The EEF say business leaders must implement retraining schemes in key development areas such as AI and digital innovation and do so quickly, to combat the shrinking talent pool.

Only 32% of manufacturers surveyed had a workforce plan (a plan with measurable actions that align the changing needs of the business with their people strategy) in place, while almost two-thirds (64%) did not.

The report also reveals that 69% of those surveyed said that the adoption of new technologies and techniques is driving the priorities of their workforce plan, while nearly half (44%) said that the introduction of new products is the main driver for change in workforce practices.

To secure the skills they need for the future, an encouraging 72% of businesses revealed that they are introducing or continuing to run formal apprenticeships, while half (48%) are revising their recruitment strategy to recruit workers from other industries and sectors with transferable skills.

Others are introducing or continuing with popular graduate programmes to grab the best potential talent while just over a quarter (26%) are revising their workforce plan.

Flexible ways of working have already been adopted by all but 15% of manufacturers to non-production employees and 7% to their production employees, which has helped to retain existing employees (74%) and attract prospective employees (56%).

Tim Thomas, director of employment and skills at the EEF, said: “Manufacturers are facing both a turbulent but also revolutionary time. Brexit is now on the horizon, bringing with it challenges around access to people. Planning for these changes is vital, yet only a relatively small number of manufacturers have a workforce plan in place.

“Planning is crucial not just to prepare for these challenges but also to take advantage of future opportunities. Technological change has the potential to radically change the workplace in ways never before seen. People will be at the heart of this, adapting not only to new ways of working, but also to new work, requiring a step change in the way employers train their workforce and deploy their skills.

“Manufacturers have over time proved themselves to be adaptable, innovative and resilient. They have the tools and talent to make to make a success of the rapidly changing work they face, but they need government’s backing in creating the right business environment and developing policies within which they can thrive.

The full report can be found on the EEF website.