Manufacturers find recruitment challenge easing slightly - Make UK’s Q3 HR Bulletin

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While the employment picture is on the whole looking a little healthier, manufacturers are still facing the long-term skills challenges which have held businesses back from growing to their full potential for the last few years, according to Make UK’s Q3 HR Bulletin.

Key findings:

  • 88% of manufacturers attempted to recruit new staff in Q3 – the largest number so far this year.
  • Just over 1 in 5 businesses were able to fill all of their available vacancies – slightly down on Q2.
  • But more than 35% of businesses were able to fill most of their vacancies. Less than 2% were unable to fill any roles – a significant improvement on previous quarters in 2023.
  • The proportion of businesses unable to fill vacancies because of an insufficient number of applicants is much lower than in Q2 – those citing a lack of candidates with the right technical skills has increased on earlier this year.
  • Highest portion of companies (22.7%) settled pay increases at 5% but a high portion (14.1%) gave 6% and above because of competition for staff with the right skills.

Some 61.7% of companies told us that a lack of candidates available with the right technical skills needed for the role was the main reason they were unable to fill a position.

As a result, the majority of companies who pay the levy want to see reform of the apprenticeship levy. In its Autumn Statement submission Make UK has called on the HM Treasury to ringfence unspent levy funds to create an Employer Training Fund to allow firms to spend these funds on much need upskilling and retraining outside of Apprenticeships.

SMEs who are outside of the scope of the levy would like more financial support from government – whether through direct funding of training or targeted incentives for specific apprenticeships to enable them to access more skilled staff.

HMRC data indicates that £3.6 billion was collected from businesses to fund apprenticeships last year – this is almost £1 billion more than the apprenticeship budget for England. This surplus cash should be released so it can be used to pay for the additional levy asks companies so desperately need.

Jamie Cater, Make UK’s Employment policy lead said:

“While manufacturers report an easing of immediate labour shortages, long-term skills challenges remain. As apprenticeship starts continue to fall, employers’ frustration with the apprenticeship levy grows; HMRC reports that around £3.6 billion was collected from UK employers last year, yet the amount available to spend on apprenticeships in England reaches only £2.7 billion next year.

“Manufacturers want the money they’ve paid for apprenticeship training to be used for its intended purpose. That is why Make UK is calling for surplus funds to be used for targeted financial incentives for apprenticeships, helping employers to recruit the apprentices they need.”