Seismologists may soon be reporting a large tremor emanating from the unlikely source of London, SW1 as the contents of this report hit the new business secretary's in-tray.
Sorry Sajid Javid. Your aides may have indicated the manufacturing skills gap was already actioned in the departmental debrief, but the inconvenient truth is that the chasm in available talent runs deeper than ever.
An astonishing 88% of respondents to WM's People and Productivity report persistent skills shortages. That's up from already seismic levels of 82% in 2014 and 75% in 2013. All the while civil servants seem to be doing their best impression of Comical Ali, Saddam Hussein's myopic information minister who proclaimed there were no American tanks in Bagdad as the gun turrets of US Abrams rumbled into view.
The Department for Business Innovation & Skills' (DBIS) recent offerings include press releases titled 'on target for a higher skilled workforce' where skills minister, Nick Boles claims:"These figures [more than 20,000 higher apprenticeship starts] show we are on course to create a modern and competitive workforce that boosts the country's productivity and prosperity."
The skills drought that simply won't go away
Not any time soon according to our research. More than 60% of manufacturers say skill shortages hit their bottom line in the last year with a quarter of businesses regularly seeing production lines run silent because they simply can't find the right engineering expertise.
A dearth of experienced engineers and skilled shopfloor operators is where our grassroots site managers say they are being hit hardest. These two roles demand tacit knowledge that can't be taught overnight-no matter how willing the apprentice. Alarm bells must ring that there has been no easing off of in skills shortages in the five year history of WM's People and Productivity report. For all the bold policy pledges of the now departed Coalition government, very little relief seems to have reached the rank and file.
Just 17% of respondents reported an improvement in access to skilled employees in the past year. A third said the situation had worsened and around a half reported no noticeable change. So prolonged is the drought that it has sent many into a fit of despair. Around 42% of factory managers donned metaphorical sandwich boards and proclaimed the sector is always doomed to suffer a skills problem.
However, there is hope. An equally-sized cohort of more optimistic manufacturing managers (42%) said they do expect skills shortages to finally subside within the course of the next parliament. Expectant eyes are being cast towards Westminster for the first rains.
'Please sir, can I have some more?'
More sweeping support and public commitment to UK manufacturing from ministers could end skills shortages according to 80% of respondents. The Coalition claims to have started the process. A host of handover documents have appeared on the DBIS website, of late, listing the former government's achievements in office.
These include a 2010 to 2015 policy paper on public understanding of science and engineering, which proclaims feats such as a National Science and Engineering Week and funding STEM engagement programmes in schools (http://tinyurl.com/o2matcu).
Still, our respondents hanker after something more: "More UTCs", "The offer of a good engineering education" and "embed STEM skills into the national curriculum at infant and junior schools" summed up the wishlists. Respondents also urged greater financial incentives from the government to bridge the skills gap. Around 60% backed subsidised tuition fees to encourage students into engineering degrees and 60% favoured government tax breaks in return for apprentice recruitment.
The issue of apprenticeships highlights the rift between government rhetoric and industry reality more than any other. Ministers chase totals with all the zeal of an Australian opening batsman. DBIS press releases proclaim two million apprenticeship starts in the last parliament, three million planned for this.
However, it is the quality rather than the quantity of apprentices that matters most among survey respondents. Around 35% said the poor quality of apprenticeship applicants was the biggest deterrent to hiring more.
Time is another constraint."There is a limit to how many [apprentices] can be managed," bemoaned one survey respondent of the practical challenges behind the headline numbers. "There is a lot of additional managerial overhead if there's no person dedicated to looking after them," said another. Resource constraints are indicated by the fact just 16% of our respondents plan to recruit more than three apprentices.
Never before have the few given so much
The productivity element of WM's People and Productivity report might best be described as the yin to the people sections' yang. UK manufacturers might lack sufficient skilled employees, but the ones we have are immensely productive. Around four in ten respondents report workplaces where at least 70% of their employees are engaged (defined as emotionally connected to the business and applying discretionary effort to the job). In contrast, the average UK employer can count on 11% of its employees meeting the engaged criteria according to training consultant and report sponsor, Festo.
Nearly 85% of sites say they have seen high employee engagement translate into improved business performance. The rest of UK plc would queue out the factory gates to get their hands on such a productivity enhancing elixir, right now.
For the UK's overall labour productivity (defined as the quantity of goods or services produced per unit of labour) is down 16% on pre-recession levels. Economists have dubbed the shortfall the UK's Productivity Puzzle (http://tinyurl.com/nsb3thz).Two theories have immerged behind the cause. The first that this is a cyclical slump: as demand recovers, employee output will rise and send the productivity curve north. The alternative diagnosis suggests a more complex cause involving inefficient allocation of resources and capital investment by businesses.
Immune to the strange outbreak of unproductivitis
Manufacturing offers a fascinating case study as economists seek the answers. The sector has achieved productivity levels, based on output per hour, of double the rest of the economy since the 1940s according to EEF research (http://tinyurl.com/p8uk2wc). It's a survival trait founded on lightning quick reflexes and an enlightened managerial-style.
Adopting the principles of lean, kaizen and Six Sigma has inoculated many against the productivity drain. It's hard to catch a cold when you're constantly on your toes seeking improvement. Around 60% of our respondents said change programmes are constantlyor frequently carried out on site.
The majority rated themselves as highly proficient in leading such initiatives. Employees are also expert with 44% classed as 'receptive' to change. Of course, even the experts can have their off days: fear of the unknown or a lack of personal reward were cited by respondents as the biggest barriers to progress among change resistant employees.
On the whole, though, WM's People and Productivity report shows manufacturing businesses as beacons of labour productivity. As such, manufacturing may just hold the secret to beating this nasty outbreak of unproductivitis afflicting other corners of the UK economy. Of course, we'll happily assist in the quest for a cure. In return, we ask just ask one small favour, Mr Javid:more help convincing the great British public of the merits of a career in manufacturing.
Methodology: The WM people and Productivity report in association Festo was completed by 95 site managers from firms employing 1-49 staff on site to those employing more than 500. Respondents were drawn from sub-sectors including automotive, food and drink, plastics, textiles and electronics.
