Winning the post-Brexit war for manufacturing talent
01 August 2019
There’s been plenty of speculation recently around talent scarcity in the UK post-Brexit – and the manufacturing industry is no exception. So what can manufacturers do to help win the war for talent?
This article was originally featured as the cover story in the August 2019 issue of EPDT magazine [read the digital issue]. Sign up to receive your own copy each month.
Here, Rob Sinfield, Vice President, Business Cloud Enterprise Management at enterprise software provider, Sage looks at the how the manufacturing industry is being affected by Brexit (with only 18% of businesses saying in a recent survey by Sage that they wouldn’t be impacted at all), the changing skills that manufacturers should be looking for (such as digital skills to take advantage of industry 4.0) and the ways that manufacturers can tackle talent scarcity – from considering wages and outsourcing to rethinking recruitment and training processes.
For many years, manufacturing has been associated with outsourcing, with many businesses choosing to base factories in low-cost environments like China, India and Eastern Europe. But we may be starting to see a shift, due in part to developments related to sourcing, economics and technology. The weak pound created by Brexit disruption is making it more expensive to source overseas, making it more attractive to ‘Buy British’ and source locally.
And for manufacturing, ‘Brand Britain’ holds sway with customers – and manufacturers see more opportunity in creating local, artisan goods with higher prices than cheaper mass-produced goods. They understand that being ‘Made in Britain’ can be regarded as a badge of quality, even if goods are priced higher. However, there could be a barrier to taking advantage of this increasing trend of buying British – and that is having the right talent available to support this type of growth.
In today’s globalised world, every business is a combatant in the war for talent. Manufacturing is no exception; indeed, the specialised skills needed mean that it is especially vulnerable to competition for scarce talent. For example, Deloitte predicts that over the next ten years, US manufacturers will likely need to add 4.6 million manufacturing jobs to meet demand – 2.4 million of which may go unfilled. And in a recent British Chambers of Commerce survey, more than four-fifths of manufacturers said they struggled to hire the right staff in 2018.
The prevalence of technology and computer-controlled machinery in the industry means that factories consisting of assembly lines employing single-skilled workers are fast becoming ‘old school’. Augmenting human skills and using machines to complete mundane, repetitive or dangerous tasks isn’t a new trend – it’s what drove the industrial revolution. Today Industry 4.0 has given rise to a new era of intelligent machines and robotics.
There’s a temptation to think – and, among workers, a fear – that automation will replace humans in many areas of the factory. Smart manufacturers, however, understand that humans will always play an important role; this is about augmenting man and machine, creating roles rather than replacing people. Rather than having people attending to machines or undertaking repetitive processes, they will be needed to manage intelligent machines, interpret data and identify strategic opportunities that new technologies afford.
But advanced skills are in short supply. To find out how prepared manufacturers are in the war for talent, we interviewed 900 senior decision makers at manufacturing businesses in the US, UK and Canada.
Identifying manufacturing’s skills challenge
It isn’t just technical skills that manufacturers will need to succeed in the future. In the US and Canada, two in five respondents said that creativity was more important than technical ability, reflecting the importance of vision and problem-solving abilities to developing new products and entering new markets.
The scarcity of these advanced skills is compounded by the impact of regulation on the war for talent. Uncertainty surrounding immigration regulations – for example, as a result of Brexit or the current US administration’s policy – further increases the potential difficulty of acquiring the required talent needed. In the UK, over a quarter (27%) say that their business will be “highly impacted” by regulations affecting immigration, while the figure for the US is even higher at 30%. Overall in the three countries, between 79% and 83% of businesses say that will be affected in some way.
If manufacturers can find the skills they need or develop them in-house, they are then faced with the challenge of remodelling organisational design and processes so that they play to the strengths of people and machines. This will become key to advanced problem solving, as Hazel Copeland, CFO at Woldmarsh, explains in Sage’s report: “There is continuing importance of humans in manufacturing despite the hype around robots, AI and automation – and this won’t change. What’s important is that manufacturers audit their processes and identify which low-skill, manual and repetitive tasks can be handled by these technologies, enabling them to establish what tasks should be left to humans.”
What’s more, there are significant differences between how manufacturers in these three markets view the balance between technical and creative skills. In the UK, only 28% of manufacturers believe that creative skills are more important to meet the demands of the future, compared to 39% in the US and 42% in Canada.
Wherever the balance truly lies, businesses have ethical and practical obligations not to make large numbers of workers redundant without thinking about retraining and repurposing skills. Manufacturers, like all other businesses, have a moral imperative to invest in the workforce and boost skills among employees. Furthermore, they have a duty to their shareholders and customers to develop innovative new products and services – something that no machine can learn. The ongoing push and shove between ethics and productivity is an age-old concern, that if not addressed by industry, will be managed through legislation.
Rob Sinfield, VP Business Cloud Enterprise Management, Sage
Winning the war for talent
A declining international talent pool requires a fundamental change in manufacturers’ recruitment strategies. To combat restrictions on skilled immigrant workers, they may need to look more closely to home, or invest more in upskilling existing employees.
But it will also likely need manufacturers to think creatively about solving the talent shortfall. They might, for example, need to broaden their recruitment practices so that they can take advantage of groups they might not previously have considered – for example, ex-armed forces veterans, parents returning to the workplace and younger workers, perhaps through apprenticeships.
There are signs that many manufacturers are already beginning to do this. According to recent research by ManpowerGroup, a third of companies are already recruiting from outside traditional talent pools, while 36% are adjusting their education or training requirements to overcome the talent shortfall.
Businesses need to reimagine what they can provide in terms of a fulfilling career and what constitutes the best type of employment benefits. While pay will always be important, other initiatives like flexible working will also be key to finding and retaining the talent that will drive the company’s success in the years to come.
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