturing sector is well documented – with 29 per cent of vacancies in manufacturing currently considered hard to fill. We know from our own research that a lack of technical skills and an insufficient number of applicants are the key drivers behind this and the reason why three quarters of manufacturers have struggled to fill engineering roles in the past three years.

These are the challenges that manufacturers are facing now. Fast forward to a post-Brexit world and these difficulties will only worsen, with employers expecting access to the EU talent pool to be limited – although the extent of this limitation is still the great unknown. Already we have seen some worrying trends on EU migration – national figures showing numbers fall off a cliff after the EU referendum, and research by EEF finding more EU nationals leaving manufacturing businesses and fewer applying for job roles. With this in mind, it’s a pretty safe bet to assume the number of vacancies considered hard to fill will only rise in the post-Brexit world.

On average, EU nationals make up 11 per cent of the manufacturing workforce, typically recruited in plant, process and machine operative roles, skilled trades and associate and professional roles. Manufacturers then rely on EU nationals to fill skills gaps in low, mid and highly skilled posts.

For most, recruiting EU nationals is an organic progress with employers simply recruiting the best candidate for that particular job at the time, and not deliberately seeking EU talent.

Their ability do this has been the positive result of the flexibility provided by the principle of free movement of people, which has been a great success story and a fundamental building block of the EU. This is in stark contrast to the complexities and costs that UK employers face when attempting to recruit highly skilled workers from outside the EU.

At the same time, there are a number of other reasons why manufacturers employ EU nationals. At the top of that list, cited by almost two-thirds (64 per cent) of manufacturing employers, is an insufficient number of UK nationals applying for jobs within the industry. UK manufacturers are simply not receiving job applications from the domestic workforce. It’s not just a lack of volume from UK applicants, but also the quality of those candidates. A third of manufacturers say the skills they need cannot be found within the UK labour market. This chimes with other EEF research that continues to highlight the challenge the manufacturing industry faces in recruiting the right people with the right skills. Other cited reasons for recruiting EU workers include foreign language skills and the work ethic of EU nationals.

There is much government can do on the future EU migration system to safeguard the skills industries such as manufacturing need for the future. First and foremost, design a flexible migration system that allows employers to recruit EU nationals, at all skill and salary levels, until the domestic labour market is able to supply the quality and quantity of workers we need. There has been much talk about a future migration system allowing for highly skilled job roles and possibly concessions for some lower-skilled job roles – but what about technician-level roles? EngineeringUK estimates that 124,000 engineers and technicians with core engineering skills will be required each year until 2024 to meet demand – where will they come from?

Manufacturers can’t put all their hopes on a future UK migration system that meets their needs, however, they need to look at how they can drive up the skills base within the UK – and they are. In response to safeguarding the skills they need post-Brexit, almost four in 10 manufacturers are increasing their investment in apprenticeships. These have been ingrained within manufacturing businesses for decades. In fact, more companies are looking at using apprenticeships to up-skill existing staff, not just new recruits as well as offering apprenticeships outside of engineering.

Manufacturers are also making a conscious effort to hold on to older workers with specialist skills. They are introducing new initiatives and adopting patterns of working that better suit their ageing demographic.

Other actions include increasing graduate programmes, looking to recruit employees from other sectors and industries with transferable skills and increasing training budgets for existing staff. However, manufacturers cite frustrations with the UK’s education and skills landscape – patchy training provision, poor careers provision, a lack of parity of esteem between technical and academic education.

Whilst government and industry is working together to plug the skills gaps once and for all, what is clear is that we can’t just switch off the tap when it comes to accessing the EU talent pool in the future. Much of the work manufacturers are doing to drive up the skills base will take time, and we won’t be replacing like-for-like with newly trained UK workers likely to entering the labour market at more junior roles. What we need is a balance – a flexible migration system and a responsive education and skills system. That’s the magic formula for fixing the skills gap.

Verity Davidge is head of education and skills policy at EEF