In the first of a new series on the UK’s fight to sustain talent, we look at the efforts of the engineering sector to train and retain its workers
Almost a third of UK businesses are seriously affected by skills shortages, according to the Confederation of British Business’ (CBI) Employment Trends Survey 2005. At the sharp end of this worrying trend is the engineering sector, where competition to recruit and retain the reducing numbers of graduates is fierce.
Far from its oily rags image, today’s engineers are responsible for everything from designing the Channel Tunnel to state-of-the-art shipbuilding and urban regeneration. They perform many roles that are essential to both basic infrastructure and the development of future technologies vital to the country’s global competitiveness.
CBI analysis of government figures reveals that the number of first degrees awarded in physics subjects and engineering has dropped by 27% since 1994. If this trend is not bucked, it could have serious repercussions on the UK economy. “The strength and future success of the UK economy relies on the education system producing students of a high calibre in these disciplines,” says Mariska van der Linden, senior policy adviser on skills and employment at the CBI. “Youngsters need to be equipped with the skills to make their way in the competitive globalised economy of the 21st century, and business must have them if it is to meet the onslaught from countries such as China and India. China alone produces almost 300,000 high-quality science and engineering graduates each year.”
In addition, the sector skills council SEMTA (Science, Engineering, Manufacturing Technologies Alliance) has predicted that half the 500,000-strong workforce will need upskilling over the next five years to meet demand. And to add to the pressure, the 2012 Olympics are expected to create 50,000 new jobs in engineering over the next six years. The regeneration of huge areas of London and the building of new stadiums need skilled engineers at the helm. This could be a great opportunity to showcase the sector’s expertise, but only if the right skills are in place.
According to Ian Carnell, head of workforce development at SEMTA, 80% of the current skills gap is down to a shortage in technicians. High-level skills are needed, with technicians trained to NVQ Level 4 and above. “There has been very little investment in training for a number of years, and the pool of fully-trained people is becoming smaller and smaller,” he says.
These shortages are having a knock-on effect on the productivity and profit margins of UK firms. “With less staff, things take longer to make. This leads to loss of orders and less time and resources for research, which is needed to develop new products. The way to attract new skills is to offer higher wages, but this then leads to higher prices, meaning companies become less competitive,” says Carnell.
It is also getting tougher to compete with firms in China and the Pacific Rim, where there is an abundance of skilled workers willing to work for wages a fraction of those in the UK.
So why are less graduates interested in a career in engineering? Part of the problem lies in the sector’s image. Debra Larkman, group training and development manager at engineering firm Arup, says young people do not realise the breadth of career opportunities engineering can offer.
“Engineering suffers as it’s regarded by many people as blue-collar work, when it needs to be seen on a par with professions such as architecture,” Larkman says.
Peter Miller, director of Pell Frischmann Consulting Engineers, agrees that better marketing could be key to attracting more high-calibre workers.
“At the moment, students looking for white-collar careers are more likely to head for law and accountancy rather than engineering. It’s really up to the profession itself to overcome this problem – perhaps with support from the media and the government by giving credit to engineering achievement when appropriate,” he says.
Miller cites a recent example of the Millau Viaduct in France, where substantial news coverage was given to the UK architect, Norman Foster, but no mention whatsoever was given to the engineers involved.
Efforts are being made to educate students at school level about engineering. For example, the charity Young Engineers aims to inspire young people to work in engineering by offering a network of clubs around the UK, where students can work on projects and even gain work experience within companies. It links primary and secondary schools with sponsor firms. This helps to raise the profile of the sector in schools, while giving sponsors access to potential employees of the future.
Some employers are proactive about organising work experience with schools. For example, Arup (see case study) actively goes into schools to help provide career advice and offer work placements for 15 to 16-year-olds.
Meanwhile, Network Rail offers an apprenticeship scheme for 17 to 19-year-olds, which involves a year’s residential training in Portsmouth, at HMS Sultan – the largest engineer training centre in England. It hopes that the chance to move away from home and live with other young people will attract more students. Within three years, apprentices are qualified maintenance engineering technicians.
However, smaller firms find it harder to source the time and money it takes to get involved in such initiatives. “It is the same big companies that end up putting their hands up to do something about it. There are not enough incentives for smaller firms,” says Larkman.
Ironically, it is smaller firms that often find it hardest to recruit as well. “If British Airways requires 100 apprentices, it will often get 500-600 applicants. The companies that aren’t attracting people are SMEs. They need to view skills development as a bottom-line cost. They accept they need to pay for steel, but skills are a raw product too and need to be factored in to the budget so money is available for training and recruitment,” he says.
The government supports vocational training for people aged 16-18, for which companies receive funding of about 14,000. However, once apprentices turn 19, there is a 34% reduction in funding. This means younger apprentices appear much more attractive.
“Employers often prefer to employ older people, but financially they take a hit of one-third of the funding,” says Carnell. To make matters worse, the Learning & Skills Council (LSC) announced in June this year that while it is increasing funding for 16 to 18-year-old apprentices by 2.5%, a further 6% will be cut in funding for post-19 apprentices in 2006. According to SEMTA, the announcement flies in the face of previous commitments by the LSC chiefs to attract older apprentices.
“A lot of people don’t realise they want to work in engineering until they are over 18. Then they can’t get an apprenticeship,” says Carnell. “A lot of talent is being wasted because of this apprenticeship-funding framework.”
The LSC agrees that attracting more adults into the sector is an issue. Alison Corbett-Gibbon, senior policy manager responsible for engineering at the LSC, says: “We are working with SEMTA to review its adult-apprenticeship framework, ensuring it is fit for purpose and delivering the skills needed by the sector.” However, no solid outcomes have so far been announced.
In July this year, SEMTA agreed an action plan to implementing a new Sector Skills Agreement with the Confederation of Shipbuilding and Engineering Unions (CSEU). The two sides will work together to map out which skills the sector will need over the next 10 years. One of the key areas this will address is the upskilling of the existing workforce and the development of adult apprenticeships.
John Wall, general secretary of the CSEU, says this agreement should help dialogue between SEMTA, the government and union members, to help deliver a better skills strategy.
“Now there is the opportunity for unions to sit down with employers, the government and those people delivering training to work together in a joined-up way. Traditionally, there have been too many people working on this issue separately. It’s early days to know whether the government will listen to us and deliver the extra funding that the sector needs, but this agreement is the first step and it is encouraging,” he says.
Carnell says another key area that needs to be addressed is the funding framework for NVQs. The LSC provides support for employers providing training up to NVQs Levels 1-3.
However, it is technicians with higher grades that the sector is most in need of. “Around 10,000 technicians are needed over the next 10 years who are qualified to NVQ Level 4. We want to see the government providing mainstream level 4 technical training,” says Carnell.
Corbett-Gibbon says that while the LSC recognises the need for higher-level training, with only limited public funding available, it has to prioritise how it is spent. “Our funding is focused on giving everybody the opportunity to raise their skills to the basic level required to be able to get and keep a job – such as Level 2, and in specific priority sectors, Level 3. For levels beyond this, we expect employers and individuals to make a greater contribution to training,” she says.
Some employers are looking abroad to fill skills gaps and making links with European universities, where qualifications are often compatible with working in the UK. Foreign workers also possess language skills, which are becoming increasingly attractive in the global market.
Despite this, the CBI says that focusing on home-grown talent is the best way to fill skills gaps in the long term. “Workers recruited from abroad are a quick and effective way to plug skills shortages. However, in the long run, the UK must look to its own workforce to ensure a sustainable supply of skilled workers,” says van der Linden.
Employers, unions and the government all recognise there is a serious skills crisis in the engineering sector, but there is still much to do. The Sector Skills Agreement is certainly a step in the right direction. If this helps facilitate the dialogue needed to bring about the increases in funding needed to educate students at school level and help attract more graduates into engineering, while supporting apprenticeships for workers of all ages, it has to be good news.
It is also up to employers to help sell their industry to tomorrow’s workforce.
If headway can be made in time for the 2012 Olympics, when the world’s eyes will be on the UK, it could regain the global recognition it once had for engineering excellence and innovation. However, all the signs are that this could be a marathon effort.
- Around 50% more engineering and science graduates are needed. They also need work experience to acquire more project management and team leadership skills
- Upskilling at technician and craft level is needed to create hybrid skillsets at NVQ Level 3 and 4
- Operator skills are likely to be needed less due to increased automation, so capable operators will need to upskill to fulfil craft/technician roles
- Managers need to be upskilled in commercialisation, financial management and ‘lean priniciples’ to make sure workforces are competitive
Source: SEMTA Sector Skills Agreement
Where’s it all gone wrong?
- Lack of training over the years has led to a sector-wide need to upskill the current workforce
- Lack of education of the benefits of a career in engineering and its perception as a blue-collar career has led to less students being attracted to the industry
- Heightened competition from countries such as China, where high-quality, cheap labour is abundant, is driving down profits for UK firms, leaving less cash in the pot to train the UK workforce and offer higher salaries
- Government support is only available for NVQ Levels 1-3. But 80% of skills shortages are for technicians trained to NVQ Level 4
- There is a mismatch between government-funded training and age profile – 90% of the 2014 workforce is currently employed, says SEMTA, yet funding favours the under 19s
- Lack of joined-up dialogue between unions, employers and the government has delayed action to address skills shortages
Plugging the skills gap: what needs to be done
- An action plan agreed between employers, unions and the government and initiated through the Sector Skills Agreement needs to be put into practice
- More funding is required for apprenticeships for over 19s
- A seamless funding regime is needed for NVQs Level 1-5
- Employers of all sizes need to budget more carefully for training needs so they can upskill their workforce and offer more apprenticeships without relying on government hand-outs
- Careers advice in schools needs to improve to educate students of the benefits of a career in engineering
Case study: Arup thinks ahead
Arup is a professional firm of engineers, designers and planners, employing about 7,000 people. Responding to heightened competition for engineering graduates, it has led initiatives over the past five years targeting prospective employees from
“We needed a pipeline for new talent because trying to recruit at graduate stage is too late. Engineering graduates are very attractive to management consultancies and accountancy firms in the City. We can’t leave it to chance to see what decisions they make,” says Debra Larkman, group training and development manager at Arup. The following initiatives have been launched:
- Arup employees give career talks about engineering to schools and universities
- School children aged 15 to 16 are offered structured work experience
- Academically gifted 17- and 18-year-olds can join the company as pre-university trainees on a gap-year placement
- Undergraduate sponsorships are offered to trainees who show promise.
Undergraduate sponsorships are arranged with a view to recruiting on graduation. However, Arup does not tie students in as the scheme has other benefits. “They help promote us within universities, so we feel we get a good deal even if we don’t end up recruiting them. Word-of-mouth recommendations from peers are much more effective than other promotions,” says Larkman.
Once graduates join Arup, they receive continued training by:
- One of seven training schemes accredited by the relevant institution leading to a Chartered Engineer qualification
- More than 200 short courses in technical, management and leadership, business and interpersonal skills, delivered in-house each year
- ‘Skills networks’ that put staff in touch with colleagues working in similar fields to share knowledge and experiences and promote discipline-based learning.
Arup is now ranked within the top 40 of The Times’ Top 100 Graduate Employers. However, the pressure to retain staff is proving challenging. “We are seeing more and more poaching going on – even our not-so-good guys are getting offers,” adds Larkman.
Engineering Employers Federation: 020 7222 7777, www.eef.org.uk
Enginuity: (organisation offering career advice for budding engineers) 01923 238441, www.enginuity.org.uk
Learning & Skills Council: 0870 900 6800, www.lsc.gov.uk
Royal Academy of Engineering: 020 7227 0500, www.raengbest.org.uk
SEMTA: 01923 238441, www.semta.org.uk
Trades Union Congress: 020 7636 4030, www.tuc.org.uk
Young Engineers Clubs: www.youngeng.org