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Tender Ref: HCUK/ESF/2017.SD08

Skills Support for the WorkforceSkills Gap Report

Report Detailing Employer Skills Requirements up to 2022

Sector: Engineering, Manufacturing and Food Manufacturing

Contents

Background...........................................................................................................................3

Market Intelligence.................................................................................................................4

National Overview..............................................................................................................4

Regional Overview.............................................................................................................4

Research Methods.................................................................................................................8

Skills Requirement Report Findings and Recommendations.................................................9

Sector Summary................................................................................................................9

Skills and Training Requirements....................................................................................10

Challenges.......................................................................................................................15

Recommendations...........................................................................................................17

Legacy.................................................................................................................................18

References and Contributors to Report...............................................................................19

Appendices..........................................................................................................................21

Appendix 1: Skills Survey.................................................................................................21

Appendix 2: Bespoke SSW training.................................................................................25

1 | P a g e SSW Skills Gap Report: Engineering, Manufacturing and Food Manufacturing

Key Contacts

Skills Requirement Sector Engineering, Manufacturing and Food Manufacturing

Company/Organisation conducting the research

KFM Training Ltd

Key Contact for The Project

Name/Email/Telephone

Anthony [email protected] DD - 01482 483020

Report Produced by Nicola Jackson

Additional research and writing support: HCUK Training

Company/Organisation Address

KFM Training Ltd29 – 30 Silver StreetHULLHU1 1JG

Company/Organisation Tel Number

01482 210002

Company/Organisation Key Contact Email Address

[email protected]

Any Other Contact Information


mailto:[email protected]

mailto:[email protected]

Background

In August 2017, KFM Training Ltd (KFM), an industrial recruitment and training company, was commissioned by HCUK Training to review the engineering, manufacturing and food manufacturing sector across the Humber Local Enterprise Partnership (LEP) region.

The review was part of the ESF-funded Skills Support for the Workforce (SSW) programme and focused specifically on the region’s small to medium-sized enterprises (SMEs), although information on larger companies was also gathered. It included an analysis of:

current and emerging skills gaps and training needs across the sector up to 2022.

how aware Humber’s SMEs are of the skills needed to drive sector growth.

the willingness of SMEs to invest in developing the skills of their workforce.

Over a period of three months, KFM carried out extensive desktop research, spoke to local employers and completed a survey of 160 SMEs to develop a thorough understanding of the sector’s skills requirements.

This report presents KFM’s findings, including:

an overview of the current state of the sector.

an analysis of survey findings.

how regional stakeholders can support SMEs.

recommendations to ensure employees within the sector have the skills needed to drive business growth through 2022 and beyond.

HCUK training have carried out additional research to enhance the initial findings, including desk top research, focussed surveys and in depth interviews. HCUK have also contributed additional writing support to the report, alongside supplemental evidence.

This report is designed to provide a snapshot of the sector within the Humber, showcasing some illustrative and current developments as context for the skills gaps and challenges it faces. It is not intended to, nor would it be possible to, provide an exhaustive record of the many successful events, business and developments within these sectors in this report alone. Further details of the developments referenced, and many more that cannot be covered within the scope of this report, can be explored through the links provided in the resources section.


Market Intelligence

National Overview

Nationally, manufacturing, food manufacturing and engineering represent high value sectors of the economy. Various definitions exist for the industry types included within these sectors, and there can be cross over between the definitions. Food manufacturing statistics are also often included as a sub sector within manufacturing as a whole.

Engineering as a term covers a broad range of sub sectors including chemical, civil, electrical, manufacturing, and mechanical engineering sub-sectors, though these can be broken down further. Most people working in the sector are engineers who develop new products, but other job functions include administration, finance, sales and marketing. Engineering UK 2018’s snapshot estimates the value of engineering at £420.5 billion (25% of GDP), with a GVA multiplier of 1.45 in 2015. Within this, they incorporate the manufacturing sector which they estimate provided £146.1 billion GVA in 2015.

The manufacturing sector is responsible for creating products from raw materials to meet consumer and business needs and the storage and distribution of these goods. It can be broken down into sub-sectors including transport, machinery, electronics, metals, food, and chemicals and pharmaceuticals. Manufacturing meanwhile contributes 10% of GVA, providing 2.8 million jobs and £186 billion of economic output in 2017 (Source: Parliament Briefings). Although the contribution to the UK economy of manufacturing as a value has stayed reasonably steady, the number of people employed in the sector has declined steadily with the increase of automation. Engineering

Food and drink is a large part of the UK economy and contributes to import, export, farming, manufacture, sales and exports. It is an international sector, with only half of the UK’s food supplied domestically (Source: UK Government). In 2016, food manufacturing’s GVA was £29.5 billion (Source: ONS). The food and drink manufacturing was the sector least affected during the recent recession. Productivity was not reduced as heavily as in other areas of the economy and has now returned to pre-recession levels.

All three industries have been a focus of and impacted by national policy agendas, including the Apprenticeship Levy, T Levels Reform and the Industrial Strategy. All of these have significant implications for the sector at a local and national level, including the development of Local Industrial Strategies, focus on productivity, and resultant changes from skills reforms on routeways into the sector.

Regional Overview

The Humber LEP Region includes four local authority areas (East Riding, Kingston upon Hull, North Lincolnshire and North East Lincolnshire) covering 3,639 square kilometres. As of March 2018, it has a population of approximately 925,000 people, of which 572,575 are of working age, and 451,500 are economically active. Of those that are economically inactive, 25,900 are actively seeking employment. (Source: Nomis)


There are approximately 29,000 businesses in the region providing over 400,000 jobs, from semi-skilled through to highly skilled and professional/managerial positions. 74% of the region’s population are employed, 9% of whom are self-employed. This is slightly lower than the national average of 75% of people in employment, of which 10.5% are self-employed. The majority of those in work (67%) are employed full-time, and 17% are employed in manufacturing. (Source: LMI Humber / Nomis)

In 2015, the Humber region’s Gross Value Added (GVA) was £17.8 million, over £22 million below the national average. The GVA per head was £19,243, slightly higher than the levels seen before the 2009 economic crash but £4,539 lower than the national average. The difference between the regions GVA per head and the national average widened each year between 2009 and 2015, with an average yearly growth since 2007 of 0.89% compared to 1.92% nationally.

In 2014, GVA per job was between £38,394 and £41,800, which was at least £2,500 lower than the national average and, again, the gap seemed to be widening with productivity in the City of Hull was about 20 points below the UK average. (Source: ONS / Hull University)

Engineering

There are currently 7,129 people across the Humber employed in the engineering sector, accounting for 2% of the workforce. Most people working in engineering are based in North Lincolnshire (35%) and the East Riding of Yorkshire (33%); approximately 16% of the workforce is based in Hull and a further 16% in North East Lincolnshire. (Source: LMI Humber)

Engineering companies in the region range from larger businesses, such as Humber Electrical Engineering, who were founded in Hull in 1908, and Beckett Rankine, a leading marine civil engineering consultancy, through to smaller companies and start-ups such as CRK Engineering, who were established in 2011, employ over 24 people and have continued plans for growth and Ridings Consulting Engineers, who were founded in 2015 and now employ over 15 people.

In 2016, Humber LEP recognised a regional shortage in the engineering workforce and began working with local companies to develop apprenticeships to help address a growing skills gap. This reflects the national picture, where engineering is considered a growth sector but one without a suitably skilled workforce available to meet demand: the Royal Academy of Engineering estimates 186,000 engineers and 79,000 other skilled workers will need to be recruited into the sector every year until 2024.

To achieve this level of recruitment, the industry will need to attract suitably skilled workers and address issues such as gender imbalance (only 11% of professional engineers are women, one of the lowest rates in Europe), as well as ensuring skills training is in place to respond to the requirements of technical level roles where job growth is the greatest (Source: Women’s Engineering Society).

In the Humber, a joint initiative between Green Port Hull, Siemens Gamesa, Airco and Jobcentre Plus have created Women into Manufacturing and Engineering (WiME) in 2016.


WiME work to engage more women with the idea of working in the sector, focusing on the number of jobs available, their variety and the higher than average rates of pay.

WiME currently works with over twenty employers in the manufacturing and engineering sector, holding events, career fairs, and talks at local schools and colleges throughout the year and during National Careers Week. At their first career event, eight women found jobs or apprenticeships. One of WiME’s main aims when talking to schools is to encourage girls to continue to study STEM subjects at school when they select their GCSEs; the majority do not, which closes off potential career paths.

Manufacturing

Manufacturing represents a key sector for the Humber, employing a significant proportion of the total workforce. Employers in the area include British Steel in Scunthorpe, Nippon Gohsei, BOC and BAE Systems. There are 59,116 people across the region working in the manufacturing sector, accounting for 16.7% of the total workforce. Most people are employed in Hull (32%), followed by East Riding (29%), North Lincolnshire (24%) and North East Lincolnshire (15%). Most of the industry works to a 24-hour shift pattern, 365 days a year and their wages are generally higher than the national average at £32,467 per annum. (Source: LMI Humber / EEF, the manufacturers association).

The Humber Region GVA for manufacturing per job stands at £70,000, more than double the GVA for public admin, education and health and warehouse and retail (£32,6000) and transportation and storage (£31,800), while that of information and communication is almost 30% lower at £51,000. (Source: LMI Humber).

In 2015, the Humber LEP Region’s GVA was £3.97 million, slightly higher than the national average of £3.94 million but significantly lower than 2009 pre-economic downturn levels of just over £5 million. However, this still accounts for approximately 24% of the region’s GVA and, in 2017, Humber LEP stated that, while the sector faced challenges there was still scope for inward investment. (Source: ONS / Humber LEP).

Chemicals and pharmaceuticals is a major manufacturing sub-sector in the Humber, with large companies such as Reckitt Benckiser, Phillips 66, Cristal, Smith & Nephew, BP and Croda all operating in the region. An SSW Skills Gap Report in 2015 recognised most employers in this sub-sector were larger companies and that there were few SMEs, which continues to be the case.

One significant growth opportunity is Siemens’ Green Port Hull development which includes wind turbine blade manufacturing, assembly and servicing as well as opportunities for other businesses involved in the manufacturing and energy sectors to co-locate on the site. Green Port has the potential to create thousands of new jobs for local people across most priority sectors, not only at Siemens but throughout their supply chain, and make the Humber a leading centre for the renewable energy industry.

Food Manufacturing

The Humber stands at the centre of the UK’s seafood industry, processing 70% of the country’s seafood, and is one of Europe’s largest centres for food manufacturing,


processing, packaging and retail distribution as well as research and storage. Research is carried out across the region, including at the Humber Seafood Institute which helps businesses explore trade opportunities and supports growth within the sector.

The sector employs over 14,453 people, 5,000 of which work in the seafood industry, and accounts for 4.1% of the region’s workforce. Most people work in Hull (32%) or North East Lincolnshire (30%), with a further 20% based in the East Riding of Yorkshire and 18% in North Lincolnshire. (Source: LMI Humber / Invest Humber)

2,645 businesses are operating across the sector, accounting for 10.2% of all businesses in the region. These range from large national and international companies such as Aunt Bessie’s, Young’s Seafood, Axgro Foods, and Saxon Foods. Others include Bright Blue Foods, who took over Greencore Cakes & Deserts early in 2018, and Cranswick, who was recently nominated for the Hull Daily Mail Green Business Award through to smaller, family-run businesses and start-ups such as food distributors Turner & Price Limited, restaurant chain Cucina 1884 and micro-brewery Docks Beers. (Source: LMI Humber)

Depending on the type of business, the challenges faced by food manufacturing companies differ, though maintaining their customer base, managing the uncertainties of Brexit and fluctuating currency along with prices of raw materials increasing have been cited.

The food and drink sector has the potential to be an important part of the UK’s industrial growth. Its products have benefits that can directly impact health and wellbeing and it is an area of focus for both the public and private sector going forward. It produces over 1,500 new product every quarter, and invests significantly in innovation (with 4% of its total spend going on research and development) (Source: IFM 2010).

Innovation has always been a key strength of the food and drink industry, and this needs to continue if the sector is to continue to grow. Going forward, seafood manufacturers will need to consider ways to innovate including investing in new technology to improve food processing, helping ensure the Humber remains the centre of UK’s seafood industry.


Research Methods

To enable KFM to complete this report we distributed a survey to our network of 160 companies working across the engineering, manufacturing and food manufacturing sector.

The companies were a combination of SMEs and micro-businesses, and 33 responded to the survey, a response of 20%. Our focus was on SMEs over larger businesses, in line with the remit of the report. We also spoke to clients and networking groups including:

Bondholders: A local group charged with the marketing and promotion of the Humber on the national and international stage.

Federation of Small Businesses: Experts in business with a mission to help smaller businesses achieve their ambition.

Institute of Directors, East Yorkshire Division: Offer access to business information, training, professional expertise and networking opportunities.

Hull BID: Work in partnership with businesses within the area to assist in the growth of the Humber region.

FEO (For Entrepreneurs Only): Group of likeminded local entrepreneurs who offer assistance, advice and support to help build the local economy.

We would recommend ongoing engagement with these groups to support future development and awareness of skills training opportunities, research and innovation funding and Growth Hub support within our region. This could include a regular agenda item at meetings to promote and encourage engagement with regional initiatives and the take up of training and other opportunities available to businesses and their workforces.

In addition to this HCUK training have carried out further research to enhance the initial findings, including desk top research, focussed surveys and in depth interviews with businesses gathering supporting data and supplemental evidence for this report.


Skills Requirement Report Findings and Recommendations

The full results of the survey can be found in Appendix 1. Below, are key findings which have influenced our recommendations for future actions to strengthen the sector.

Sector Summary

The survey demonstrated the following results:

The majority (66%) felt it was very easy, easy or neither easy or difficult to recruit new staff with the correct skill level; 34% said it was difficult, but this was linked specifically to recruiting to the more senior or technical positions.

The number of companies who felt their ability to recruit staff with the correct skills was restricting business growth was split fairly evenly (55% felt it was not restricting growth, 45% felt it was).

Most businesses (76%) did not find accessing appropriate skills training difficult; 24% stated they did have difficulties but did not state why or what training they were looking for.

Just over a third (34%) of businesses said not being able to access appropriate training had impacted their business growth; the remaining 66% stated access to appropriate skills training was not restricting the growth of their business.

The majority of companies are investing in their workforce’s training, with 42.11% offering 6 to 20 days training and 15.79% providing more than 21 days of training.

Almost half (45%) have received funded training.

33% were aware of funded training schemes such as SSW.

80% of the businesses would be interested in finding out more details about funded training.

In addition to the survey, our additional guided interviews demonstrated that:

There is a shortage of staff with higher level skills, both technical and managerial.

Industry image can be a challenge for recruitment and retention; this was particularly relevant for food manufacturing, where the perception can be of shift work and lower wages.

Where staff are recruited with the right qualification, their skill set is not always suitable for the workplace and additional training can be required.

Businesses that work closely with other providers, including providing work experience are generally positive about the experience, and recommend it as a vehicle for recruiting suitable staff.


Skills and Training Requirements

Mandatory and Common Training Requirements

Food manufacturing, manufacturing and engineering are a series of well-established and regulated sectors. Although they continue to innovate, this means they do contain a large number of well-defined job roles and career pathways, which may require mandatory qualifications. Even where the qualifications are not mandatory, there are often pre-defined pathways to gaining the skills required for these roles. For example, a person wanting to become a welder needs to be qualified in welding, and there are specific NVQs available in Welding Skills to support this.

There are also skills and training which will be almost universally required within a particular industry, for example Health and Safety associated training. This can be demonstrated through the training delivered by SSW. In Manufacturing, two key qualifications continue to be Performing Manufacturing Operations and Warehousing and Distribution; these were two of the most commonly delivered qualifications in the Humber SSW 2 contract, with 223 and 193 delivered respectively. SSW delivery for these sectors was dominated by Manufacturing companies, due in part to the skills gaps within engineering companies existing at higher levels, and to many skills requirements in Food Manufacturing being mandatory qualifications ineligible for funding. Popular courses by industry and learner numbers included:

Food Manufacturing Manufacturing Engineering

Award in Food Safety for Manufacturing (25)

Warehouse and Distribution (193)

Diploma in Maintenance Operations (22)

Meat and Poultry Industry skills (31)

Performing Manufacturing Operations (223)

Lean Management (3)

Proficiency in Food Industry Skills (5)

Project Management (3)

Specialisms and Changing Needs

Alongside mandatory and common training needs, there are a breadth of more niche specialisms and skills within the industry. With the increase of automation, skills can become increasingly technical, niche, and fast changing. Although there is still, and will be for the foreseeable future, a need for production operators and shift managers, the technical skills required to maintain machinery and reduce downtime continue to advance:

“Sourcing and recruiting skilled workers and engineers that can not only use but maintain the machinery is very difficult because… the machinery used… [is]


more precise and technical – only someone who has been specifically trained to use and maintain these machines can do so”

There is also an increase in businesses occupying very niche areas, where specific training might have a very high impact for the individual business, but costs of bespoke training can be prohibitive. In this instance, funded or reduced cost training can have a substantial benefit. For instance, the SSW programme has worked with micro business KG Yorkshire to source specially developed training in mould making and pigment mixes, including sourcing expertise from the Netherlands. This has had a significant return for the business, but the costs of developing the training would have been a barrier for them as a micro-business, without funded support.

“Basically what SSW funding has enabled my company to do is not only become a master in such a niche market but dramatically increase our productivity. Initially before the training we had a 3–4 week turnaround to create one pedestal; it now takes us around 24 hours!”

This highlights the importance of support for SMEs, and the value that this training can deliver to businesses. As skills required become more technical, more specialist, and continue to develop as technologies changed, ensuring training remains appropriate to current requirements and supplies appropriately skilled employees will be a challenge for both employers and training providers.

Training Design and Delivery

The results of the survey demonstrate that companies are willing to invest in training their workforce. However as can be seen from the results (45% believe lack of access to the right training is restricting business growth), the training available is not always suited to business needs. These sectors must comply with the requirements of many regulatory bodies and changing regulations / laws, and as such the training required changes over time. For example, the food manufacturing industry in recent years has developed numerous new policies such as Allergen Intolerance and Awareness.

To meet new regulatory and health and safety requirements, businesses must constantly review staff training to make sure they are compliant. When doing this, they should be encouraged to look beyond mandatory requirements and identify all training staff might need. These robust business planning processes can support businesses to future proof themselves and their workforce, and get involved with training providers to ensure the suitability of training that is developed/delivered.

Specialist training is currently available from a variety of sources including FE Colleges, training providers and universities for some higher level coures. The Humber also holds two Universal Technical Colleges (UTCs) which provide technical education in partnership with businesses to young people from 14 years old. Engineering UTC Northern Lincolnshire is based in Scunthorpe, and Ron Dearing UTC specialises in Mechatronics (a multi-disciplinary field of engineering) and Digital and is based in Hull. Specialist training providers offer employer responsive industry standard in work place and full time training, including the Humberside Engineering Techology Association (HETA), a not-for-profit organisation that aims to bridge the gap between industry and education, offering upskilling


courses and advanced apprenticeships, and other training providers in the area deliver sector specific training designed to meet employer demand.

These providers offer a comprehensive range of training and skills options, from full time formal learning to apprenticeships, bespoke courses and in workplace delivery. Additional programmes such as the SSW programme offer funded opportunities for businesses to access training.

“There are no issues with accessing training as locally we have organisations such as HETA, Catch and Grimsby Institutes Technology College that offer the specific training and there are also other training providers that also offer the shorter qualifications such as NEBOSH and IOSH.”

The range of training and providers is a positive. However, particularly due to the technical/specialist nature of some of the courses, training in thse sectors can be comparatively expensive. This is a barrier to businesses accessing training.

Skills Shortages and Recruitment Challenges

70% of survey respondents said it was difficult or very difficult to recruit staff with the right skills. In addition to our network survey, we consulted with local recruitment providers and analysed vacancies to gain a better understanding of the skills gaps they are facing when recruiting in the Humber region and to the engineering, manufacturing and food manufacturing sectors. Employers are facing common skills shortages across many technical routes, and a range of specific job roles:

“Electrical, mechanical, all the practical sides of engineering – we’re short everywhere”

“Engineering is very broad and that there is a huge skills gap with Electrical biased maintenance engineers. The Power Generation industry has a different skills gap as their engineers must ideally be degree qualified. When looking at engineers they need to be qualified, they need to have experience working on highly hazardous assets such as boilers and turbines and there is a shortage in that alone. The issues we face is a massive lack of candidates with the appropriate skills, qualifications and experience needed”

Recruiters interviewed on both sides of the Humber reported a range of common roles that represented hard to fill vacancies. These included:

Engineering Manufacturing and Food Manufacturing

Associated Skills (Mates, Semi-Skilled Operators)

Fabricators

Machinist (Turner and Milling)

Press-brake Operators

Experienced Fork Lift Truck Driver (VNA Licence)

Experienced Manufacturing Technicians

Line Supervisors

Production Managers


Structural Steel Fabricators

UPVC Fabricators

Welders (MMA, MIG and TIG)

Window Fabricators

Electrical Biased Maintenance Engineers

Maintenance Engineers

Electrical Engineers

Mechanical Engineers

Production Supervisors

Senior Shift Supervisors

Shift Supervisors

Food Manufacturing Engineers

However, on the South Bank of the Humber it was felt that these problems were exacerbated by candidates not wanting to travel across the Humber for job roles, unless the salary was particularly attractive. This issue was intensified further for candidates outside the region:

“Attracting candidates outside of the Humber is even harder due to the salary packages in bigger cities and this in turn is affecting growth in this sector in our area.”

Contractors are one method companies are using to fill gaps, however this was also recognised as only a short term fix, as both an expensive and unreliable way to fill roles. Some respondents had found that, as contractors were less likely to be local, many left when they found roles closer to home. The struggle to fill vacancies can have long-term impacts for companies, for example in manufacturing respondents reported that issues with recruiting appropriately skilled staff meant equipment wasn’t always being properly maintained, leading to unplanned downtime even when vacancies were later filled.

Employers also frequently identified gaps in non-industry specific skills, including business functions, team leading and higher level management skills and qualifications. There were issues both with recruiting employees with these skills, and retaining staff in management roles:

“The skills gap we face as a business is staff having management qualifications and we are wanting more and more management qualifications at higher levels…as a business we have a high staff turnover due to wages and the unsociable hours.”

Training at levels 3 and above, which would generally include the management and specialist skills that employers have identified as a gap, are often ineligible for funded programmes. For example, SSW which focuses on training at level 2 and below, with occasional discrete modules of learning at level 3. This means that in order to address the gap, employers and industry as a whole may have to invest more in training internally in order to address the gaps. Supporting existing employees to gain new skills and providing


them with the training and skills to progress will not only address higher level skills gaps, but support retention through investment in staff development opportunities.

Businesses can be reluctant to invest in these skills due to a risk that the employees move on. There could be scope for employers introducing schemes whereby they will pay for training, but if the employee moves on within a certain time frame they will be required to contribute to the costs. This can encourage businesses to invest in the skills that meet business objectives by mitigating risks, and supporting employees to gain new skills / specialisms.

Employers may also want to consider non-traditional routes, e.g. apprenticeships for staff in non-technical roles and at mid/higher levels for technical and non-technical staff. For example, degree apprenticeship standards are available in Control / Technical Support Engineer. Most employers already employed apprentices, or were open to in the future, although this was not always without issues (see below). Some employers also expressed concern about the 20% off the job training requirement and its impact on departments where staffing and retention is already an issue. Training providers need to do more to raise awareness of the benefits of the ‘off the job training’, and the flexible ways that it can be fulfilled.

“When we’re already short staffed I can’t afford for somebody spending time out of the team, even if it’s going to help in the long term. Right now, we’re busy, we’re growing, and we need the manpower”

The sector has inherent challenges in retaining staff, including the prevalence of shift work to support 24/7 production. However, in manufacturing and engineering, as in all sectors, staff retention can be strongly linked to wellbeing, and there are actions employers can take to reduce turnover. For example Young’s Seafood in Grimsby, one of the largest employers in the region and the producer of 40% of the seafood consumed in the UK annually (Source: Food and Drink Federation) has taken proactive steps to address staff wellbeing. They have committed to participation in a Healthy Workplace Scheme in partnership with North East Lincolnshire Council, focussing on physical health mental health, stress and wellbeing, and gaining Gold certification. In doing so, they have reduced absenteeism by more than 50%.

The issues with recruitment in the sectors are exacerbated by the fact that the majority of the workforce continues to be male (WiME estimates that only 11% of the engineering workforce is female). This means that recruitment is limited to only 50% of the population, and that increasing female participation could address issues:

“There isn’t a balance of gender diversity in my sector especially when recruiting engineers, we have no female engineers employed with us”

There are moves to address this, including a comprehensive range of initiatives aimed at increasing participation in STEM subjects at all levels, including retraining schemes and focussed on increasing female participation in the industries (Women’s Engineering Society estimates only 11% of the engineering workforce is female). These initiatives, and the range of training available, are a positive. However, on a practical note means that


interested individuals and businesses cannot always find the most appropriate avenue/scheme, and there are many schemes competing for the same cohort.

Challenges

Brexit

The most common challenge cited by employers as effecting the sector was the upcoming impact and uncertainty of Brexit. The potential impacts have been well documented by all three industries. For manufacturing companies, the EU represents the UK’s biggest market; the UK exports manufactured goods worth over £33bn to Germany, £21.7bn to France, £17bn to Ireland and £13bn to the Netherlands (Source: EEF, The Manufacturer’s Organisation). This means that impacts of a disordered or no deal exit from the EU would likely be significantly and promptly felt, e.g. if it were to generate additional paperwork or border checks. Although the extent of these impacts are currently known, the uncertainties are affecting business decisions and consumer confidence.

“[risks with] sustainability of products and consistency of supply are obviously something that is widespread across manufacturing and supply chain. Whether they [companies] are going to have to rationalise their suppliers because of Brexit is something they are going to have to wait it out for and see how that will affect them”

Exacerbation of existing staffing shortages is another key risk being flagged by business. EU workers represent a significant proportion of the workforce in all three sectors. 24.3% of food industry workers are EU nationals (Source: Food Manufacture.co.uk), along with 7.7% of engineering employers (Source: Engineering UK) and 11% of the manufacturing workforce (Source: ONS). Although the UK government’s plans for a skills based immigration system will hopefully mitigate these negatives, it is likely that this will take some time to operate effectively and meet the gaps, whereas the impact of Brexit on a reduction in applications and a return of workers to the EU is already being felt. Likewise, reforms are being implemented to create a new generation of skilled and qualified workers, but the timescales of reforms to the impact of them does not address shortages in the immediate. If the new immigration rules implement proposed requirements (i.e. salary of £30,000 required for a skilled visa) will be large shortfalls in worker numbers as many roles within these industries are paid significantly less than this sum.

Suitability of New Employees

When asked, companies were generally positive about the range of routes into jobs. The majority employed apprentices in a range of roles, including business supportive functions, and felt that apprentices added value to their business. However, experiences were not universally positive, and some employers felt that new employees coming into work from college and as apprentices did not always have the right skills, even where they had the required qualifications. This included general workplace skills e.g. punctuality and attendance, and technical skills e.g. the ability to do the tasks required, even where they held a qualification:


“Its interest and common sense [that we need]. People can have all the qualifications, but not on the ground skills. They have all the theory from school but if you haven’t got the practical experience until you’re in the workplace you’re not really learning the right skills. We have apprentices all over the business. Some are great, and we’ve taken others on as apprentices after work experience. But they’re hit and miss. If we take on 5 some of them just aren’t site ready, and we can’t watch them all the time”

“Apprentices are not ready for the level of roles that we have and won’t be ready for another 4 to 5 years due to the experience gap. There is no succession planning which in my opinion is really needed for example in a company when an employee is coming towards retirement, they should be bringing in an apprentice to work with them earlier to learn all the skills needed to replace that employee and be better prepared”

Many employers were not aware of the upcoming T Level and skills reforms that would affect qualifications and routes into the sector for employees in technical roles. T Levels as a method of driving up standards within technical studies, and increasing the work readiness of students is likely to have a significant work place impact. The substantive work placement of 315 hours in a relevant, industry related role will ensure that students qualifying with T Levels have had experience in a working environment.

The successful delivery of work placements at this length, and the scale required in the implementation of T Levels, requires time investment from employers and partnerships between training providers and employers. However, the potential positive impacts for employers that offer work placements are significant. Employers who are engaging with the forerunner to T Level work placements this academic year are reporting the benefits, including the ability to trial a student before potentially offering them a full time role, and getting a work ready candidate without needing to invest large financial sums in training. Gallagher Engineering, who have offered one work placement this year with plans to increase the number next year said:

“[the student] has excelled from the first day of placement and has taken the opportunity in his stride. He has been able to participate in the production of metal plates for mechanical components whilst being given the appropriate understanding of health and safety within the workplace. He has become a very well integrated team player… [we] are delighted to have been able to have this learner as part of the team, with no financial investment beforehand…[he] will be given the opportunity to become a full time apprentice.”


Recommendations

Overall the findings of the sector report are positive. They show that many employers feel they can recruit staff with the correct skills, and attitudes towards local growth in the sectors are positive. The majority of organisations also recognise the importance of training, and are providing training to staff to help ensure their skills remain up-to-date.

However, there are skills shortages at a senior level and for specific technical roles, and a significant number of employers feel that their growth is impacted by specific skills shortages. One of the biggest challenges highlighted, and which will exacerbate skills shortages that already exist, is an ageing workforce within the sector. There are also additional challenges beyond skills shortages, such as recruitment issues intensified by image of the sector for food manufacturing.

Addressing these challenges and gaps effectively will be vital to support continuing sector growth. In order to do so, companies need to undertake effective and realistic succession planning, to project future gaps and upskill staff to take the place of staff who may retire, change roles or be promoted, or change companies. This could incorporate a range of measures to increase recruitment including using apprentices, offering work placements and engaging with sector initiatives to diversify recruitment (e.g. WiME). It should also involve internal upskilling. Companies will benefit from identifying specific skills that employees hold prior to retirement or moving on, and ensuring these are passed on to other staff members e.g., through mentoring or training.

Addressing the hard to fill vacancies within the supervisor roles e.g. Line Supervisors, Production Managers and Shift Supervisors are viable where upskilling existing staff is an option. Funded training such as Business Improvement Techniques and LEAN Management which cover managing risk, reducing waste, increased productivity and management of staff can be accessed through programmes such as SSW. The multidiscipline fabricator and engineer roles are notoriously difficult to recruit to due to a lack of qualified staff compared with the volume of vacancies across the industry. Workers are obviously attracted to higher salaries but that may not be a possibility for some companies. Employers should consider promoting their workplace culture and company identity as well as looking at the benefits package they can offer. This deeper understanding of the company could be more appealing to applicants.

Appropriate and effective CEIAG to students can increase awareness of the sectors and opportunities available, and help get more young people into the sector. This works best if employers engage with schools in the provision of careers information, as can be demonstrated in the positive links between the UTCs and businesses. This can also help dispel some of the sector image issues, by showing that there are a full range of roles available within the sectors. The examples set by best practice within the sector, e.g. Young’s Seafood, also demonstrate that high turnover and absenteeism are not inevitable, and that with the right support for staff, retention within the industry can be high.

Where companies have identified barriers to recruiting apprentices, training providers can work to dispel misconceptions, such as around the 20% of the job training requirement. Employers and education / training providers can also work together to ensure that students


are gaining the skills employers value alongside their qualification, and are more ‘workplace ready’. T Levels represent a valuable opportunity to do this, and employers who engage with providers of T levels from the first roll out will have the best opportunity of both shaping provision, and using the substantive work placement as a pipeline to recruiting work ready, quality candidates. As many employers were unaware of the upcoming introduction of T Levels, there is work for training providers to do to raise awareness, highlight what they will mean for businesses, and promote the positive feedback from employers already engaged in work placements.

There exists a range of quality local programmes available providing training and opportunities to meet local needs, including the Humber Business Growth Hub, Manufacturing for Growth and SSW. For example, the Growth Hub offers free advice, support, and signposting to business resources for companies across the region including pre-start-ups and SMEs. These initiatives should continue to work to raise their profile and awareness of their offer within the sector, and companies should maximise their use of the resources available. Many companies are recognising the importance of softer, management, and business focused skills (e.g. team leading training), and continuing to invest in this will be a benefit to the sectors.


Legacy

This project has increased awareness of the work being undertaken within the Humber, both by the Humber LEP and other funded initiatives and projects across SMEs within the region’s engineering, manufacturing and food manufacturing sectors, particularly with survey respondents who were not previously aware of programmes such as SSW and Manufacturing for Growth. This presents an opportunity for new businesses to engage with the projects and benefit from training available.

While no new qualifications or curriculum or new ways of working have been developed for the sector through this report, a range of bespoke courses have been created through SSW which have been accessed by sector SMEs previously, and will continue to be. These address both technical gaps, e.g. ‘Technical Laser Alignment’, and focussed business skills, e.g. ‘Implementing and Sustaining Change in Your Business’ (full list is at Appendix 2).

There is a clear opportunity to establish a network of employers within the area to develop support and advice for local educational establishments and work with them to drive progress, particularly with the upcoming introduction of T Levels. Levels of interest and awareness for all local business initiatives could be tested through additional surveys and employer engagement, building on work done for this report. This could be linked with specific events and activities, including holding LMI awareness raising days focused on new and emerging technologies and participation in existing industry events.


References and Contributors to Report

If not already listed or mentioned in the report, please list all reference material and contributors towards compiling this report.

Humber LEP Review of The Humber Strategic Economic Plan July 2016

www.Humberlep.org

Humber LEP Strategic Economic Plan 2014 – 2020

www.Humberlep.org

University of Hull – The Anchor Institution for our Region 2013/14

LMI Humber

www.lmihumber.co.uk

The Humber.com

SJP Law Commercial

www.Sjplaw.co.uk

Office for National Statistics

www.ons.gov.uk

Parliament Research Briefings: Manufacturing: statistics and policy

http://researchbriefings.files.parliament.uk/documents/SN01942/SN01942.pdf

Local Authority Websites

www.eastriding.gov.uk

www.hull.gov.uk

www.northlincs.gov.uk

www.nelincs.gov.uk

Inter Department Business Register

www.ons.gov.uk

Humber LEP Website

www.Humberlep.org

GVA Growth in Humber Economy (Briefing note for Local Enterprise Board 2016 Document))

www.Humberlep.org

Food and Drink Federation

www.fdfworld.com/

University of Hull – City of Culture Evaluation Document

www.hullac.uk


http://www.hullac.uk/

http://www.Humberlep.org/


http://www.ons.gov.uk/

http://www.nelincs.gov.uk/

http://www.northlincs.gov.uk/

http://www.hull.gov.uk/

http://www.eastriding.gov.uk/

http://researchbriefings.files.parliament.uk/documents/SN01942/SN01942.pdf

http://www.ons.gov.uk/

http://www.Sjplaw.co.uk/

http://www.lmihumber.co.uk/



Food Manufacture

www.foodmanufacture.co.uk

Engineering UK: 2018 Snapshot Survey

www.engineeringuk.com

EEF (The Manufacturer’s Organisation)

www.eef.org.uk


http://www.eef.org.uk/

http://www.engineeringuk.com/

Appendices

Appendix 1: Skills Survey

1. How Many Employees do you have?

2. How difficult do you find it to recruit staff with the right level of skill?

3. Is sourcing staff with the correct skill level restricting your business growth?


9%

52%

21%

18%Emp 0 - 5

Emp 6 - 10

Emp 11 - 49

Emp 50 - 99

Emp 100 - 250

12%

18%

39%

30%

Very easy

Easy

Neither easy nor difficult

Difficult

Very difficult

42%

58%

Yes

No

4. How difficult do you find it to access appropriate skill training for your workforce?

5. Is the lack of accessible skills training restricting your business growth?

6. What level of skills training have you provided to your workforce in the last two years?


3%

18%

55%

18%

6%Very easy

Easy

Neither easy nor difficult

Difficult

Very difficult

33%

67%

Yes

No

30%

21%9%

6%

33%

0 - 5 Days

6 - 10 Days

10 - 15 Days

15 - 20 Days

20 plus Days

50%50%Yes

No

7. Have you accessed any funded training to develop your workforce in the past two years?

8. Are you aware of SSW funding?

9. Would you be interested in finding out more details regarding funded training in the Humber area?

10.What business sector do you belong?


33%

27%

39% Manufacturing

Food

Engineering

33%

67%

Yes

No

83%

17%

Yes

No


33%

27%

39% Manufacturing

Food

Engineering

Appendix 2: Bespoke SSW training

Bespoke training sourced and developed for the Engineering, Manufacturing and Food Manufacturing industries through SSW:

Interpretation of YSI testing

Bespoke maintenance of new machine

Becoming food ready

Introduction to Solidworks

Introduction to understanding Revit

Intro to CNC & CNC 3

Alphacam – bespoke software programming

Overview to Team Evaluation and Project Planning

Allergen and Safety Management for SME’s within Catering

Customer Service for Refrigeration & Air Con Engineers

How to raise prices with existing customers

Internal Auditing

Air Tightness

Cleaning and Waste Management

Stock Management

Profit from your catering operation

Laser Alignment Technical programme

Implementing and Sustaining Change in your Business

Introduction to Robotics

Margin Matters’ & Profitable Contract Management

Quality Assurance – Developing a framework for your organisation

Further Robotics

Roles and Responsibilities for Managers in Heavy Engineering

Introduction to Hydraulics

Increasing profit margins through waste management

Use by and Best Before Versus Food Wastage in the UK and Global Economy

Rotacasting and Machine Operation

Articole Mould making, material mixing and formulas


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