THE BLOG
11/03/2015 08:32 GMT | Updated 10/05/2015 06:59 BST

More Engineers are Essential to Sustaining UK Economic Growth

The latest ONS employment statistics suggest that the period of austerity could be coming to an end. Recovery in the UK job market continues at a pace with 5.8% unemployment, the lowest level for more than six years.

This is all good news for UK families, but there is also growing pressure on businesses to find and place candidates quickly enough to support the increased demand. For example, the engineering sector, which is worth £1.06 trillion to the UK economy, is suffering acute pressure to fill roles as the Government invests in new infrastructure projects and seeks to boost UK manufacturing. Finding the talent to deliver the growing pipeline of work is becoming increasingly challenging and new solutions need to be sought as the UK faces a significant engineering skills gap.

The last recession has re-written the rule book when it comes to the impact on workers and jobs. In the past, recession meant massive unemployment. However, this time it has been different. While unemployment did rise, many organisations looked to retain their staff as much as they could even if that meant introducing pay freezes, and in some cases pay cuts, putting a stop on new staff hires, cutting bonuses and reducing overtime. The recruitment industry saw a shift in hiring, with companies switching from permanent to contractor hires, matching staff levels to workload.

While these steps meant that most households retained an income, the consequence for many has been a drop in real-term income which has seen the UK enter the well-publicised 'middle income' squeeze.

The latest ONS data, showing falling unemployment, indicates light at the end of the tunnel, with additional statistics showing wages rising above the rate of inflation (with average earnings between September and November 1.8% higher than the same period in 2013).

However, while recovery in the jobs market is positive for individual workers, it highlights a wider economic challenge.

Wage growth can herald the start of a consumer spending-led recovery, but the lack of available skilled talent means that businesses face a constraint on their ability to grow. This constraint is particularly felt in the engineering industry.

Bringing more engineers into the industry is a long-term project. Engineering degrees, apprenticeships and training programmes provide a foundation for new talent but take time to provide people with the necessary qualifications to boost the workforce. Significant on-the-job training is also still required to provide the skills that meet current and future industry needs.

Research undertaken by Matchtech among 3,500 UK engineers shows that a significant industry skills shortage is recognised, with 95% of engineers surveyed identifying this as a major challenge.

Near full employment compounds this issue and an ageing engineering labour force (identified as the greatest issue facing the sector by the engineers we questioned) means there is a loss of experienced staff at the top end of the industry.

More than half of the engineers we questioned (59%) said they are willing to transfer into another sector of the engineering industry, giving the foundation for creating a flexible and skilled workforce open to changing roles to meet the shifting demands of different sectors.

Matchtech recently held a debate with engineering industry leaders who agreed that engineering skills are highly transferable and that making it easier for engineers to transfer into other sectors would help plug the skills gap. The challenge however, is getting the decision makers in that hiring process to recognise the efficacy of skills transfer as a fast-track and scalable solution.

Apprenticeship schemes are also helping to bring new talent into the industry, but I believe these should be opened up to include more adult apprentices, widening the net and embracing people with different experience and skills. We are working with clients who have already piloted these schemes with great success, employee retention and fast-track promotion being top factors.

Equally, greater flexibility on retirement age, pension benefits and working conditions would enable senior engineers that want to keep working to continue to share their experience and professional skills, helping develop the next generation of leaders.

As we move toward the 2015 General Election the issue of the engineering skills shortage in the UK needs to be addressed by government as well as the industry itself. Failure to tackle this will create a structural weakness that limits Britain's ability to continue growing - it is important we act now.

In our survey we asked engineers what they would like to see party manifestos focusing on. Interestingly apprenticeships received more attention than higher education. Around two fifths (41% of engineers) want to see greater investment in apprenticeship schemes for STEM (science, technology, engineering, and mathematics) and more than a quarter (26%) want reduced university fees or greater financial support for those studying STEM subjects.

More than a quarter (26%) want to see politicians setting out a clear energy infrastructure strategy for the UK, with 25% also wanting increased infrastructure investment as a foundation for future economic growth. A fifth (21%) want to see political manifestos committing to greater tax breaks and subsidies for organisations investing in engineering and industrial R&D.

While Government efforts to rebalance the economy towards manufacturing and drive growth through investing in infrastructure projects are welcome, more still needs to be done to sustain a workforce that can power engineering growth.

In an era of near full employment, finding solutions is not something that can wait.