Over the last few months in my conversations with other businesses, of all the challenges they currently face, uncertainty is high on the list. This is also true of my own business. Uncertainty in the global economy, uncertainty in the UK economy driven by Brexit, uncertainty about changes in legislation, uncertainty about new technology and how it will affect industry, and uncertainty about employment and closing the skills gap – these are just the start of a growing list.
The bottom line is that uncertainty often leads to a short-term focus. Companies are shying away from long-term planning in favour of short-term results, with uncertainty often cited as the reason. Whilst this might feel right, longer term planning remains crucial to improving productivity, in order to be competitive. The problem to solve, therefore, is to balance the need for a more reactive, short-term focus with the need for informed, long-term planning.
Longer term planning is not just about capital investment plans or incremental improvements through operational expenditure, it is also very much about the workforce.
At Flender, a Siemens company based in Leeds, we recognised some time ago that our workforce demographics would, if not addressed, result in shortfalls in skills in the medium term.
The Leeds Chamber of Commerce says that Leeds City Region is home to the largest manufacturing sector outside London, employing 127,000. In Leeds some 1,800 firms employ around 26,000 people in manufacturing, making the city the third largest centre for manufacturing by local authority area in the country.
Yet, at the same time, Make UK (formerly the EEF) says 60 per cent of manufacturers in Yorkshire and Humberside have found it difficult to fill engineering job roles, with over 70 per cent claiming these difficulties were due to an insufficient number of applicants, or applicants lacking the right technical skills. Ironically, eight in ten manufacturers are taking action to retain highly skilled employees by offering competitive salaries and opportunities to work across the business, whilst 77 per cent are offering apprenticeships and almost 60 per cent expect training spend to increase within their businesses.
Manufacturing is a major driver for UK innovation and exports, accounting for 72 per cent of business R&D and over 50 per cent of UK export earnings, according to Make UK. Manufacturing productivity is higher than in many other sectors of the Leeds economy, generating 11 per cent of output although the sector accounts for only 8 per cent of jobs.
A skills gap is the difference between skills that employers want or need, and skills their workforce offer. Conducting a skills gap analysis helps identify skills needed to meet your business goals. It can also inform your employee development and hiring programmes.
As technology advances at such a significant pace, it’s true to say that some of the job titles of the future are as yet unclear. Industry 4.0, artificial intelligence and digitalisation all present huge opportunities as well as challenges. The workforce of the future must be equally as adept in the virtual world as the physical. Data and data analytics will be the new currency.
Graduates are great but carefully chosen apprentices have proven to also provide an equally rich return on investment in the next generation of employees. Many of our apprentices are now in first line management roles or are playing very active operational roles, helping us bridge some of tomorrow’s problems today.
We have some excellent schools in the Leeds City Region and Leeds also now has its own specialist technical college, brought about by collaboration between several of the city’s leading manufacturers and employers along with support from the University of Leeds.
UTC Leeds opened its doors in September 2016, and it specialises in engineering and advanced manufacturing. It is the city’s first university technical college, providing places for pupils aged 14-19, and is bringing through the next generation of engineers, skilled technicians and scientists.
This year has seen 39 per cent of Year 13 UTC Leeds students go on to apprenticeships, with companies like Unilever, Coca Cola and VW; 37 per cent have gone on to higher education; 12 per cent to further education; and 10 per cent on to direct employment. As a manufacturer, we strongly support the great work this college is doing.
I’m especially proud that one of our new Siemens apprentices last year came from the UTC, part of its first output of appropriately skilled students for tomorrow’s workplaces. After all, these young students will shape the future – for all of us.