Advanced Manufacturing and Engineering Skills
Analysis for Coventry, Warwickshire, Hinckley and
Bosworth
A Report to Coventry and Warwickshire LEP
Contents
Executive summary .............................................................................................. i
1.0
Introduction ........................................................................................... 1
1.1
1.2
1.3
Scope of the Research ............................................................................................... 1
Research Approach ................................................................................................... 2
Structure of the Report .............................................................................................. 3
2.0
Growth Sectors and Advanced ‘Engineering’ ..................................... 4
2.1
2.2
2.3
2.4
Introduction ................................................................................................................ 4
Industrial Policy and a Focus on Key Growth Sectors ........................................... 4
Advanced Manufacturing and Engineering.............................................................. 5
Sectoral Strengths in Coventry and Warwickshire ................................................. 8
3.0
Stakeholder Consultations ................................................................. 10
3.1
3.2
3.3
3.4
3.5
3.6
Introduction .............................................................................................................. 11
School Engagement: Awareness and Knowledge of Engineering ...................... 12
Vocational Learning, Apprenticeships and Practical Experience ........................ 13
The Suitability of Higher Education Courses and the Role of Employers........... 14
Up-skilling the Existing Workforce: The Role of Mentoring ................................. 16
The Short-term Importation of Engineering Skills ................................................. 16
4.0
Engineering Employer Survey ............................................................ 18
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Introduction .............................................................................................................. 19
Sampling ................................................................................................................... 20
Company Background ............................................................................................. 21
Employment .............................................................................................................. 26
Skills Gaps and Shortages ...................................................................................... 27
Engagement with Training....................................................................................... 31
Vision, Strategy and Forward Planning .................................................................. 35
Future Skills Requirements ..................................................................................... 36
Business Performance............................................................................................. 37
5.0
In-depth Employer Consultations ...................................................... 41
5.1
5.2
Introduction .............................................................................................................. 42
Companies Involved in the Interviews.................................................................... 42
5.3
5.4
5.5
5.6
5.7
School Engagement ................................................................................................. 43
Perspectives on Apprenticeships and Vocational Learning ................................ 45
Course Design and Delivery .................................................................................... 47
Workforce and Skills Needs .................................................................................... 48
Additional Aspects for Consideration in Light of the City Deal Bid .................... 49
6.0
Implications of the Study .................................................................... 51
Executive summary
1. Research aims
Coventry and Warwickshire Local Enterprise Partnership (LEP) commissioned Ecorys to undertake
primary and secondary research on the current and future skills requirements of engineering employers in
the three spatial areas of Coventry, Warwickshire, and Hinckley and Bosworth. The study had a dual
purpose. Firstly, findings were intended to inform a City Deal bid submission, led by the LEP and under
preparation at the time of the research in early 2013. Secondly, the study aimed to serve a longer-term
function by informing the development of a skills strategy for the LEP.
2. Research methodology
The methodology for the research involved the following elements:
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Desk research reviewing relevant data sources, LEP reports, and other relevant research and
analysis. In preparation for the employer survey, this also involved agreeing a suitable definition of
the ‘advanced manufacturing and engineering sector’ based on a selection of 30 Standard Industrial
Classification (SIC) codes (2007).
Face-to-face and/or telephone interviews with a selection of 18 key stakeholders, including
representatives of employer organisations; training providers; schools, colleges and higher education
institutions; and national and local Government.
A telephone survey of 113 advanced manufacturing and engineering employer representatives.
Subsequent in-depth telephone interviews with 20 employer representatives from the local advanced
manufacturing and engineering sector.
3. Summary of key findings
The following sections summarise the key findings from the stakeholder interviews, survey of employers
and in-depth employer consultations in turn.
3.1 Stakeholder interviews
A series of consistent themes emerged from the interviews with key stakeholders. There was widespread
concern that difficulties in ensuring an adequate supply of employees with appropriate skills were
negatively affecting the competitiveness and potential success of engineering companies in the locality.
This was seen as an issue linked to the perceived lack of promotion of science, technology, engineering
and mathematics (STEM) subjects in schools allied to a broader lack of promotion of engineering and
associated professions to school aged children. There was also criticism of the quality and relevance of
careers advice provided to school and college leavers. As a result of these factors, stakeholders
commonly raised a number of suggestions to improve this situation. These included:
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Encouraging earlier and greater engagement with science and technology amongst pupils
Encouraging local employers to engage with schools to provide presentations, practical activities and
workshops for pupils.
Offering work experience placements in local engineering companies for teachers.
Concerns were also raised in relation to post-school education and training. While there was support for
the Apprenticeship Programme, the nature of the sector and its needs led some stakeholders to argue for
the adoption of a different and/or additional delivery model that would facilitate the sharing of apprentices.
More consistent issues and concerns were raised over a perceived lack of practical experience and
i
associated skills amongst newly qualified graduate engineers - in particular, relating to the application of
theoretical knowledge to ‘real life’ problems. The importance of graduate engineers leaving their degree
course with a strong understanding and knowledge of basic engineering principles and their applicability
to a work environment was thus noted. This was seen by some as implying a need to re-consider course
design to ensure a focus on these principles and their real world applicability, along with making sure that
degrees have a strong (and possibly compulsory) work-placement component.
Given the issue of the sector having an ageing workforce, a number of stakeholders also raised the
importance of considering succession planning as part of ensuring continued competitiveness and
success. In part this reflected a concern amongst some that the importation of technical engineering skills
from abroad could only provide a short-term and immediate solution to skills supply issues. As such,
ensuring both the supply of new domestic entrants to engineering companies and providing training and
development for the existing workforce were seen as important. The potential of mentoring programmes
and of using experienced engineers in a teaching capacity were commonly raised in this context. In
addition, it was felt that experienced individuals could be encouraged to engage with local education and
training providers, facilitating awareness of the engineering profession and offering talks, presentations
and sharing practical experience.
3.2 Employer survey
Almost two thirds of the 113 companies surveyed employ fewer than 10 staff, with a further 31%
employing between 11 and 49 staff. Only 10.6% employed more than 50 staff. Despite this
preponderance of micro- and small-firms, a high proportion of respondents reported a turnover in excess
of £10million. Company occupational profiles were dominated by three classifications: Managers and
Senior Officials (26.2%), Skilled Trades (21.2%) and Process, Plant and Machine Operatives (19.4%).
In terms of skills needs, almost one third (30.1%) of companies stated they were suffering from skills gaps
and/or shortages. Respondents (particularly from firms employing less than 10 staff) were also quick to
point out the lack of new entrants with multi-disciplinary skills; graduates were reported to focus on one
discipline within engineering and to have limited knowledge of related activity. In line with this a lack of
traditional engineering and trade skills among new recruits in the industry was commonly identified.
Accepting this general picture around issues with skills supply, the relative importance placed on skills
gaps and shortages appears to differ significantly between large corporates and smaller firms. For the
former, recruiting highly trained and qualified engineers appeared to be an issue leading some to recruit
from abroad. For smaller companies, skills issues more often related to leadership and management
along with skilled machinists and operatives.
Overall, the main skills gaps identified were around leadership and management, particularly in relation to
export markets; promotional activity; IT usage; product design and development; software programming
and operating systems programmers. More technical skills gaps were identified within electrical,
structural, mechanical and manufacturing disciplines with particular requirements in metrology and
robotics. Amongst companies further down supply chains, requirements for Computer Aided Design
(CAD) technicians and multi-skilled machinists were identified, with the latter being a significant issue for
many. Echoing the views of stakeholders noted above, importance was placed on recruiting new
graduates or industry entrants with a strong foundation in engineering and technical competence.
The survey also found that companies were taking action to address skills gaps and development needs
within their workforce. Of the 113 firms surveyed, 85.8% had undertaken training activity in the last 12
months. Of these, the majority (78.4%) delivered at least some training through internal staff. Accepting
this it was clear that, compared to other sectors, a higher proportion of engineering companies utilise
external training provision, reflecting the requirements of the industry. In terms of the nature of training,
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just under two thirds (60%) of firms had delivered or facilitated formal training, while for 37% the training
involved was more informal or ‘on the job’. Satisfaction levels with training were typically high across the
firms surveyed. Respondents were also questioned on barriers to training. The most commonly cited
were lack of local courses, lack of customised and responsive training and the cost of courses.
When asked about the future skills requirements for their company and for the wider local economy as a
whole, the most common responses centred on five main areas:
► Technical and sector specific skills, including engineers, hardware and software designers,
metrologists and robotics
► ICT, particularly within management and supervisory roles
► Management and Leadership with an emphasis on business acumen, market awareness,
marketing and promotional activity and financial management
► Machine operatives (a particular issue for smaller firms)
► Practical industry experience.
3.3 In-depth employer interviews
Informed by the findings of the earlier key stakeholder interviews and employer survey, the in-depth
consultations with employer representatives were used to investigate current and future willingness to
engage with schools, views on apprenticeships, perspectives on degrees and graduates, and skills
needs. Representatives were also asked to suggest issues that they felt the City Deal should focus on.
In terms of school engagement, there was a fairly even split between representatives whose companies
engaged and those that did not. Those that did typically provided work experience placements, gave talks
or presentations and/or attended careers evenings. Smaller firms were less likely to engage with schools
due to limited resources and capacity. There was also a concern that insufficient value is placed on
manufacturing and engineering by schools and/or that teachers and careers advisers had limited
knowledge of the sector. Wider cultural factors around the (low) prestige and value given to engineering
in the UK were also acknowledged. Suggested improvements included: earlier engagement of pupils in
‘hands-on’ engineering activities; getting employers involved in teaching; more site visits to observe
industry in practice; and greater value being ascribed to vocational qualifications and apprenticeships.
Despite this latter suggestion, experiences amongst companies taking on apprentices were mixed. This
was largely due to some apprentices leaving prior to completing their full term and/or a perceived lack of
commitment amongst those taken on. Employers who had taken on apprentices cited advantages such
as an ability to train people ‘on the job’, addressing recruitment and skills needs, and providing cost
effective ‘instant labour’. Reasons for not taking on apprentices included the time required to train them,
the expense involved, the specificity of the skill set required and a perceived lack of incentives to do so.
The most common suggestion for increasing engagement with apprentices involved greater provision of
financial incentives to firms and / or support with costs.
In terms of higher qualifications, perspectives were split between those who felt that degrees were not of
the requisite quality, and those who were broadly content with the quality of degrees but who questioned
their limitations in terms of providing practical skills. More broadly, there was widespread agreement that
graduates lack the practical skills required. Re-designing courses to include a more practical focus was
seen as the key change required. Ensuring that qualifications required ‘more time on the shop floor’ was
also seen as important, as was integrating a year in industry into more (or all) courses. The view that
employers should be encouraged or incentivised to engage in the design and delivery of courses was
widespread. However, willingness to provide work placements varied, with a slight majority unwilling to do
so at the moment due to the resources required allied to the challenging economic times.
iii
The primary weakness discussed in relation to firms’ current workforce and that of the wider sector
concerned gaps in the recruitment and retention of skilled manual / technical workers. Future skills needs
tended to relate to the focus of the business concerned and included: machine operating skills (including
automatic machinery skills), CAD, welding, software design, and the skills required to turn prototypes and
designs into actual products. Where broader skills requirements were discussed, these tended to relate
to problem solving, practical manufacturing ability and greater integration of computer and engineering
skills. Mentoring and succession planning were widely seen as vital to the future growth of the sector.
However, barriers identified to this included a wider lack of focus on, and valuing of, engineering as a
career, relatively low pay, and the commitment and skills required for mentoring itself.
Other aspects raised for consideration in respect of the City Deal included: the development of a larger
and more specialised technical college, a focus on promoting entrepreneurship, running schemes to
engage young people in vocational courses, developing specific courses to prepare people to manage
SMEs in the sector, developing a sector based forum for local companies, launching a dedicated website
advertising local jobs, and promoting the City Deal itself to a higher degree than at present.
4. Implications of the research
In light of the findings presented above, a number of key implications arising from the research for
consideration by the LEP and other interested stakeholders can be summarised as follows:
1. A focus on ensuring the long term sustainability and competitiveness of the sector is required. This is
likely to start from a concentration on enhancing the supply of future skills through improving the
engagement of businesses in the sector with schools, colleges, training providers and universities.
2. Mechanisms to enhance employer input into the design of courses, training and qualifications at all
levels should be examined. The focus of this is likely to vary but may include: support for forums
bringing employers and training providers together to design and deliver provision; support for
networks or umbrella bodies of SMEs to ensure that their specific needs are adequately articulated;
and encouragement of companies to engage in the delivery of courses or provide related inputs.
3. Any influence to encourage the inclusion of more practical elements in degree courses should be
used, in particular through longer term work placements or ‘industry years’. Conversely, attempts
should be made to influence employers to provide access to students to learn in a practical way about
new technologies and the operation of more recently developed high-technology machinery.
4. Specifically in respect of schools, there is a need to utilise any possible leverage to ensure and
enhance the quality and relevance of careers advice in respect of the sector. Amongst teaching staff,
consideration should be given to the potential for industry visits or short term placements outside of
term time (perhaps as part of Continuing Professional Development).
5. Given the issues highlighted around the ability to take on apprentices (particularly for SMEs), there is
likely to be benefit in considering models which share placements around with apprentices being
formally attached to larger employers. This would enable smaller companies to engage in this area
whilst reducing the costs and other burdens associated with doing so.
6. Evidence on the specific areas of skills gaps identified through the employer survey should be used to
influence the provision offered by educational institutions and training providers, allied to a focus on
encouraging flexibility and responsiveness in the delivery of provision.
7. Links should be explored with national programmes to access additional funding and inputs to
address some of the issues raised by the research. Examples might include STEMNET in respect of
engineering activities in schools and the leadership and management elements intended as a focus
of BIS activity under the Growth Review.
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1.0 Introduction
Ecorys was commissioned by Coventry and Warwickshire LEP to undertake primary and secondary
research to improve intelligence relating to the current and future skills requirements of engineering
employers within the three spatial areas of Coventry, Warwickshire, and Hinckley and Bosworth.
The engineering and advanced manufacturing sectors have represented and continue to represent an
important contributor to the economic success and sustainability of not only the spatial area covered by
Coventry and Warwickshire LEP, but the entire West Midlands region. Given the Coalition Government’s
continued emphasis on supporting key growth sectors and skills development, through its recently
published Industrial Strategy and the publication of successive National Skills Strategies, it is entirely
appropriate that the LEP should apply for City Deal funding to further enhance the strategic and sectoral
advantage afforded by the advanced manufacturing and engineering sectors, with particular reference to
Automotive and Aerospace. Both of these sectors have provided the locality and the wider region with a
key economic advantage that facilitates differentiation between Coventry and Warwickshire and other
competitors at various spatial levels.
As mentioned in the previous paragraph, skills development and increasing the proportion of the
population qualified to Undergraduate Degree level and above (Level 4+) has formed a significant
element of Government policy since the Leitch Review of Future Skills Needs in the UK, published in
2006. This document, widely considered as the catalyst to National skills strategy development, placed
UK skills and productivity behind that of the US, France and Germany and plotted a trajectory to higher
level skills via an ambitious plan centred on achieving the following objectives :
 95% of working age adults to achieve functional literacy and numeracy;
 Exceeding 90% of workforce adults to be qualified to at least Level 2, achieving 95% when feasible;
 Shifting the balance of intermediate skills from Level 2 to Level 3;
 Exceeding 40% of the adult population qualified to Level 4 and above.
Since that time, significant levels of investment and resource has been spent improving the skills and
workforce profiles of communities and sectoral activities to bring the UK as a whole in line with these
objectives. Many localities, particularly those in the East and West Midlands have turned to advanced
manufacturing and engineering activities to contribute to, and support, economic recovery and growth.
This research seeks to provide a similar catalyst to engineering skills development in the Coventry and
Warwickshire LEP area as the Leitch Review did for the development of higher level skills at national
level.
1.1 Scope of the Research
After detailed discussions between Coventry and Warwickshire LEP, Ecorys and Oxford Intelligence,
together with our interpretation of the original Invitation to Tender (ITT), the key components of the
research were identified as the following:
 Identification of the current and future skills needs of engineering companies within the three spatial
areas that collectively make up the Coventry and Warwickshire LEP area
1
 Development of a SWOT analysis for the engineering sector, including a comparative analysis
between the three spatial areas, to assist in the targeting of interventions and recommendations
 In relation to the above, a quantitative and qualitative assessment of the barriers to business growth,
with a clear emphasis on skills, employment, training and education
 Identification of the skills gaps and shortages, prevalent among engineering companies at national,
regional and local level
 A brief assessment of the relevance and quality of current education and training provision for
engineering companies
 Consideration given to possible interventions and mechanisms aimed at improving the skills base of
the local labour market.
Critically, the evidence base established through this research and presented via this report has a dual
purpose. Firstly, and most immediately, findings contained in the research report will help shape
propositions and interventions to be presented in support of a City Deal funding bid, the award of which is
scheduled for later this year. Secondly, the research will serve a longer-term function in facilitating the
development of a skills strategy for the LEP.
1.2 Research Approach
In meeting the aims and objectives of the study and the dual purpose of City Deal and a longer-term skills
strategy, our research has involved the completion of the following principal tasks:
 An initial inception and scoping meeting attended by representatives from Ecorys and Coventry and
Warwickshire LEP
 A period of focused desk research utilising publically available data sources, together with LEP
reports, research and analysis, to determine the current scope and profile of the engineering sector at
national, regional and local level; and their current and future skills needs
 The completion of face-to-face and/or telephone interviews with strategically important stakeholders
to confirm information derived from the desk research and identify other issues of pertinence to
subsequent phases and tasks, centring on the following key issues:
► To understand the roles and responsibilities of key stakeholders and players
► To discuss the current state of the labour market and labour force in each of the designated spatial
areas
► To discuss the strengths and weaknesses of the engineering sector and its contribution to the local
economy
► To identify skills gaps and shortages in respect of the generic labour market in relation to the
engineering sector
► To identify and discuss likely future skills needs and the contribution of the training infrastructure to
future labour market development
 The design, implementation and analysis of a statistically significant survey of engineering companies
in each of the four districts. The purpose of this survey was to support the findings of the desk
research, identify skills gaps and shortages and other barriers companies are facing in meeting skills
needs, collate views on the quality and relevance of current education and training for engineering and
consider interventions and actions that companies will need to take to overcome these difficulties and
where the LEP may be able to assist them.
2
 Following the stakeholder consultations and business survey, a series of issues were identified and
tested with employers via in-depth interviews utilising a semi-structured topic guide.
1.3 Structure of the Report
 Section Two details the key strategic national and local policy drivers influencing the education,
employment and skills agendas in the engineering and advanced manufacturing sectors, both with
Coventry and Warwickshire and at national and regional level.
 Section Three summarises and reviews the opinions of a number of key stakeholders directly
involved with, or with an interest in the engineering and advanced manufacturing sectors at various
spatial levels.
 Section Four provides a detailed analysis of the business survey findings, which was completed with
113 advanced manufacturing and engineering businesses within the Coventry and Warwickshire LEP
study area.
 Section Five summarises responses to a series of in-depth consultations with 20 employer
representatives from advanced manufacturing and engineering firms within the study area.
 Section Six highlights the key implications for consideration arising from the research.
To aid the readers of the report, sections three to five commence by summarising the key findings
emerging from these aspects of the study. The sections then go on to explore the issues considered in
more detail.
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2.0 Growth Sectors and Advanced ‘Engineering’
2.1 Introduction
Before this research addresses the issue of skills development and, in particular, the need for higher level
skills to support the growth of the Advanced Manufacturing and Engineering, it is necessary to
contextualise and understand the political and economic drivers that have given rise to the research. This
is particularly significant given its relative importance in securing funding support from the second wave of
City Deal. To this end, the following section frames the proposed research, both within a national and
local context, with particular emphasis on the Government’s industrial and sector policies and their
influence and impact upon local economic development and decision making. Divided into three
constituent elements, the section seeks to achieve the following:
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Summarise the Government’s stance with regard to economic recovery and sustainable growth, and
the role of key growth sectors
Provide a detailed profile and assessment of the Advanced Manufacturing and Engineering sectors,
based upon national statistical and discursive information
Consider, in greater detail, the relative strengths of Coventry and Warwickshire with reference to
Advanced Engineering and Manufacturing.
2.2 Industrial Policy and a Focus on Key Growth Sectors
It is of critical importance to both the immediate and longer-term recovery that we identify where the UK
can have greatest success in capturing high value opportunities based on its key strengths and
capabilities. These strengths must be identified, firstly, at the local and regional level and resources
targeted to further enhance them. This includes supporting education and training to strengthen the skills
base and labour market profiles. Industrial policy has again identified sectoral growth and development as
the principal strength of the UK economy and is encouraging and supporting interventions to ensure
continued competitive advantage in key growth sectors.
One of the strengths of the UK economy is its industrial and sectoral diversity. Economic growth is not
predicated on the relative performance of one or two industries, but is the result of contributions from a
number of sectors and industries. As the latest industrial strategy identifies, the UK economy comprises a
wide range of different sectors whose activities, and those of the employers within them, have evolved
significantly over time. These changes have, ironically given the focus of this research, seen a shift from
manufacturing to service industries. Changes have been driven by supply-side forces such as
technological progress along with demand-side forces such as rising incomes or changing consumer
preferences and, in some cases, a combination of both pressures.
2.2.1
The UK Growth Sectors
In common with many other developed countries, there has been a marked shift in the structure of the UK
economy away from manufacturing and towards services, in particular, to knowledge intensive services
such as finance, professional services and ICT. In 2011, knowledge intensive industries accounted for
around one third of UK output and a quarter of total employment. This compares to the manufacturing
sector, which contributed just over one tenth to UK output and slightly less to employment. These
knowledge intensive sectors have rapidly become the linchpin to support economic growth and prosperity
4
in the future. This comparison between manufacturing and knowledge intensive sectoral output has led
policy makers and economists to consider how the manufacturing and engineering industries can be
encouraged to become more knowledge intensive and contribute greater value added to national,
regional and local economies.
The role of a sector-based approach, which has now been endorsed by BIS and central Government, is
to enable firms in a range of sectors to exploit fully the underpinning economic conditions. These include
a highly skilled and available labour market and an existing competitive advantage in key sectors. The
approach is intended to generate maximum economic value (in the form of increased employment and
productivity, the latter measured through GDP), and address any sector-specific market or regulatory
failures which are preventing this. Through considering the size and opportunity for future growth,
together with the barriers to growth and scope for government action, the following sectors have been
identified as adding the most value:
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Advanced Manufacturing: Including aerospace, automotive and life sciences;
Knowledge intensive traded services: Including professional and business services, the information
economy and traded aspects of higher and further education; and
Enabling sectors: such as energy and construction.
These ‘growth sectors’, reiterated in Vince Cable’s speech of the 11th September 2012, closely
correspond to those most prominent and active within the Coventry and Warwickshire LEP and City Deal
boundaries. The sectors, in particular Advanced Manufacturing (and Engineering) benefit from a strong
clustered presence within the study area, whilst also now being in a position to benefit from central
Government support (including a major Government initiative in relation to Science, Technology,
Engineering and Mathematics (STEM), which has served to highlight skill shortages in the workforce).
2.3 Advanced Manufacturing and Engineering
2.3.1
Determining a Definition of Engineering
In establishing the parameters of the research, detailed discussions were held with representatives from
each of the districts within the LEP and City Deal boundaries. These discussions aimed to determine and
agree a suitable definition of the Engineering sector - one that is focused enough to ‘drill down’ and
identify the key engineering activities and companies operating in the area, without being so focused that
it fails to incorporate engineering companies that are prevalent within other manufacturing activities.
The starting point for this discussion was the definition of ‘Niche Advanced Engineering’ utilised in the
development of the original City Deal EOI for Coventry and Warwickshire. This definition was based on
identifying companies within 30 five digit manufacturing and engineering SIC codes (2007), including
Manufacture of Air and Spacecraft Related Technology (30300), Manufacture of Irradiation,
Electromedical and Electrotherapeutic Equipment (26600) and Manufacture of Military Fighting Vehicles
(30400). Whilst the examples detailed are extreme in their industrial focus, compared with other possible
selections, they more than illustrate the problem with the ‘Niche Advanced Engineering’ definition. This
concerns the fact that the specificity and granularity of such classifications will significantly limit the
number of companies identified for interview within the study area. This may result in many engineering
companies, and advanced manufacturing companies with engineering activities, being overlooked.
In seeking to widen the net of prospective companies through a less prescriptive definition, whilst warding
against an overly generic alternative, we have settled upon an agreed definition that utilises the SIC
5
codes identified by SEMTA (science, engineering and manufacturing technologies); Cogent (chemical
and pharmaceutical, oil, gas, nuclear, petroleum and polymers); and Energy and Utility Skills (which also
incorporates Waste Management). In addition, we have chosen to select specific classifications from
those listed by the various Sector Skills Councils (SSCs) to further isolate relevant companies.
2.3.2
Importance of the Advanced Manufacturing and Engineering Sector
According to BIS, advanced manufacturing is the part of the manufacturing sector which is: intensive in
the use of capital and knowledge; requires long-term investment decisions to develop processes and
purchase equipment; uses high levels of technology and Research and Development and intangible
investments to support innovation; requires a flexible workforce with strong specialist skills in STEM
areas; and competes strongly in both international and domestic markets.
Advanced manufacturing represents one of the best opportunities for the UK to rebalance the economy,
with the potential to drive up levels of value added in the economy and make a substantial contribution to
export growth. However, export growth and the extent of global competiveness will be highly dependent
upon the skills of the workforce. The potential for the sector to lead local, regional and national economic
recovery is evidenced by the fact it accounted for over half of all UK exports in 2009, 12% of gross valueadded (GVA) – at £130bn – and employed approximately 2.6 million people in 2010.
Several of the sub-sectors identified within the sectoral coverage of SEMTA have global significance,
such as the aerospace sector and automotive, the latter of which employs approximately 156,000,
accounts for almost 6% of all manufacturing employment. As will be shown in the next sub-section, a
number of these sub-sectors are also of strategic and economic importance to the Coventry and
Warwickshire economies.
2.3.3
Profile of the Sector
According to the 2010 Sector Skills Assessment1, compiled by SEMTA:
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Based on 2008 ABI data, there are approximately 132,000 establishments in the SEMTA footprint in
the UK, employing just over 1.7 million people
The mature engineering industries account for 47% of employment , 815,000 employees, of which
143,400 are located in the West Midlands
Leading edge technology industries employ 47% of the SEMTA footprint, the largest number being in
South East England
The science industries employ 6% of the total UK footprint employment, again the largest number
being in South East England
SEMTA’s footprint contains a higher proportion of micro-businesses, employing between 1-10 people.
(83%in SEMTA compared to 85% in other sectors) and this will have important implications for
current and future skills needs.
In relation to workforce demographics:
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
Under the EU definition of an SME, with up to 249 employees, 65% of employees in UK
manufacturing work for SMEs compared to 74% across all sector
The age profile of the UK manufacturing sector illustrates the slightly higher presence of females in
the younger age ranges
1
6
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The concentration of people in the older age ranges is striking, with almost two-thirds (61%) of the
workforce between the ages of 35-59, much higher than the 46% for all sectors
The presence of under 25’s in the workforce is lower for manufacturing at 9% than the average
across all sectors (13%)
The largest occupational categories within SEMTA’s sectors are skilled trades/craft (21%), managers
(20%) and professionals (20%)
The proportion of employees in higher-skilled occupations such as manager, professionals and
associate professionals/technicians is higher for SEMTA’s sectors (52%) than all sectors in the UK
(43%)
It is estimated that just over half of the workforce in SEMTA’s sectors in the UK are employed in direct
technical roles such as engineers, scientists and technologists.
2.3.4
Key Challenges
The sector faces particular challenges and potential barriers to growth, including:
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Increased competitive pressure
Responding to the rapid pace of technological change and development, resulting in the introduction
of new technologies, processes and equipment
The increasing cost of energy, particularly exploiting the low carbon market
Creating new business models and introducing new work practices to exploit innovation and capture
value
New legislative and regulatory requirements which will require constructively influencing government
economic, taxation and regulatory policies and ensuring the sectors’ ability to adapt, exploit and
conform to these policies as they evolve.
2.3.5
Implications for Skills
SEMTA’s Sector Skills Agreement (SSA) highlights a number of implications for workforce and skills
requirements. As it notes, the speed of change is increasing and forcing supply chains to become more
like supply networks, requiring higher levels of flexibility, agility and a broader spread of soft skills across
the workforce. In the future, it is likely that higher levels of employee responsibility, autonomy and
managerial delegation will be required. A continuing drive for increased productivity, greater
competitiveness and higher value added has been built into occupational profiles for the sector over the
next 10 years, with an 11% increase in managers, directors and senior officers, a 14% increase in
professional and associate and technical roles, counterbalanced by a 16% reduction in skilled trade
occupations, highlighting the importance of ‘up-skilling’ if the local labour market in Coventry and
Warwickshire is to benefit from future employment opportunities.
Overall, evidence has shown that the number of people engaged in higher-level occupations and who are
‘relatively’ well qualified has been growing in the sector, reflecting the increasingly complex nature of
products and production processes. This will necessitate the continued demand for people with STEM
capabilities. The move to higher level occupations has resulted in a corresponding shift in qualifications.
According to the SSA, between 2000 and 2009 the overall proportion of SEMTA’s workforce in the UK
with intermediate (NVQ Level 3) and higher-level qualifications (NVQ Level 4+) increased from 60% to
66%, while the proportion with no qualifications reduced from 12% to 7%.
Around one quarter of establishments in SEMTA’s sectors have skills gaps, a higher figure than for all
sectors in the UK. The mature engineering sectors and science industries were most likely to have gaps.
The incidence of skills gaps increases significantly by size of establishment, with larger establishments
7
most likely to report their employees as having skills gaps. The skills gaps were most commonly reported
in skilled trades/craft and managerial occupations.
2.4 Sectoral Strengths in Coventry and Warwickshire
Both industrial and sectoral policy and the national profile of the Advanced Manufacturing and
Engineering have rightly led to its identification as a ‘key growth sector’ for immediate economic recovery
and longer-term sustainable growth. However, the identification of Advanced Manufacturing as one of
eight key growth sectors within the Industrial Strategy has led many local authorities and LEPs to
consider their economic profile in relation to it. This, in turn, will lead to increased competition among
localities. Whilst it is important for local and regional economies to align themselves with current trends in
government thinking and policy, it is arguably of greater importance that they seek to differentiate
themselves from other economies and ‘play’ on their own specific strengths. In short, is the economy and
constituent labour market of Coventry and Warwickshire suitably ‘geared’ up to benefit from investment
in, and growth of, the advanced manufacturing and engineering sector?
A great deal of preparatory work aimed at understanding the economic, labour market and sectoral
strengths of Coventry and Warwickshire has been undertaken to assist in the development of the
Economic Assessment and the evidence base for the initial Wave Two City Deal EOI. However, it is worth
re-iterating some of this evidence as part of this contextual section, particularly for those stakeholders and
interested parties to whom it is not familiar.
Table 2.1 Economic Structure of C&W (Key Facts)
Key Facts
 Coventry does not punch its weight relative to its size as the 11 th largest city in England, largely as a
result of the significant restructuring of the economy required over the last 20 years
 Warwick district performs particularly strongly and draws in workers from around the sub-region
and the economy benefits significantly from in-commuting
 The significant variations in economic performance has led to a regional economy as a whole that
under-performs relative to the national average
 Lower than average productivity, which characterises the performance of the regional economy,
results from the following issues:
 Lack of growing businesses within the sub-region, particularly within those areas with strongest
business start-up rates
 Under-representation of ‘high growth’ businesses
 Signs that more could be done to exploit innovation assets
 Weak agglomeration effects of Coventry and the wider city-region, which are in turn, failing to
generate the scale of economic benefits that might be expected
 Relatively poor transport connectivity
 Lack of higher level skills in the northern part of the sub-region
 The area has a strong presence in higher value, knowledge intensive businesses and sectors,
however, they have not been growing at the same rate as the rest of the national economy
 Coventry has a youthful age profile, scores well above average in terms of measures of economic
adaptability, and has real scope to become a dynamic and productive economic area.
Source: Economic Assessment and City Deal Evidence Base
Recent national and regional government policy has focused on re-balancing the economy away from
financial services, instead returning to production and manufacturing-based activity. Expected growth
8
industries in the UK include research and development, high value engineering and niche specialised and
applied manufacturing. These are all sectors that the Coventry and Warwickshire economy already has a
strong presence and level of activity in, alongside a skilled workforce. As the economic assessment
states, there is a certain degree of irony that the economic legacy responsible for unequal growth and
limited economic productivity is likely to become the mechanism and catalyst for the creation of a new
and stronger economic future for the sub-region.
In highlighting some of the sectoral and labour market strengths that are inherent within the local
economy, it is also important to re-iterate the opportunities and assets that could be utilised to elicit
growth. By way of example, there are opportunities to exploit transition to the low carbon economy,
especially in relation to low carbon vehicles and technology and engineering for renewable energy
systems. Both these opportunities align positively with the LEPs proposed focus Advanced Engineering
and Manufacturing. In addition, the sub-region benefits from a range of key assets that also align with
manufacturing and engineering activities, including key companies such as Jaguar Land Rover, Arup and
Converteam, research establishments in the form of MIRA, WMG and Coventry University and new and
innovative projects such as Coventry and Birmingham Low Emissions Demonstrator (CABLED).
9
3.0 Stakeholder Consultations
Summary
 Many of the newly formed Local Enterprise Partnerships (LEPs) are developing interventionist
policy and strategy to support growth and development.
 The critical difference for LEPs in the West Midlands is the long standing and continued history in
manufacturing.
 Pupils in primary school should be actively encouraged to consider the continuation of scientific and
mathematical study.
 Increased participation in STEM subjects would be facilitated if engineering and associated
professions were made more attractive to young people at an earlier age.
 Stakeholders were critical of the quality and relevance of careers advice provided to school and
college leavers. The majority of teachers have no, or only very limited, knowledge of employment in
the private sector, with many never having left the educational profession between being pupil and
teacher.
 Schools could encourage local employers and company success stories to come into school and
facilitate presentations and practical activities and workshops for pupils.
 Options for teacher work experience placements in local manufacturing and engineering companies
were discussed.
 Evidence derived from the employer survey, and from similar research conducted in Sheffield and
Northampton, has highlighted a willingness among manufacturing and engineering SMEs to support
the Apprenticeship programme.
 Such involvement with the training of apprentices would require the implementation of a different
delivery model, a model that would facilitate the sharing of apprentices.
 Questions were raised about the practical experience and associated skills of newly qualified
graduate engineers, in particular, how theoretical knowledge is applied to real life problems.
 Stakeholders highlighted the importance of graduate engineers leaving their degree course with a
strong understanding and knowledge of basic engineering principles and their applicability to a work
environment.
 Universities and training providers try and develop entirely new courses in response to every shift in
market and sector requirements and use of technology. However, if degree courses were to retain a
core component that provides students with the basic principles and common truths in engineering,
then there could be a change in emphasis in course design.
 Stakeholders were quick to outline the need for compulsory work placements and practical,
employer-led modules as part of degree courses. Students would benefit from using their theoretical
knowledge in a practical, real life situation.
 The prospect of mentoring and utilising the more experienced engineers in a teaching capacity was
discussed. There were two components to this. Firstly, stakeholders stated that older staff, nearing
retirement, could ‘buddy’ with a younger employee and pass on their technical and traditional skills
to ensure they are not completely lost upon their retirement. Secondly, these same individuals could
be encouraged to engage with local education and training providers, facilitating awareness of the
engineering profession and offering talks, presentations and practical experience.
 The importation of technical engineering skills would provide a short-term and immediate solution to
the engineering shortage. The encouragement of long-term skills importation will only serve to
lower the skills profile of the local workforce and limit the availability of jobs for graduates and highly
skilled individuals.
10
3.1 Introduction
The advanced manufacturing and engineering sectors, which incorporate an array of industries including
Aerospace, Automotive and Medical Technologies to name but three, remains a prominent contributor to
the national, regional and local economy both in terms of GVA and employment. As the previous section
has served to illustrate, both national government and local authority policy has identified advanced
manufacturing as one of eight key growth sectors. This has led to many of the newly formed Local
Enterprise Partnerships (LEPs) developing interventionist policy and strategy to support growth and
development.
The critical difference for LEPs in the West Midlands is the long standing and continued history in
manufacturing, particularly niche automotive and aerospace manufacture, a history that can be built upon,
sustained and utilised to ensure both product and process differentiation. However, this differentiation,
characterised by the presence of a number of premium automotive manufacturers including Jaguar Land
Rover, Triumph, Aston Martin and BMW, can only be sustained by maintaining the skills profile of the
locality and promoting effective networks and partnerships between prominent stakeholders.
In seeking to not only sustain, but also to raise, the skills profile of the engineering and manufacturing
workforce in Coventry and Warwickshire, this research has sought to collate and analyse the views,
perceptions and opinions of prominent stakeholder organisations with an interest in education, training
and engineering. Organisations consulted are detailed in Table 3.1 below and can be categorised into
sector specific employer representatives or training providers; schools, colleges and higher education
institutions and national/regional Government.
Table 3.1 Stakeholder Organisations
Sector Specific
SEMTA
Midlands Aerospace Alliance
Manufacturing Advisory Service
Coventry and Warwickshire
Aerospace Forum
Jaguar Land Rover
WMG Innovative Solutions (part
of the University of Warwick)
MIRA Technology Park
(Automotive)
Public Training Providers
Warwickshire College
North Warwickshire and Hinckley
College
Coventry University
Midland Group Training Services
CWSP – The Careers Guidance
Service
CWP – Chamber Training
(Coventry and Warwickshire)
National/Regional Government
UK Trade and Investment (UKTI)
Department for Business,
Innovation and Skills (BIS)
Warwickshire County Council
Chamber of Commerce
(Coventry and Warwickshire)
Coventry City Council
Ecorys Research
The interviews were conducted utilising a semi-structured topic guide that had been designed in
conjunction with the LEP Steering Group. However, in completing the consultations, a number of specific
issues of importance were continually identified by respondents. Subsequent consultations were then
adapted to further discuss and explore these issues, together with possible interventions and solutions to
address them. The most commonly cited issues identified via the stakeholder consultations were as
follows:

Early stage engagement with schools, manifesting itself in two interrelated ways:
► Providing teachers and Careers Guidance workers with an understanding of Engineering
► Raising awareness of the engineering sector among young people
11

Improving lines of communication between employers and public/private training providers

Improving employer engagement with Apprenticeships and vocational learning (particularly among
SMEs)

Encouraging employers to become more involved in both the design and delivery of courses and
curriculum elements

Raising the skills levels of the existing workforce to minimise the detrimental impact of the immediate
shortage of engineers and technical staff.
The remainder of this section focuses greater attention on each of these issues, in particular how they
manifest themselves among engineering companies and training providers in the locality and the
interventions proposed by stakeholders to deal with them.
3.2 School Engagement: Awareness and Knowledge of Engineering
There is continued debate between employers and training providers regarding the most appropriate time
to engage young people in discussions about careers and employment options, along with the suitability
of teachers and school careers advisors to lead such discussion. Currently, discussions about possible
career pathways and progression routes are reserved for Year 10 and Year 12 pupils finalising their
subject options for GCSEs and A-Levels, with little attempt made to engage pupils earlier in their
educational journey. Even then, stakeholders, including schools and colleges, were critical of the quality
and relevance of such careers advice and the knowledge of those individuals tasked with imparting it.
It was argued by many stakeholders that pupils in primary school should be actively encouraged to
consider the continuation of scientific and mathematical study, two subject areas that form the foundation
of many manufacturing and engineering professions. Levels of participation in STEM subjects, from
school through to Further and Higher Education have been in continual decline over the last 10 to 15
years, a trend that has served to limit the supply and availability of engineers, product designers and
scientists. Increased participation in STEM subjects would be facilitated if engineering and associated
professions were made more attractive to young people at an earlier age. The issue of sector
attractiveness is by no means limited to engineering and highlights the continued lack of emphasis on
readying young people for the world of work.
Related to the issue of industry awareness, stakeholders were critical of the quality and relevance of
careers advice provided to school and college leavers. This concern has been heightened amid changes
to careers IAG, with schools again assuming sole responsibility for the provision of such advice. It was
argued that the majority of teachers have no, or very limited, knowledge of employment in the private
sector, with many never having left the educational profession between being pupil and teacher. Their
understanding and awareness of both the skills required to work in technically demanding industries such
as engineering, and the array of employment opportunities across various occupational and qualifications
profiles, is too limited to offer meaningful and insightful advice to young people. Previous governments
have sought to encourage and incentivise the participation of ex-industry senior management in the
teaching profession, with limited success.
Many of the stakeholders interviewed identified potential interventions to address the interrelated issues
of sector awareness among both pupils and teachers. Firstly, it was felt that schools could encourage
local employers to come into school and facilitate presentations and practical activities and workshops for
pupils. This engagement could be facilitated through National Apprenticeship Week which, this year, took
12
place between 11th and 15th March. However, some stakeholders went a stage further, citing the need for
employer engagement within the formal curriculum and for a return to compulsory work experience
placements for Year 10 and Year 12 pupils, a requirement that has recently been abolished under the
current Government.
Of greater concern was the need to improve information, advice and guidance provided to pupils via
subject teachers and careers advisors. Employer representative organisations, including the Chamber of
Commerce, the Manufacturing Advisory Service (MAS) and SEMTA, discussed options for teacher work
experience placements in local manufacturing and engineering companies. This would provide them with
practical experience of working in the private sector and increase understanding of various roles and
employment opportunities offered by local companies. In addition, such experience will facilitate an
understanding of the skills profiles of the current workforce and will provide real life experiences to share
with pupils in lessons. The logistics for such an intervention would need to be discussed and would more
than likely necessitate the provision of placements during the holidays.
3.3 Vocational Learning, Apprenticeships and Practical Experience
It is common knowledge that the Coalition Government has ring fenced additional budget for the National
Apprenticeship Scheme, although access to Adult Apprenticeships have been made more challenging as
a result of Department for Education budget cuts in recent spending rounds. It is widely understood too
that the manufacturing and engineering sectors have always had strong association with apprenticeships
and vocational education and training. In principle then, the increased funding combined with a strong
history of apprenticeship training has created the ‘perfect’ conditions for increasing the number of young
people entering the manufacturing and engineering workforce, and for raising the overall skills profile. The
issue for the LEP and relevant stakeholders is thus around the establishment of a delivery model that
maximises this opportunity.
Stakeholders were keen to point out that any proposed approach to maximising apprenticeship training
will need to consider the profile of engineering companies. This is characterised by a small number of
large companies, a supply chain of SMEs, and niche companies involved in cutting edge technologies
and product development. The profile described poses a further question of volume versus experiential
quality. According to a number of stakeholders, replacement demand combined with probable market
expansion (particularly in Automotive) will necessitate the introduction of 18,000 engineers over the next
5 years. It was felt by many that the requirement for this volume of engineers would best be addressed
via larger companies with significantly more resources, supporting the movement of apprentices through
the industry. Rather than seeing large engineering companies like JLR taking talented engineers from
within the supply chain, they could support the downward movement of fully trained engineers back into
the supply chain. The risk attached would be lower than for SMEs and the ratio of completed
apprenticeships and vocational courses would more than likely be higher.
That said, however, evidence derived from the employer survey, and from similar research conducted in
Sheffield and Northampton, has highlighted a willingness among manufacturing and engineering SMEs to
support the Apprenticeship programme. Such involvement with the training of apprentices would require
the implementation of a different delivery model, a model that would facilitate the sharing of apprentices
among a number of SMEs in the supply chain. The need for a more flexible approach has been
recognised by North Warwickshire and Hinckley College and partners, who are currently finalising an
agreement for the establishment of an Apprenticeship Training Agency (ATA). There was brief discussion
as to the likelihood of City Deal funding the ATA or whether an expanded version of this delivery model
could be suggested. Whatever the outcome of future discussions, utilising the skills and experiences
13
offered by SMEs should form the focus of any proposed intervention. Options might build on the recent
experience of running related schemes in respect of construction, as has been the case in Coventry
where a ‘carousel’ model has been used to provide apprentices with experience across a range of SMEs.
A focus on the importance of practical experience of the engineering and manufacturing sectors was not
solely reserved for young and adult apprenticeships. A number of stakeholders, together with a significant
proportion of SME respondents from the employer survey, have questioned the practical experience and
associated skills of newly qualified graduate engineers. Whilst there is praise for the theoretical
knowledge of graduates, there is greater concern about the capacity of graduates to readily apply this
knowledge within a practical setting. This inability to apply theoretical knowledge was seen as resulting
from a lack of experience of workplace settings. Both undergraduate and postgraduate degree courses
provide options for a year’s in industry, but it was noted that this is rarely taken up by the majority of
students.
However, there are examples of companies that set work placement and university students industryspecific and real life problems that require solving. Such opportunities clearly develop the participant’s
problem solving skills, engage them in a formal working environment, assist in dealing with a business
issue and minimise the requirements for input of employer time and resources. Problem solving skills are
widely identified as a skills shortage among manufacturing and engineering industries and interventions
to minimise the impact of this shortage are welcomed by stakeholders and employers alike.
3.4 The Suitability of Higher Education Courses and the Role of Employers
The previous sub-section has touched upon an issue that begins to call into question the suitability of
higher education courses for providing employers with not only skilled, but ‘work ready’ graduates, the
latter being a crucially important factor influencing the recruitment decisions of SMEs. Discussions on the
suitability of degree courses covered an array of issues and it became clear through the consultation
process that a quick and easy intervention would not be sufficient to deal with them. As a result City Deal
may need to focus on a particular aspect in order to maximise interventionist impacts.
Given the need to identify actions and interventions that will improve higher education provision and the
engagement of employers, this sub-section focuses greater attention on the negative perceptions of
stakeholders and discusses the inherent and persistent shortfalls in provision of engineering and related
courses at undergraduate and postgraduate level. However, it is important to note that stakeholders were
positive about a number of key components of the local engineering training offer, particularly the
introduction of the University Technical College, which is providing greater flexibility in course design and
improved engagement and consultation with employers.
If City Deal funding is to successfully improve the education and training of students and ensure that
graduates entering the labour market have the skills required by employers, it is important to identify and
discuss what skills and competencies this cohort are lacking. The extent to which these shortcomings act
as barriers to employer growth and recruitment is a further consideration. Through improving both the
relevance and quality of engineering degrees, it is also likely that the commonly cited issue of insufficient
numbers of engineers will be addressed via increased school leavers enrolling on engineering courses.
3.4.1
A Firm Foundation
Stakeholders highlighted the importance of graduate engineers leaving their degree course with a strong
understanding and knowledge of basic engineering principles and their applicability to a work
14
environment. This strong foundation can then be built upon to take account of technological
advancements, the introduction of legislative changes or the development of new processes or products.
Several stakeholders argued that universities and training providers try and develop entirely new courses
in response to every shift in market and sector requirements and use of technology. However, if degree
courses were to retain a core component that provides students with the basic principles and common
truths in engineering, then there could be a change in emphasis in course design to introduce bespoke
modules that relate directly to industry and market change. One stakeholder utilised a manufacturing
term, referring to this change in course design as ‘late customisation’ of skills. If students have a strong
understanding of basic engineering principles, across a range of disciplines, then adaptations to courses
can focus solely on being responsive to specific industry requirements. There is no need to continually
design new courses that may only be relevant for a period of a few years or even months.
This concept of ‘late customisation’ has arguably formed the backbone of engineering degrees in
Germany and has facilitated the creation of numerous engineering specialisms and modular degree
options. According to a research report by Study in Germany entitled ‘Germany: ‘A great place for
knowledge’, engineering represents one of the most diversified fields studied at German universities. With
almost 427,000 students engineering is the third largest field of study after law, economics & social
sciences and languages & cultural studies. In addition, 126,000 first year students enrolled on
engineering courses in 2010-11. Despite the range of engineering specialisms offered, all students at all
types of universities acquire basic knowledge of mathematics, the natural sciences and engineering. The
teaching of specialist and methodological skills in relation to specific engineering disciplines is then based
on this knowledge. In addition, depending on the degree course, different aspects can be emphasised
creating a qualification profile geared towards personal inclinations.
3.4.2
Practical Knowledge and Business Acumen
However, establishing university courses that adequately provide students with these basic and
fundamental engineering principles, will require significant improvement to current course provision and
the introduction of a number of compulsory elements and modules.
A particular area of concern among stakeholders, and an area already touched upon, is the lack of
practical experience and understanding of business acumen. Practical skills are highly valued by
employers and, as ‘Study in Germany’ argue, ‘in order to be able to put into practice the theoretical
knowledge acquired during the degree course later on in the business world, it is very useful to gather
practical experience early on’. Whilst this statement is agreeable to many stakeholders, including further
and higher education providers, such opportunities to develop practical experience, industry
understanding and business acumen remain limited within UK undergraduate and postgraduate courses.
Stakeholders were quick to outline the need for compulsory work placements and practical, employer-led
modules as part of degree courses. From this perspective students would benefit from using their
theoretical knowledge in a practical, real life situation. Stakeholders stated that overseas experience,
whether through engagement with employers or via student placements at universities, would appeal to
students and provide a different insight into how engineering is taught and utilised in other countries. At
universities of applied science in Germany, for example, internships in firms lasting several months are an
integral part of the engineering degree. In addition, voluntary periods of work experience are also
encouraged during university holidays, and students are also encouraged to engage with companies as
part of their thesis.
15
3.4.3
Flexibility of Course Provision
Related to the above, and to the issue of up-skilling the existing workforce discussed below, stakeholders
were critical of the limited flexibility of course provision. In part, this problem will be addressed through a
focus on the two issues of practical engagement and ‘late customisation’ of courses. However, greater
variation in the mechanisms used to deliver training need to be encouraged to facilitate access to adult
learners and people already employed in an engineering or manufacturing discipline. Modular and add-on
delivery needs to be increased to minimise the amount of time spent away from work and to maximise the
responsiveness of course content. This fits with the delivery models utilised in Germany and discussed
above.
3.5 Up-skilling the Existing Workforce: The Role of Mentoring
Many of the concepts and interventions discussed have focused on the medium to long term. However,
as everyone associated with engineering is acutely aware, there is a more immediate problem of a
shortage of trained and experienced engineers, coupled with a loss of traditional skills held by an ageing
cohort of engineers nearing retirement. The next two sub-sections consider these short-term problems
and discuss interventions that might facilitate the exploitation of predicted market expansion and growth,
particularly within the automotive sector.
Personal development should, and does, represent an important driving factor for working in a particular
sector and staying loyal to a specific employer. This inbuilt propensity among many to improve, develop
and take on greater responsibility, may well provide the opportunity to progress individuals through the
various occupational levels. This could be facilitated by the offer of in-house training, increased access to
external provision and better identification and discussion of training needs.
More than this, however, a number of stakeholders discussed the prospect of mentoring and utilising the
more experienced engineers in a teaching capacity. There were two components to this. Firstly,
stakeholders stated that older staff, nearing retirement, could ‘buddy’ with a younger employee and pass
on their technical and traditional skills to ensure they are not completely lost upon their retirement. In a
sense, this would represent an ‘internal apprenticeship’ and provide an opportunity for staff to learn new
skills. Secondly, these same individuals could be encouraged to engage with local education and training
providers, facilitating awareness of the engineering profession and offering talks, presentations and
practical experience. These two interventions were seen as helping to ensure the continuation of more
traditional skills within the existing workforce and to encourage new entrants into the engineering
disciplines.
3.6 The Short-term Importation of Engineering Skills
Given the strength of foreign engineering courses and the burgeoning expansion of markets in China,
India and South America, the utilisation of engineers from abroad facilitates access to technical, linguistic
and market knowledge, a concept not lost on high growth firms. More than this, however, the importation
of technical engineering skills can provide a short-term and immediate solution to the engineering
shortage, enabling companies to benefit from the repatriation of manufacturing activities and the
predicted expansion of automotive manufacture. In addition, companies would also benefit from the lower
salary costs demanded by many foreign migrants.
However, the importation of technical engineering skills from abroad would now be at odds with Coalition
policy aimed at addressing immigration issues. If anything, employers in engineering and associated
16
sectors would be looking for greater relaxation of visa and working arrangements in order to attract more
people. Equally, there is a risk that the encouragement of long-term skills importation will only serve to
lower the skills profile of the local workforce and limit the availability of jobs for graduates and highly
skilled individuals. Stakeholders stated that it may be possible to draw up agreements with employers that
encourage engagement with course design and delivery, together with access to work placements and
practical experience, in return for the relaxing of immigration policy to attract skilled engineers from
abroad. This might ensure both short-term access to engineering skills whilst also contributing to the upskilling of the local population.
17
4.0 Engineering Employer Survey
Summary
Company Profile
 Almost two thirds of the 113 advanced manufacturing and engineering companies surveyed employ
fewer than 10 staff, with a further 31% employing between 11 and 49 staff. Only 10.6% employed
more than 50 staff.
 There were a high proportion of respondents with turnover in excess of £10m, highlighting the
success of local business and the economic contribution provided by SMEs in the study area.
 Over one quarter (27%) of responses stated that there had been an increase in staff numbers in the
previous 12 months.
 Company occupational profiles were dominated by three classifications: Managers and Senior
Officials (26.2%), Skilled Trades (21.2%) and Process, Plant and Machine Operatives (19.4%).
Skills Gaps and Shortages
 Almost one third (30.1%) of companies stated they were suffering from gaps and/or shortages,
significantly higher than the all sector national average of 15% (from the most recent Employer
Skills Survey 2011).
 Respondents (particularly those employing less than 10 staff) were quick to point out the lack of
new entrants with multi-disciplinary skills; graduates were reported to focus on one discipline of
engineering and have limited knowledge of related activity.
 There is a lack of traditional engineering and trade skills among new recruits in the industry. New
entrants can utilise new programs and software but cannot deliver similar outcomes in the absence
of such technology.
 The relative importance placed on skills gaps and shortages appears to differ significantly between
large corporates, such as JLR, Tata and Rolls Royce, and smaller firms.
 Specific skills gaps were identified as leadership and management, particularly in relation to export
markets, promotional activity and use of IT; product design and development; software
programming and operating systems programmers.
 Engineering skills gaps were identified within electrical, structural, mechanical and manufacturing
disciplines with more specific requirements in metrology and robotics.
 Further down the occupational profile, and predominantly among SMEs, requirements for CAD
drawing, electronics and multi-skilled machinists were identified, with the latter being a significant
issue for many.
 There is widespread optimism regarding the likely growth of the automotive and aerospace sectors
but also an associated concern, among larger companies, of a lack of appropriately skilled staff.
Larger companies are seeking to address this through greater engagement with apprenticeships
and vocational learning, recruitment via their supply chains and increased recruitment from abroad.
 Coventry and Warwickshire, and the wider West Midlands region, is a net exporter of graduate
engineering skills. Wherever possible, smaller companies have stressed the importance of local
skills and locally sourced employment.
 Over two thirds of companies employ at least 90% of their staff from within a ten mile radius of the
company site.
 For SMEs, importance was placed on receiving new graduates or industry entrants with a strong
foundation in engineering and technical competence, alongside the right attitude.
 SMEs were strong in their support of the locality and providing opportunities for the local population.
18
Engagement with Training
 Recognition of the need for replacement skills and requirements for new skills has led to increased
engagement in training, with 85.8% (97 companies) having undertaken training in the last 12
months.
 The vast majority of companies that engage in training (78.4%) deliver at least some of their training
through internal staff.
 Just under two thirds (60%) undertake formal training and 37% undertake more informal ‘on the job’
training.
 Compared to other sectors, a higher proportion of engineering companies utilise external training
provision, reflecting the technical and higher level skills requirements of the industry.
 Across the five criteria of relevance, affordability, range, quality and availability, between 11 and
13% were either ‘dissatisfied’ or ‘very dissatisfied’ with training.
 Interestingly, 2 in 5 companies were unable to provide meaningful responses, highlighting a lack of
awareness of training offered, together with the difficulty training providers face in designing training
of relevance to employers.
 The most commonly cited barriers to training, identified by 15.9% of those undertaking it, were lack
of local courses (61.1%), lack of customised and responsive training (33.1%) and the cost of
courses (16.7%).
 Respondents stated that the sector needs to significantly improve the sharing of knowledge among
employers and between employers and training providers. One approach could be the more regular
completion of industry-wide skills assessments.
 At a more local level, business networks could be established that facilitate the coming together of
companies.
 1 in 5 respondents are engaged in either the design or delivery of training. With reference to the
latter, this tends to relate to vocational learning, apprenticeships and the provision of formal work
experience placements.
Future Skills
 When asked about the future skills requirements for their company and for the wider local economy
as a whole, the most common responses centred on five main areas:
► Technical and sector specific skills, including engineers, hardware and software designers,
metrologists and robotics
► ICT, particularly within management and supervisory roles
► Management and Leadership: emphasis here is on business acumen, market awareness,
marketing and promotional activity and financial management
► Machine operative, which is a particular issue for SMEs both currently and in the future
► Practical industry experience.
4.1 Introduction
This section provides a detailed analysis of company responses to Ecorys’ telephone survey with
Engineering and Advanced Manufacturing companies, which was completed during the last two weeks of
February and the first week of March 2013. The survey used a structured questionnaire, the content of
which was designed in conjunction with Coventry and Warwickshire LEP.
This survey recorded the viewpoints of 113 advanced manufacturing and engineering employers, located
within the various counties and districts that collectively make up the LEP spatial area. Based on the
19
aims, objectives and research requirements outlined in the original Invitation to Tender (ITT), together
with Ecorys’ previous experience of undertaking similar research studies, the questionnaire focused
attention on the following issues and discussion topics:
 Company Background and Profile: Company type (e.g. Sole Trader), how long established, main
business activity, turnover and company size
 Employment: Proportion of male/female and full time/part time employees, changes in employment,
occupational breakdown (using Standard Occupational Classifications)
 Business Performance: Location as a place to do business, business premises, impact of business
climate on performance, future performance (profit, turnover, staff numbers), barriers to growth
 Skills Gaps and Shortages: presence of skills gaps and shortages, nature of the skills gaps, gaps by
occupational level, vacancies
 Future Skills: Likely future skills needs, types of qualifications, skills by occupational level
 Training Provision: Extent of training, type of training, accreditation, satisfaction with training
provision, future training needs and barriers to training
 Tailoring of Training provision: To include discussion on the role of employers in the design and
delivery of training courses.
What follows is a detailed analysis of both the quantitative and qualitative findings from the respondents,
broadly following the framework of the questionnaire.
4.2 Sampling
As outlined in previous sections of this report, determining a suitable definition of the engineering sector
and its various disciplines was of critical importance in ensuring the appropriate capture and inclusion of
relevant companies. If the definition was too narrow (as was the case with the parameters of the LEPs
‘niche engineering’ definition), there was an inherent risk of excluding companies that utilise engineering
skills and disciplines as part of product and process development. However, if the definition was too wide,
incorporating numerous manufacturing disciplines in the hope that engineering formed part of their
activities, then the validity of the findings detailed below would be called into question. To this end,
extensive discussions were held with representatives of the LEP, which resulted in the following sectors
being identified and included within the company profile:
Table 4.1 Engineering defined by SIC Codes
SIC
Division
Sector Description
10
Manufacture of food products
18
Printing and reproduction of recorded media
19
Manufacture of coke and refined petroleum products
20
Manufacture of chemicals and chemical products
21
Manufacture of basic pharmaceutical products and pharmaceutical preparations
22
Manufacture of rubber and plastic products
26
Manufacture of computer, electronic and optical products
27
Manufacture of electrical equipment
29
Manufacture of motor vehicles, trailers and semi-trailers
30
Manufacture of other transport equipment
33
Repair and installation of machinery and equipment
35
Electricity, gas, steam and air conditioning supply
20
41
Construction of buildings
42
Civil engineering
43
Specialised construction activities
62
Computer programming, consultancy and related activities
70
Activities of head offices; management consultancy activities
71
Architectural and engineering activities; technical testing and analysis
72
Scientific research and development
74
Other professional, scientific and technical activities
81
Services to buildings and landscape activities
NOMIS, Office for National Statistics
These sectors were identified as those ‘most likely’ to include engineering activities and company
contacts were purchased from Experian based on the sector selections. However, a further set of
screening questions were asked at the commencement of each interview to confirm eligibility prior to
completion of the full questionnaire.
4.3 Company Background
The first section of the survey collated information detailing the profile of participating businesses,
including organisation/company type (public or private sector), business activities, age of business,
company size, turnover and occupational profile.
4.3.1
Company Type
As Table 4.2 illustrates, almost all survey respondents classified themselves as being private limited
companies with 2.7% being sole traders and a further 2.7% being public limited companies. This
breakdown is broadly reflective of the proportion of private companies undertaking engineering related
activities.
Table 4.2 Company Type
Type
Number
Percentage
3
2.7
Private Limited Company
106
93.8
Public Limited Company
3
2.7
Partnership
1
0.9
113
100
Sole Trader
TOTAL
4.3.2
Activity Profile
Section 4.2 above has already detailed the sectors from which respondent companies were drawn. What
is of greater relevance is to understand the range of business activities that respondent companies are
engaged in. Table 4.3 provides examples of the array of engineering and advanced manufacturing
activities respondent companies were involved with.
Table 4.3 Business Activity and Market Profile (Examples)
Description of Business Activity
Construction Engineering
Automotive Consultancy Services
Aerospace Engineering
Machine tool service, additive manufacturing, laser
spares and service
Research and development in innovative electric
Supply and service of injection moulding machines
21
motor technology
Manufacture of major electric turbo charger and
solar system power electronics
Design and manufacture of medical devices and
equipment
Automatic Engine test facility
Testing and diagnostic services to the automotive
sector
Manufacture of parts for the motorsport, automotive
and defence.
Non-destructive industrial radiography testing on
aircraft, motorsport components etc.
Metal Plating Engineers
Aeronautical engineering
Engineering Services
Engineering services to Rolls Royce and BA
Systems
Prototype engineering using CNC machines
Subcontract precision machinists
Design and manufacture of measuring instruments
for academic researchers (medical research,
physics etc.).
Civil Engineering
Ecorys Survey
As can be seen from the descriptions provided, engineering and associated skills and competencies
pervade a wide variety of business activities within manufacturing, advanced manufacturing and specified
engineering sub-sectors. The above table also serves to highlight the plethora of disciplines that
incorporate such skills. Such an array of disciplines and activities have important implications for skills
requirements of companies and indicate the potential need for bespoke and in-house training, an issue
discussed in greater detail later in this analysis.
4.3.3
Company Size
As in the case of sectoral profile, the breakdown of the survey sample by company size is broadly
reflective of the engineering business population as a whole which is dominated by SMEs employing 10
or fewer staff. Almost two thirds of the companies surveyed employed under 10 staff, with a further 31%
employing between 11 and 49 staff. Only 10.6% employed more than 50 staff. This size profile also
reflects the niche activities of many companies engaged in engineering and the fact that many operate in
cutting edge technologies.
It was important for this research to obtain the opinions of smaller firms operating in the sector as their
skills issues and requirements often differ significantly from larger companies. It is also the case that
these skills issues are often ‘drowned out’ by those of the larger companies, which often form the basis of
most national and local policy interventions.
22
Figure 4.1 Size of Business
.9%
250+ Employees
9.7%
Company Size
50-199 Employees
31.0%
11-49 Employees
22.1%
6-10 Employees
36.3%
0-5 Employees
.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Percentage (%)
Ecorys Survey (Survey Response = 113)
4.3.4
Age of Business
Given the company size profile it might be expected that the age profile of companies would be
dominated by new business start-ups, fledgling businesses and companies chasing rapid growth and
development. However, as can be seen from Figure 4.2 below, over half of all companies surveyed (51%)
have been established for at least 20 years with a further 1 in 6 companies (18.6%) having been
established for between 11 and 20 years. This indicates that the LEP area has a stable business profile,
which is a particular strength, but also may be indicative of a limited influx of new business start-ups. The
age profile of the other key growth sectors, as identified by central Government policy, is not too
dissimilar to the overall survey population.
23
Figure 4.2 Time Since Establishment
51.3%
More than 20 years
18.6%
Years Established
11 - 20 years
15.9%
6 - 10 years
8.8%
3 - 5 years
5.3%
1 - 2 years
.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Percentage (%)
Ecorys Survey (Survey Response = 113)
4.3.5
Turnover
Associated with company size, the survey also sought to interview companies with varying turnovers from
less than £100,000 through to £10,000,000. Turnover is the best proxy by which to measure the
performance of a business as it is almost impossible to obtain profitability figures.
As is often the case with responses to turnover, a significant proportion of companies (52.2%) did not
wish to provide information, which means the analysis must be treated with a degree of caution. However
of those that did (54 companies), there are no clear trends with a relatively even spread across each of
the turnover brackets. What is of particular interest, however, is the high proportion of companies with
turnover in excess of £10 million. When comparing turnover figures to company size, it becomes clear
that the smaller companies are highly successful and make significant contributions to the economic
prosperity and sustainability of the LEP spatial area. 58.4% of respondent companies employ less than
10 staff, but almost the same proportion (55.6%) reported a turnover of at least £1 million.
24
Figure 4.3 Company Turnover
25.0
20.4%
18.5%
Percentage (%)
20.0
14.8%
14.8%
15.0
11.1%
11.1%
10.0
5.6%
5.0
3.7%
0.0
Company Turnover
Ecorys Survey (Survey Response = 54)
4.3.6
Location of Suppliers
All businesses operate within, and are supported by, a network of local, regional, national and
international suppliers. The long-term sustainability and growth of a locality is predicated on maximising
the usage of locally based suppliers and minimising the outflow of expenditure to different spatial
locations. However, it can also be argued that an international supplier base also points to the presence
of an international export market for companies’ products and/or services.
The interpretation of this question needs to be explained as the percentages on both axes can be
confusing. By way of example, in taking the second column of Figure 4.4 below, this states that 9.3% of
respondents have a supplier base where between 11 and 20% are from the locality. In reviewing Figure
4.4 in greater detail, there is a concerning statistic that over one quarter (28%) have a supplier base
where less than 10% are located locally (within 10 miles). More encouragingly, 1 in 5 (20.6%) companies
use local firms for between 91 and 100% of their supplies.
25
Figure 4.4 Proportion of Suppliers Based Locally
30.0
28.0%
25.0
Percentage (%)
20.6%
20.0
15.0
12.1%
9.3%
10.0
7.5%
6.5%
6.5%
4.7%
5.0
2.8%
1.9%
0.0
Proportion of local suppliers
Ecorys Survey (Survey Response = 113)
4.4 Employment
Following on from providing a general profile of their business, respondents were asked a series of
questions relating to their workforce, with particular emphasis on understanding where they live, how staff
numbers have changed and the occupational profile of the workforce.
4.4.1
Staff Numbers
Respondents were first asked the travel to work distance of their employees, together with any changes
to staff numbers over the last 12 months. With reference to the former, almost two thirds of companies
(60.2%) have more than 90% of their workforce living within 10 miles of the plant, factory or office.
Company responses to changes in staff numbers served to identify some very positive trends that mirror
the views of many stakeholders (particularly within the Automotive Sector) in terms of the levels of
optimism for future expansion of advanced manufacturing and engineering activities. This is explained in
part by the repatriation of work from overseas and British manufacturing’s strengths in high quality, high
specification products. In the 12 months prior to them completing the questionnaire, over one quarter
(27.4%) of respondents stated an increase in their staff numbers, with a further 54% indicating that their
staffing levels had remained the same. Only 18.6% of respondents stated a decrease in staff numbers
and these decreases were characterised by the loss of only 1 or 2 individuals in the majority of cases.
26
4.4.2
Occupational Profile
Determining the occupational profile of the workforce is important in facilitating the identification of skills
interventions and where the focus of such interventions should be targeted. As Table 4.4 illustrates,
advanced manufacturing and engineering activities are dominated by three particular occupational
profiles. Firstly, there are a high proportion of managers and senior officials who are responsible for the
day-to-day running of their companies and for the strategic decisions affecting future growth and
sustainability. Secondly, there are a higher proportion of skilled trades and process, plant and machine
operatives, which often reflects the nature of the products and processes being developed in these
companies. Thirdly, and associated with the lack of customer facing activity, there is a lower than average
proportion of elementary, personal service and sales and customer service occupations among survey
respondents. This trend in occupational profile lends further weight and justification to focus greater
attention on high level, technical and trade skills.
Table 4.4 Occupational Profile
Occupational Level (SOC
Codes)
Average Proportion of
staff at each level
Managers and Senior Officials
26.18%
Professional
8.97%
Associate Professional and
Technical
8.40%
Administrative and Secretarial
9.81%
Skilled Trades
21.22%
Personal Services
0.10%
Sales and Customer Service
3.57%
Process, Plant and Machine
Operatives
19.40%
Elementary
3.51%
4.5 Skills Gaps and Shortages
This sub-section of the survey analysis sought to establish both the extent and nature of the skills gaps
and shortages manifesting themselves in workplaces. As a result of discussion between Ecorys and the
LEP Steering Group, emphasis has been placed on the identification of technical skills gaps and those
occurring at Associate Professional and Technical, Professional and Management and Senior Official
level. There is a tendency for studies of this nature to focus on ‘softer’ skills gaps and shortages
pertaining to team working, confidence building, basic literacy and numeracy and other more transferable
skills.
27
Figure 4.5 Skills Gaps and Shortages
30.1%
Yes
No
69.9%
Ecorys Survey (Survey Response = 113)
As can be seen by Figure 4.5 above, almost one third of companies (30.1%) stated they were suffering
from skills gaps or shortages, a figure that is significantly higher than the national figure, as reported in
the Annual Workforce Survey, of approximately 15%.1 Whilst it is significantly higher than the all sector
average, it is not unsurprising for a greater proportion of advanced manufacturing and engineering
companies to suffer from skills gaps and shortages given the continued and often rapid technological
advancements, legislative amendments and changes to consumer preferences. That said, this figure
alone serves to highlight the difficulties engineering companies are having in identifying and updating the
skills requirements of their staff.
4.5.1
Nature of the Skills Gaps and Shortages
As discussed above, emphasis has been placed on identifying the higher level and more technical skills
gaps that are hampering individual company development and wider industry and sectoral growth.
However, before discussing the specific skills gaps and shortages, it is important to outline a number of
trends associated with the overall findings.
Firstly, both company respondents (particularly those companies employing fewer than 10 staff) and
stakeholders were quick to point out a lack of people with multi-disciplinary skills. The sectoral and activity
profiles of respondent businesses have clearly illustrated the diversity of activities and associated skills
required to succeed in advanced manufacturing and engineering. In smaller companies, it is important
that staff possess a number of technical skills. One example commonly put forward by businesses was
the lack of material characteristic knowledge among designers. Technical drawers and graphic designers
1
UKCES, 2011 Employer Skills Survey, p.8. Note that the 15% figure is the incidence of either skill-shortage
vacancies or skill gaps.
28
will design new products and components utilising a particular material (e.g. rubber) without
understanding its characteristics and limitations. In turn this often results in prototype developers and
manufacturers having to ‘rein in’ design expectations. Companies argued that graduates tend to focus on
one particular facet or discipline of engineering and have little or no knowledge of related disciplines or
activities.
Secondly, companies cited a lack of traditional engineering and trade skills among new recruits in the
industry. All sectors, irrespective of activities and disciplines, have seen a significant and continued
increase in the use of new technology and technological advancements. It was argued by a number of
companies, predominantly SMEs, that this technological advancement was leading to a loss of manual
and skilled trades. New entrants to the workforce can utilise new programmes and software, but are
unable to deliver similar outcomes in the absence of that technology.
Thirdly, and arguably the most important trend was the clear distinction between the perceptions and
priorities of larger companies and those SMEs that form the wider supply chain (or operate in particular
sub-sectors and niche activities). Very often, industrial policy at all spatial levels is driven by those
organisations that ‘shout loudest’ and ‘have the ears’ of key decision makers and this would appear to be
the case with engineering. National policy has long been ‘obsessed’ with the issue of skills, a trait borne
out of the Leitch Review of Skills in 2006, a document that positioned the UK behind other developed
nations such as France, Germany and the US in respect to both the overall skills profile and the
perceived shortage of high level skills in the workforce. This ‘alarming’ finding served as a catalyst for
successive National Skills Strategies aimed at closing the productivity gap between the UK and major
competitors.
Whilst the provision of a skilled workforce undoubtedly contributes to wider economic sustainability,
growth and prosperity, the relative importance placed on skills gaps and shortages appears to differ
significantly between large corporates, such as Jaguar Land Rover, Tata and Rolls Royce and smaller
companies that formed the basis of our employer survey. In the case of the former, a lot has been made
about the shortage of skilled engineers, not only locally, but also nationally. Both Tata and JLR have
sought to recruit engineers from their localities and import engineers from overseas, particularly central
and Eastern Europe, India and the Far East. However, for SMEs, skills gaps tend to occur in respect of
leadership and management, machinists and operatives. In addition, and as will be argued in later
subsequent sub-sections, SMEs place greater emphasis on other barriers aside from skills shortages.
Having highlighted the presence of skills gaps and shortages among the survey population, and having
identified different priorities depending on company size and place in the supply chain, it is important to
understand the specific nature of these skills gaps and, in particular, the types of skills gaps and
shortages by occupational level.
Table 4.5 Skills gaps and shortages by occupational profile
Occupational Level (SOC Codes)
Skills Gaps and Shortages
Managers and Senior Officials
Leadership and Management, Man Management,
Information Technology and Financial
Management, Marketing, Knowledge of export
markets (particularly among high growth
companies)
Professional
Supervisory and management skills, product
design and development, design engineers,
software programming and engineering, Operating
29
Systems Programmers
Associate Professional and Technical
Electrical Engineers, Mechanical Engineering,
Structural Engineers, Manufacturing Engineers,
CAD Drawing, Electronics, Metrologists, Robotics
Administrative and Secretarial
Communication, Customer Service, Information
Technology
Skilled Trades
Motor Mechanics, Precision Engineers, Multi-skilled
Machinists, Automotive Engineers
Personal Services
Care Staff, Customer Service
Sales and Customer Service
Communication, literacy and numeracy,
Transferable Skills, Information Technology
Process, Plant and Machine Operatives
Usage of new machinery, Technological change,
Professionalism, Transferable Skills
Elementary
Basic Skills and Transferable Skills, Motivation,
Time Keeping
Focusing first on higher level skills (Occupational Levels 1, 2 and 3), as this has formed the emphasis of
LEP skills activities, there are some clear requirements that were repeatedly identified by respondents.
Among SMEs, there was significant need for Leadership and Management skills, incorporating an
improved knowledge of export markets, promotional and marketing activities and better usage of ICT.
Knowledge of export markets was a particular issue for those companies seeking more rapid growth and
expansion and those with existing linkages to parent and partner organisations. Among SMEs, across all
sectors, there is the need for leadership skills in areas such as finance, training, recruitment and business
planning.
For larger companies (incorporating Tier 1 and Tier 2 suppliers) key skills gaps were identified in product
design and development, software programming and Operating Systems Programmers. Engineering
skills gaps were also highlighted in the electrical, structural, mechanical and manufacturing disciplines.
More specifically, there was a perceived need for metrologists and robotics technicians. Further down the
occupational profile, SMEs stated the need for CAD technicians, electronics and multi-skilled machinists,
the latter being a significant issue for many.
4.5.2
Company Actions to Respond to Skills Gaps
As identified and discussed above, there is a clear distinction between the issues facing large corporates
and SMEs that form the wider supply chain. These different issues necessarily lead to different company
responses to dealing with them.
Looking first at the larger companies, volume of available and appropriate skills, particularly engineering,
appears to be the primary concern. There is widespread optimism regarding the likely growth of the
automotive and aerospace sub-sectors, but there is concern that opportunities derived from this growth
will not be maximised due to a shortage of appropriately skilled staff. The larger companies are seeking to
tackle this issue in three main ways. Firstly, companies like JLR and Rolls Royce have established their
own education and training courses that are linked to apprenticeships and higher education; courses that
seek to provide participants with the skills required for their organisation. Secondly, they are recruiting
individuals from within their supply chains, although this is having a detrimental knock-on impact for the
SMEs that are losing staff.
30
Thirdly, larger companies are widening the scope of their recruitment, increasingly employing skilled
engineers from abroad, notably central and Eastern Europe. As discussed in the previous section, the
short-term importation of skills can create a vicious cycle of de-skilling, depressed wages, reduced
employment opportunities for local residents and the outflow of skilled graduates to other parts of the
country. The smaller employers and stakeholders have highlighted that Coventry and Warwickshire is
already a net-exporter of graduate engineering skills, a situation that will only worsen if larger companies
persist in the long-term recruitment of engineers from abroad. As a short-term ‘fix’, skills importation may
not be all that harmful to the local population and will benefit business. However, longer-term
sustainability will necessitate an internalisation of the skills market.
This ‘internalisation’ of the skills market has not been lost on SME survey respondents, the majority of
whom highlighted the importance of local recruitment. As travel to work data from the survey illustrated,
almost two thirds of companies employ 90% of their staff from within a ten mile radius of the company
premises. For SMEs, importance was placed on receiving employment prospects with a strong foundation
in engineering, technical competence and the right attitude. They were more than happy to teach and
mentor staff to provide the specifics or train individuals in the particular technologies or requirements of a
given time. SMEs were strong in their support of the locality and in providing opportunities for the local
population. In should be noted, however, that some of the skills required by SMEs can be categorised
within the lower occupational levels making internal training a viable option for ‘up-skilling’.
4.5.3
Organisational Response
There was a general consensus that improvements to workforce skills and to education and training
courses needs to be driven by employers themselves, in partnership with both public and private training
providers. It was considered that there was not much of a direct role that could be played by either the
local authorities or the LEP. Their role would be more than likely restricted to that of a facilitator, providing
the environment to enable policy makers, employers and training providers to come together to address
skills gaps and shortages and develop a more proactive and rapid response to the immediate needs of
industry.
4.6 Engagement with Training
The previous sub-sections have served to identify the key skills gaps and shortages, with clear
distinctions made between the skills gaps of large corporates and those facing SMEs and companies
forming part of the wider supply chain. Respondents were also questioned on the approaches and
mechanisms implemented to address their skills gaps and shortages. The most obvious and common
approach to up-skilling the workforce and ensuring continued professional development is engagement
with training.
In recent years, and largely as a result of prevailing economic conditions, access to formal education and
training has been restricted within many companies whatever their sector, activity or discipline. Focus has
been on immediate and short-term survival with training budgets reduced to cover operational costs and
ensure longevity of business activity. However, concerns have been raised relating to the UK’s capacity
to recover from recessionary impacts and return local, regional and national economies to sustainable
growth. The continued and unabated retraction and retrenchment that has taken place in UK, European
and US economies has led to redundancies at all occupational, qualification and skills levels. This has
resulted in a loss of core and high level skills that will be required when the economy and particular
sectors recover. Unless such skills can be replaced, the opportunities offered via economic recovery and
growth will not be realised.
31
This recognition of the need for replacement skills and new skills requirements has led to increased
engagement in training, a point supported through this survey, where more than 4 in 5 companies
(85.8%) have engaged in training over the last 12 months. This represents an encouraging figure, a
significant increase upon results from previous Ecorys skills surveys, and serves to highlight an
increasing optimism among advanced manufacturing and engineering companies. Engagement with
training is critical to the long-term success of advanced manufacturing and engineering companies given
the continued legislative and technological changes that influence the trajectory of particular activities and
disciplines.
Figure 4.6 Engagement with Training
14.2%
Yes
No
85.8%
Ecorys Survey (Survey Response = 113)
4.6.1
Type of Training
Respondents that had stated their engagement with training were then asked to state the type of training
they provide to the workforce. The vast majority of companies (78.4%) that engage with training deliver at
least some of their training via internal staff. Just under two thirds (60.8%) undertake formal training and
development offsite and almost 2 in 5 companies (37.1%) undertake more informal ‘on the job’ training.
The proportion of companies undertaking informal training increases as company size decreases.
Of interest, given the specific nature of some of the work in sectors such as ICT, Professional and
Scientific, Manufacturing, Construction and Health, only 1 in 10 companies provide staff with bespoke
training. It might be expected that this figure would be higher, although a large element of bespoke
training is likely to have been covered within on the job and in-house training options. Compared to other
skills surveys undertaken by Ecorys, a higher proportion of engineering companies utilise external training
provision, reflecting the technical requirements of the industry and the need for a greater proportion of the
workforce with Undergraduate and Postgraduate (Level 4+) qualifications.
32
Table 4.6 Type of Training
Training Type
Proportion
In-house training
78.4
Off the job training
60.8
On the job training
37.1
Distance learning
5.2
Online courses
7.2
Bespoke training
9.3
4.6.2
Accredited Training
Having discussed the type of training delivery that is most commonly implemented with respondents, the
questionnaire went on to consider the relative importance and usage of accredited training. Looking first
at the proportion of accredited training used, there is a polar relationship with higher proportions of
companies at either end of the scale. Of the 97 companies that have engaged with training,
approximately half (50.5%) use accredited training for between 1 and 10% of their overall training
programme. Conversely, 1 in 5 companies used accredited courses for between 91 and 100% of their
training needs. This polarisation highlights two issues: that accredited training is often undertaken to fulfil
legislative requirements and that it is not as important to SMEs as practical and responsive provision
delivered in short courses and modular formats. Relevance and responsiveness take greater credence
than certificates and qualifications, a point supported by the fact that more than 1 in 3 respondents
(35.1%) consider accredited training to be unimportant.
The types of accreditation most commonly used fall into three main categories. Firstly, there is the
industry and sector specific training (examples including Builders and Master Craftsmen accreditation,
Chartered Engineering and Surveying, Technician Training and CAD). Secondly, and most commonly
there is significant usage made of National Vocational Qualifications (NVQs), particularly Levels 2 and 3
and City and Guilds training. Thirdly, and an area of training particularly important in engineering and
manufacturing, there is training relating to specific legislative requirements, the most common being
Health and Safety. In addition, it was interesting to note the prevalence of Apprenticeship training within
respondent companies, particularly given the relative emphasis and importance placed on
Apprenticeships by stakeholders.
Overall, just over one third of companies (35.8%) viewed accredited training as very important. Just under
one quarter considered it to be quite important and 40% stated accredited training was not important at
all.
4.6.3
Satisfaction with Training
Survey respondents were asked to state their levels of satisfaction with training in five areas: availability,
quality, range, affordability and relevance. The analysis below is based on all 113 business respondents.
33
Figure 4.7 Satisfaction with Training
Relevance
Affordability
Very dissatisfied
Dissatisfied
Range
Satisfied
Very Satisfied
Quality
Don't know/Not applicable
Availability
.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Percentage (%)
Ecorys Survey (Survey Response = 113)
Taking an overall view of Figure 4.9 above, there are very similar trends across all five categories
discussed. It is important to note that a significant proportion of companies did not know a suitable
response to these questions, meaning that the analysis below should be treated with some degree of
caution. The fact that 2 in 5 companies were unable to provide meaningful responses to these questions
is an important finding in itself for two interrelated reasons. Firstly, this trend identifies the lack of
awareness and/or understanding of training offered to engineering companies and, secondly, highlights
the difficulty training providers face in improving training and making it more relevant to employers.
Across all 5 criteria, between 11 and 13% of respondents stated they were either dissatisfied or very
dissatisfied with the external training offer, whilst approximately 2 in 5 stated they were either satisfied or
very satisfied. This is a broadly positive response but still indicates a need for improvements to be made
to training, particularly if the trend for increased employer contributions to training costs continues.
4.6.4
Barriers to Training
Although respondents were asked to consider whether there were any barriers to training an
overwhelming majority (84.1%) stated there were no barriers, leaving only 15.9% in a position to identify
barriers. Among the 18 companies that did identify barriers to training, the most common were lack of
courses locally (11 of the 18 respondents), lack of customised and responsive training (6 respondents)
and cost of courses (3 respondents), although clearly the sample sizes for these are small. The most
interesting finding from these results is the lack of customised training courses. In the previous section,
stakeholders identified the concept of ‘late customisation’, wherein the foundations of engineering and
key principles are built upon through the provision of customised modules that respond quickly to
immediate and often short-term industry and company requirements. Should a model of HE provision be
34
implemented that reflects this viewpoint, then the issues of relevance and responsiveness should become
less of a problem.
4.6.5
Design and Delivery of Training
There has been a long-standing tension between training providers and employers with respect to training
provision, a tension summed up in the following quote from a respondent business:
‘Employers state that training providers fail to offer the courses and provision that the industry needs,
whilst training providers argue that employers are unable to effectively articulate what their short, medium
and long-term training requirements are’.
The simplest solution to this tension is more effective engagement and discussion between employers
and training providers. Respondent businesses stated that the sector needs to significantly improve the
sharing of knowledge among employers and between employers and training providers. This could be
achieved, in part, through the provision of more regular industry-wide skills assessments that would
provide a baseline against which trends could be identified and assessed. This could form an element of
work for the current Sector Skills Councils, notably SEMTA. At a more local level, business networks
should be established that facilitate the coming together of companies to discuss individual business and
wider industry requirements.
In addition, there is growing support for employers becoming engaged in both the design and delivery of
training. Of the 113 respondents, 1 in 5 is engaged in either the design or delivery of training. With
reference to the latter, this tends to relate to vocational learning, apprenticeships and the provision of
formal work experience placements for engineering graduates. In addition, some employers are invited to
run seminars and workshops in schools, colleges and universities in order to attach practical experience
to theoretical knowledge.
As already discussed, the stakeholder section identified the concept of ‘late customisation’, which would
facilitate the development of a more responsive skills system. This concept requires the development of
specific modules to be ‘bolted on’ to existing courses to address short-term and industry specific issues.
Such an approach would be driven by employer requirements and could be designed by the industry
itself, rather than relying on design via training providers. The modular approach negates the need for
design of entirely new courses, thus minimising the input of employer resources to develop them.
4.7 Vision, Strategy and Forward Planning
Survey respondents were asked to identify whether or not they had plans, policies and mechanisms in
place to facilitate the training and on-going professional development of their staff. Responses to a
number of specific questions are detailed in Figure 4.8 below.
35
Figure 4.8 Business Planning and Training
33.0%
Training Manager
35.2%
Available Training Budget
45.0%
Training Needs Assessment (TNA)
53.2%
Continuing Professional Development (CPD)
56.4%
Training Plan
66.2%
Internal Staff Appraisal/Review
68.6%
Business Plan
.0%
10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Ecorys Survey (Survey Response = 113)
Given the size of the overall sample, analysis has been restricted to assessment of overall findings as
outlined in the chart above. Arguably, there are some concerning statistics in the chart above, most
notably those percentages for business planning, staff appraisal and training plans. Whilst representing
the highest proportions, it was concerning to note that one third of all companies do not have an
established business plan in place and that the same proportion fail to implement internal staff appraisals
and reviews. Whilst company size has not been cross-tabulated due to the overall size of the sample,
previous research undertaken by Ecorys has shown that a negative correlation exists between size and
business planning. The smaller the company, the less likely they are to engage in business planning and
internal staff appraisals.
Perhaps unsurprisingly given the current economic climate, a far lower proportion of survey respondents
retain a ring-fenced internal budget for training and development, a situation that again becomes more
prevalent among SMEs whose primary and immediate focus is short-term survival. This finding again
lends weight to the debate regarding the relative importance of skills gaps for larger and smaller
companies.
4.8 Future Skills Requirements
When asked to comment on the current skills gaps and shortages apparent in their businesses, almost
three quarters of respondents stated they did not suffer from any. Their response to this question was
influenced by two labour force issues. Firstly, the pool of available and skilled labour has increased
significantly following the almost exponential growth in unemployment over the last two years, making the
prospect of recruitment less daunting. Secondly, companies, particularly SMEs, are simply looking to
36
survive into the short-term. This has resulted in staff undertaking numerous corporate roles and covering
the duties of staff made redundant in order to ensure cost efficiencies. However, once the economy
begins to recover, many companies who have sought to ensure short-term survival will not be as well
placed to benefit from the upturn in fortunes predicted by many industry representatives
When asked about the future skills requirements for their company and for the wider local economy as a
whole, the most common responses centred on five main areas.
Technical and Sector Specific Skills: A high proportion of companies stated that technical and sector
specific skills will remain and become increasingly important. Such skills were of particular importance
among larger corporates and included engineers, hardware and software designers, metrologists and
robotics
Information Technology: This was arguably the most commonly cited requirement of companies, with a
need for more ICT proficient staff in all sectors and across all occupational levels but particularly within
Management and Supervisory roles.
Management and Leadership Training: This type of training is always flagged up in skills surveys and
relates strongly to the higher occupational levels and to the smaller companies that often have managers
that lack business acumen and leadership, financial and team management skills. They have often come
up with the idea for a marketable product but do not know how to effectively manage the business.
Machine Operatives: Many of the technical and high level skills outlined above, whilst relevant to SMEs,
are of greater significance to larger companies. For SMEs, a critical shortage manifests itself in relation to
skilled machine operatives, primarily involved in the mass production of particular components for the
automotive and aerospace industries. As discussed earlier, SMEs are happy to train new employees on
particular aspects of their business, including usage of machinery, provided they have a strong skills and
experiential foundation in appropriate activities and disciplines.
Industry Experience: Lastly, and arguably most importantly from the standpoint of SMEs and high
growth companies, respondents stated the need for individuals with higher levels of industry experience.
This can be obtained via vocational training and work experience, particularly Apprenticeships, which now
hold a more prominent place within the training environment. Many stated that graduates and new
recruits know all the theory but lack the capacity to channel it effectively within a business context.
4.9 Business Performance
A short section at the end of the business survey questionnaire sought to obtain views on the
performance of businesses and their perceptions of likely performance moving forward. Key issues
discussed included the quality of their local area, concerns regarding a loss of skills, possible barriers to
growth and potential for improved business performance moving forward.
4.9.1
Local area as a place to do business
Looking first at the issue of location and the relative business perception of their locality as a place to do
business, the results are broadly positive. Focusing on Figure 4.9, which details findings for the whole
survey population, two thirds (66.3%) consider their locality to be a good place to do business, with 27.4%
stating their locality is a very good place to do business. Only 3.5% consider their locality to be a poor or
very poor place to do business, although one quarter (25.7%) of respondents only consider their locality
to be an average place to do business.
37
Figure 4.9 Place to do business
38.9%
40.0
35.0
Percentage (%)
30.0
27.4%
25.7%
25.0
20.0
15.0
10.0
3.5%
4.4%
5.0
0.0
Very Good
Good
Average
Poor
Don't Know
Rating
Ecorys Survey (Survey Response = 113)
Reasons for positive perceptions of their area included strong transport links, proximity to London, a
strong customer base and a strong local business climate (characterised by clustering of activity,
particularly in relation to automotive and aerospace industries). Negative reasons given related to
dilapidation in certain locations and the need for further town centre redevelopment. An important
strength for Production, Professional, Scientific and Technical businesses was the strong network of
universities and higher education institutions. However, as discussed below, there were some interesting
findings in relation to graduate retention.
4.9.2
Loss of Skills
Results from the business survey show that three quarters of respondents of companies do not consider
retirement and the associate loss of skills to be a major issue. However, this is lower than previous skills
surveys, where proportions of between 85% and 95% have been recorded. Of those companies that did
express concern, the primary issue was the loss of skilled trades and ‘hands-on’ experience. Graduates
and new entrants into advanced manufacturing and engineering disciplines have high levels of theoretical
knowledge and extensive knowledge of IT and computer software programs, skills that will undoubtedly
be required as the sector continues to become more automated.
A number of companies identified mentoring as a potential solution to the perceived loss of skills with
many already buddying new staff with more experienced members of their teams. This was a concept
that was also discussed in greater detail as part of the stakeholder consultations.
38
4.9.3
Graduate Retention
An interesting set of results occurred when companies were asked to consider the issue of graduate
retention.
Figure 4.10 Graduate Retention
3.5%
34.5%
Yes
No
Don't Know
59.3%
No Graduates
2.7%
Ecorys Survey (Survey Response = 113)
If we were to simply look at the ‘yes’ and ‘no’ responses, it could be assumed that the study area does not
have a problem with graduate retention. However, a statistic of some concern is that more than half
(59.3%) of all companies do not recruit graduates, a figure that appears to rise among SMEs employing
fewer than 10 people. The reason for this stark statistic is simple, experience. Companies stated that
graduates have impressive theoretical knowledge but lack the practical understanding to make the most
of it. Graduates also lack business acumen, which is a real problem for smaller companies, where staff
will have to perform a number of roles and responsibilities. However, there is a ‘chicken and egg’ issue,
an issue that serves to highlight the difficulties graduates and potential industry entrants face. How can
graduates be expected to obtain industry experience if either their degree courses or the wider industry
fails to provide them with that initial experience. The potential funding available through City Deal may
provide a ‘quick win’ opportunity in relation to graduate retention.
Given both the historical and continued significance of advanced manufacturing and engineering in the
West Midlands, and the LEP area mores specifically, it was interesting to find that Coventry is a net
exporter of engineering skills. This in part highlights the relative strength of local engineering graduates
but also calls into question perceptions of engineering shortages in the locality. There are job
opportunities and yet these are not being filled by local graduates. The ‘quick wins’ may relate to two
areas. Firstly, there are clear requirements for more formal arrangements in relation to work placements
and there may be prospects for the implementation of compulsory placements as part of undergraduate
and postgraduate degree courses. Secondly, the implementation of formal placements could act as a
39
catalyst for the establishment of employer networks, facilitating the availability of participant organisations
and more formal engagement with higher education and other training providers.
4.9.4
Barriers to Growth
The last couple of questions asked companies to consider whether or not they had any barriers to growth.
This was a particularly interesting issue for SMEs, for which skills are often not the principal barrier
restricting survival or longer-term growth and development. Barriers affecting SMEs tend to focus more
on management and resource deficiencies, including access to finance, a point borne out in findings from
this survey.
To begin with, businesses were asked to consider whether there were any other barriers inhibiting
performance and/or restricting growth. Perhaps it was to be expected, given current economic conditions
and current trends in consumer expenditure, that 2 in 5 survey respondents stated the prevalence of
barriers other than skills. Three of most commonly cited barriers were cash-flow, identified by 15.2% of
respondents, lack of capital investment, identified by 10.9% and access to bank finance, considered as a
barrier by 6.5% of companies. It was also interesting that 8.7% identified competition as a barrier. When
asked to elaborate on this issue, a number of SMEs highlighted the issue of staff poaching linked to large
corporations higher in the supply chain.
40
5.0 In-depth Employer Consultations
Summary
School Engagement
 Companies consulted were divided equally between those engaging with schools and those not.
 Those engaging typically provided work experience placements, gave talks or presentations and /or
attended careers evenings.
 Smaller firms were less likely to engage with schools due to limited resources and capacity to do so.
 There was concern that insufficient value is placed on manufacturing and engineering by schools
and/or that teachers and careers advisers had limited knowledge of the sector. Wider cultural factors
around the (low) prestige and value given to engineering in the UK were also acknowledged.
 Suggested improvements included: earlier engagement of pupils in ‘hands-on’ engineering activities;
getting employers involved in teaching; more site visits to observe industry in practice; and greater
value being ascribed to vocational qualifications and Apprenticeships.
Apprenticeships and Vocational Learning
 Experiences amongst companies taking on Apprentices were mixed due to some leaving prior to
completing their full term and / or a perceived lack of commitment amongst those taken on.
 Employers who had taken on Apprentices cited advantages such as an ability to train people ‘on the
job’, addressing recruitment and skills needs, and providing cost effective ‘instant labour’.
 Reasons for not taking on Apprentices included the time required to train them, the expense involved,
the specificity of the skill set required and a perceived lack of incentives to do so.
 The most common suggestion for increasing engagement with Apprentices involved greater provision
of financial incentives to firms and / or support with costs.
 There was widespread agreement that graduates lack the practical skills required by the sector.
Ideas to address this included placing greater emphasis and value on vocational qualifications,
incorporating greater work placement elements in degrees and closer academic – industry links.
Course Design and Delivery
 Perspectives were split evenly between those who felt that degrees were not of the requisite quality
and those who were broadly content with quality but who nonetheless questioned the limitations of
degrees in terms of providing practical skills.
 Re-designing degree courses to include a more practical focus was almost universally viewed as the
key change required. Ensuring that such qualifications required ‘more time on the shop floor’ was
seen as important, as was integrating a year in industry into more (or all) courses.
 Interviewees felt that courses in general (including degrees) were inadequate in terms of providing a
solid grounding in the principles of engineering, with the lack of practical focus again being raised.
 The view that employers should be encouraged or incentivised to engage more in the design and
delivery of courses was widespread, with the development of specific working groups involving
employers being advanced as a possibility in terms of inputting to design.
 Willingness to provide work placements varied, with a slight majority noting that they would be
unwilling to do so at the moment due to the time and resources required, the difficulty of doing so in
challenging economic times, a perception that this would prove disruptive to their operation and / or
not feeling that the company was suitable (particularly for shorter term placements).
Existing Workforce and Skills Profile
 The primary weakness discussed in relation to firms’ current workforce and that of the wider sector
41





concerned gaps in the recruitment and retention of skilled manual / technical workers.
Future skills needs discussed tended to relate to the focus of the business concerned and included:
machine operating skills (including automatic machinery / CNC machining skills), CAD, welding,
software design, and the skills required to turn prototypes and designs into actual products.
Where broader skills requirements were discussed, these tended to relate to problem solving,
practical manufacturing ability and greater integration of computer and engineering skills.
Mentoring and succession planning were widely seen as vital to the future growth of the sector.
However, barriers identified to this included a wider lack of focus on, and valuing of, engineering as a
career, relatively low pay, and the commitment and skills required for mentoring itself.
The use of recent retirees was raised by several of those consulted as a route to expanding
mentoring in a time and resource effective manner.
Other aspects raised for consideration in respect of the City Deal included: the development of a
larger and more specialised technical college in the area, a focus on promoting entrepreneurship,
running schemes to engage young people in vocational courses and ‘bring on the next generation’,
developing specific courses to prepare people to manage SMEs in the sector, developing a sector
based forum for local companies, launching a dedicated website advertising local jobs, and
promoting and marketing the City Deal itself to a higher degree than at present.
5.1 Introduction
Building on the stakeholder consultations and employer survey, in-depth interviews were carried out with
a series of employer representatives to further explore some of the issues arising from earlier stages of
the research. In line with the study focus and key themes emerging from the stakeholder consultations
and employer survey, the in-depth employer consultations focused on: engagement with schools; the role
of Apprenticeships and vocational learning; perspectives on the design and delivery of relevant training
and qualifications; views on the existing workforce and skills needs; and additional considerations likely to
be relevant to the City Deal.
This section presents the main findings from the 20 employer representative interviews undertaken, the
majority of which closely align with findings from the preceding stakeholder consultations and employer
survey. Prior to examining the themes discussed in the interviews in detail, the section first briefly outlines
the characteristics of the companies engaged in this phase of the research.
5.2 Companies Involved in the Interviews
The companies engaged as part of the in-depth employer interviews varied in terms of their size from
small micro-firms with less than ten employees through small to medium sized and larger firms. Table 5.1
below summarises this range. As this illustrates, the spread of companies is broadly similar to that
captured through the larger scale employer survey undertaken (see section 4).
Table 5.1 Companies engaged by size
Type of firm / number of employees
Number of companies consulted
Micro (0-9 employees)
7
Small (10-49 employees)
8
Medium (50-249 employees)
4
Large (250+ employees)
1
42
The staff employed within these firms mainly comprised of skilled technical staff who worked on the ‘shop
floor’. In most cases, other than the very small firms engaged, these technical staff were complemented
by those with dedicated managerial, finance or sales roles. The extent to which graduates comprised the
majority of the workforce varied notably, from firms where all or the majority of staff were of graduate level
to those with a workforce primarily composed of staff with lower qualification levels.
The core business activities of the companies engaged were similarly varied. Activities included the
production of specialist aerospace, medical, automotive and agricultural components; design of optical
measurement tools; engineering consultancy; manufacturing of assembly tools; tool grinding; prototype
design; and specialist polymer production. Several of the companies engaged were involved in highly
specialised forms of production, typically as part of wider supply chains, while others offered more generic
services aimed at supporting the wider sector.
5.3 School Engagement
As discussed in section 3 of this report, when and how to engage young people in discussions about
career options along with activities in the science, technology, engineering and mathematics (STEM) field
has been a source of on-going debate amongst employers, training providers and other relevant
stakeholders. There is a growing consensus that the engagement of young people in STEM activities and
the promotion of relevant career paths is important and that, moreover, industry itself has a significant
role to play in this. While the potential importance of such engagement was widely recognised amongst
the employer representatives engaged, around half reported that their companies had no real
involvement with schools.
Despite the fact that most representatives cited a willingness to engage with schools, the ability of their
companies to do so was seen as being constrained by several factors. Particularly amongst micro- and
small businesses there was a tendency to cite a lack of resources (in terms of time, capacity and money).
This was combined in some cases with a feeling that their firms were too small for any involvement to be
worthwhile. There was also a suggestion in one instance that local schools were often not interested in
engaging with SMEs, preferring to be involved with larger or more prestigious companies. Accepting this,
a minority of those not currently engaging with schools planned to do so in the future.
Those companies that did engage with schools were involved in a number of activities which included
providing work experience placements, giving talks or presentations in schools and / or attending careers
evenings. The benefits of giving presentations and attending careers were noted by one representative as
follows:
“Its invaluable, it offers us an opportunity to market not just ourselves, [company name], but also
the industry.”
The provision of work placements was the most common activity while, conversely, attending schools to
deliver or be involved with activities was much less common. Resource constraints were again cited as
an explanation for not being involved in such activities, though some representatives also noted that they
were unclear how they might engage with schools in this sense and / or that they had never been
approached to do so.
Reflecting the views of a number of stakeholders presented earlier in this report, there was widespread
concern amongst employer representatives that insufficient value was placed on manufacturing and
43
engineering by schools and / or that teachers and careers advisers had limited knowledge of the sector.
Comments here included the following:
“Teachers and careers advisors just don’t have enough contact with engineering to really
understand it or to be able to promote it.”
For some, the perception was that this scenario had worsened over the past few decades. Several
interviewees also linked this perceived lack of valuing, understanding and knowledge in respect of
manufacturing and engineering to wider cultural factors. From this perspective the situation in schools
was seen as reflecting the relatively low prestige, importance and value given to engineering in the UK.
Specific concerns raised by representatives in this area included:



A perceived lack of industry experience amongst teachers, with this being seen both as a recruitment
issue and as reflecting the lack of wider value given to manufacturing and engineering discussed
A perceived lack of up-to-date knowledge amongst staff in schools, particularly in light of rapid
technological change in advanced manufacturing and engineering
A general lack of promotion of engineering as a career option amongst both teachers and careers
advisers with this seen as reflecting, in part, wider declines in engineering and manufacturing.
As might be expected, suggestions for addressing these issues tended to focus on the need to attract
more teachers with industry experience into the profession along with ensuring a greater focus on
professional development to ensure that staff (including careers advisers) were more up to date with
industry developments. As one interviewee noted:
“You need people who have an industry background to work with those in the teaching
profession- they are the ones who can transfer the skills to young people which will be useful to
them in later life.”
Addressing these specific issues was also discussed in combination with a broader need to change
attitudes to engineering and manufacturing along with providing wider support for the sector.
Typically, employer representatives felt that issues such as those discussed above had contributed to a
lack of interest amongst young people in manufacturing and engineering professions. Coupled with an
aging workforce, this was seen as resulting in concerns that the sustainability of manufacturing and
engineering in the UK in the long-term was at risk. Previous Government policies encouraging young
people to go to university, rather than consider alternative vocational routes, were also cited as being an
issue in respect of this. Similarly, the closure or reduction in capacity of technical colleges was seen as,
as one interviewee commented, contributing to a “void in the knowledge and skills available” in the
industry.
Suggestions offered by employer representatives for more effectively promoting advanced manufacturing
and engineering careers amongst young people included:






Earlier engagement of pupils in engineering activities within schools
A more ‘hands-on’ approach to such activities, involving industry and designed to enthuse pupils
Getting companies more involved in teaching activities within schools
Increasing site visits to companies so that pupils can observe the industry in practice
Greater value being ascribed to vocational qualifications both in schools and more generally
Increasing the availability and accessibility of Apprenticeship opportunities.
44
5.4 Perspectives on Apprenticeships and Vocational Learning
5.4.1
Apprenticeships
The companies engaged through the employer consultations were divided fairly equally between, on the
one hand, those that currently had Apprentices or had done so in the recent past, and, on the other, those
with no Apprentices or which had not had Apprentices for some time. In part, this division reflected some
of the points recognised by other stakeholders discussed in section 3 of the report. In particular, it was
clear that the smaller companies involved in the consultations were less likely to have experience of
taking Apprentices on or to have plans to do so. Equally, the particular challenges for small companies in
respect of taking on Apprentices were widely noted.
Amongst those companies that currently had Apprentices or had done so in the past, views on the
benefits of this were mixed. Those representatives with more positive perspectives cited benefits such as
an ability to train people ‘on the job’, the (at least potential) long term benefits accruing from someone
staying with the company for some time (thus addressing recruitment and skills needs), and accessing
‘instant labour’ at a relatively advantageous rate. As one representative commented of Apprentices:
“The longer term benefits if they stay with you are considerable as they have learnt lots of
different skills working in the manufacturing environment and are hands on and involved rather
than sitting in front of a computer all day.”
In particular, the opportunity to provide training specific to the requirements of the company concerned
while limiting wage costs was seen as highly beneficial. However, in several cases this was balanced by
the recognition that significant investments could be made in young people only for them to drop out or
move on to other job opportunities.
This latter point was raised especially by those representatives whose companies had experience of
having Apprentices, but who were more negative about the experience and / or felt that overall the
benefits of doing so did not necessarily outweigh the costs (at least in the near term). As one interviewee
commented:
“The immediate benefits to the company aren’t that great…. So the apprenticeship programme is
good, but it takes a long time to nurture the skills of an apprentice and companies need people
with skills now.”
In addition to Apprentices leaving prior to completing their Apprenticeships, some interviewees noted that
after being trained Apprentices had left for larger companies able to offer better salaries and / or more
progression opportunities. This was seen as a particular issue for SMEs. In some cases a perceived lack
of commitment by Apprentices had also coloured the perspective of those citing more negative
experiences.
Amongst representatives whose companies had not taken on Apprentices, or did not plan to do so in the
future, the main reasons for this tended to revolve around resource constraints (both in terms of time and
money) and / or a view that the organisation concerned was too small to consider or benefit from
Apprentices. As one such representative noted of the potential to take on Apprentices:
“Obviously financial assistance would help…it needs a financial input from the government or
otherwise we can’t afford to do it.”
45
Equally, the specificity or level of skills required precluding the use of Apprentices was raised by
representatives of those companies with a particular high technology or high skills focus. For example,
one such representative noted that the company only took on graduates as a minimum and tended more
commonly to recruit at post-graduate level. More generally, the perceived lack of financial or other
incentives to take on Apprentices, with this being linked to a perception that costs would outweigh
benefits, was raised in several cases.
The most common suggestion raised to increase engagement with Apprentices involved greater provision
of financial incentives to firms and / or support with the costs involved in recruiting and training those
taken on. The issue of low wages for Apprentices was also raised in terms of making it difficult to attract
good quality participants. Some employer representatives also noted that the wider economic climate was
acting as a disincentive to taking on Apprentices. From this perspective, the successful promotion of
macro-economic growth and ensuring a more stable trading environment were seen as pre-requisites for
enhancing companies’ engagement with Apprenticeships.
5.4.2
Vocational learning
Employer representatives were also asked for their views on vocational learning more broadly. The main
perspective offered mirrored the views of some other stakeholders discussed earlier in the report; namely
that vocational learning at several levels was failing to adequately provide a practical grounding in the
technical skills required for advanced manufacturing and engineering. This was seen as being particularly
significant at the graduate level, with a widespread view that graduates lack the practical skills required
being offered. In particular, a perception that graduates lacked the ability to apply theoretical knowledge
to real life problems was cited by several interviewees. As one commented:
“They need to be actually on the shop floor doing it. My impression of graduates or degree
students is that they sit in an office and play around with a computer and don’t understand how it
works on the shop floor.”
The decline of more practical qualifications such as HNCs and HNDs relative to degrees was also raised
by some of those consulted as being an issue for vocational training more broadly. Related to this, other
employer representatives discussed the fact that their companies’ skills requirements were primarily
below degree level and, therefore, a lack of practical skills amongst graduates was not such an issue.
Amongst this group there was strong support for the development of some form of technical college. As
one interviewee commented:
“If we could have some form of technical college in the area that would be fantastic. We aren’t
going to get instant rewards from that but it would have reseal benefits for the industry…all the
problems we are facing now stem from the demise of the apprenticeship as we know it.”
Employer representatives offered several explanations for what they perceived as a lack of a practical
focus or underpinning in vocational learning. These included a view that degrees could be overly
academic as opposed to practical in focus, that courses did not concentrate adequately on including
industry placements, and that some courses were out of date or not tailored adequately to the specific
(current and future) needs of advanced manufacturing or engineering. Comments illustrating this
included:
“Engineering degrees don’t seem to have a sandwich year in industry now and that is absolutely
what’s missing. You can’t prove a theory without putting it into practice – graduates need more
practical skills. Bridging the two is essential…”.
46
“The content of the courses they take are ideal on the theory side, you’ve just got to make sure
they’ve got practical skills, I mean most of the colleges used to have workshops, I don’t know if
they still do or not. They have got to have some practicability about them as well.”
Accepting this, some of those offering this view did acknowledge that they did not have a detailed
knowledge of course composition and that their perspective was based more on anecdotal evidence. This
included their own experience of employing individuals and, in one case, the differential ability and level
of practical orientation evident between foreign and UK graduates employed.
Several interviewees also made the point that that in most cases practical skills could only be gained by
more time directly working in industry. It was also noted that universities and other training providers
would inevitably find it difficult to keep up with changes in technology. Equally, the requirement for access
to specialist machinery was also raised in terms of the extent that universities and others could afford to
have such equipment ‘in-house’.
Suggestions to address such issues included placing a greater emphasis and value on technical
vocational qualifications relative to degrees, incorporating greater work placement elements in degrees
(including a year in industry) and closer academic – industry links more generally. For example, one
employer suggested the re-introduction of sandwich courses to allow graduates to gain the practical
experience needed to work in the sector.
5.5 Course Design and Delivery
5.5.1
The Importance of Practical Skills and a ‘Solid Grounding’
As alluded to above, while those interviewed offered some perspectives on course design, content and
delivery it was also common for interviewees to acknowledge that they had limited understanding of
actual design and delivery. Thus, for example, some interviewees found it difficult to comment on the
quality of relevant degrees when asked. Amongst those who did feel able to offer a view, perspectives
were split evenly between those who felt that degrees were not of requisite quality and those who were
broadly content with the quality of degrees.
Within the former group there was a common view that degrees typically did not provide an adequate
basic grounding in engineering which could then be built on in the workplace. This correlates strongly with
the perspectives of stakeholders discussed in section three with, in one case, an employer representative
noting that foreign graduates tended to have a better basic understanding of, or grounding in, the sort of
skills required. Another interviewee noted that:
“There is a real void between an academic and a commercial qualification.”
The view of graduates lacking the necessary practical skills was a related perspective amongst
representatives who felt degrees were not producing graduates with the requisite skills and ability. From
this point of view re-designing degree courses to include a more practical focus, perhaps learning from
those delivered in Europe, was almost universally viewed as the key change required. Reflecting the
views discussed above, and those highlighted in section three, ensuring that such qualifications required
“more time on the shop floor” was seen as important. Similarly, integrating a year in industry into more
(or all) courses was a common suggestion.
While representatives with this view recognised the costs and challenges in re-designing courses in such
a way, along with ensuring that students could use and access specialised machinery, it was nonetheless
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seen as important. Similar to the above discussion, stronger academic – industry links were seen as
essential to moving in this direction. This related both to facilitating the ability of students to gain more
hands-on experience with the latest technology and to enhancing the industry focused components of
degrees more broadly. Such routes to enhancing the practical focus of course content were seen as
important even amongst those who cited that they were broadly content with course quality.
5.5.2
The Role of Employers
The need to incorporate employer input into both the design and delivery of future courses was another
key theme arising. This was raised principally, though not exclusively, by those representatives who felt
that the quality and content of degrees was currently inadequate. The development of specific working
groups involving employers and educational representatives was advanced as the main route to
addressing this in terms of curriculum / course design. In terms of delivery, ideas such as greater use of
visiting lecturers and developing the aforementioned increased academic – industry links were raised.
However, the need to adequately incentivise or compensate employers to engage in such design and
delivery activity was also noted, particularly in light of time and resource constraints. Where specific
incentives were discussed these tended to be financial in nature in terms of recognising the cost of such
inputs to business. As one representative noted:
“Placements with outside industry and people from the commercial side need to be financial
rewarded for teaching and that kind of thing.”
The consultations also provided the opportunity to explore the willingness of companies to provide work
placements as part of course delivery. Levels of willingness to do so varied, with a slight majority noting
that they would be unwilling to provide placements at the moment. The primary reasons cited were the
time and resources required to do so, the difficulty of doing so in challenging economic times, a
perception that this would prove disruptive to their day-to-day operation and / or not feeling that the
company was suitable (particularly for shorter term placements). Amongst those more willing to offer
placements, some interviewees noted that their companies already did so, whilst others felt that there
would be potential benefits to doing so that would encourage them to engage in this activity.
5.6 Workforce and Skills Needs
5.6.1
Workforce strengths, weaknesses and future skills needs
Building on the employer survey, the in-depth consultations gave the chance to further explore issues
around the current and future skills requirements of the workforce (both in respect of particular companies
and the wider sector). In many ways the themes and issues raised closely reflected the findings
presented in section four of the report in respect of the employer survey.
In particular, the primary weakness discussed in relation to firms’ current workforce and that of the wider
sector concerned gaps in the recruitment and retention of skilled manual / technical workers. This was
linked by some to the perceived weaknesses in the school and education system noted above. As one
interviewee commented:
“Educating young people in a mind set of manufacturing and making something – this is what’s
missing. The commercial world is struggling as it is and cannot afford to get involved in giving
youngsters a good education because they are not given any support to do it…The funding has
got to come from the government and young people have got to be given the right skills in the
interim.”
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Other weaknesses reported were more specific to the firms concerned – for example, a difficulty in
recruiting compute aided design (CAD) technicians with adequate skill levels (ascribed to weaknesses in
local courses available to train individuals). Addressing such weaknesses had led a minority of
companies involved in the consultations to employ non-EU nationals. While some reported few issues or
barriers to doing so, others cited challenges over gaining work permits and other immigration related
issues as being the main challenges.
Representatives’ views on the strengths of the current workforce were generally related to the specific
firms engaged rather than the wider sector. These tended to revolve around particular specialisms held
within the workforce in terms of the particular skills utilised as part of their operations. Such skills
included, for example, high precision tool making and the use of computer numerical control (CNC)
machine tools and CAD. Interviewees typically felt that possessing such specific and specialised skills
within the workforce gave their companies the ability to compete effectively in a challenging environment.
This was notably the case amongst representatives of companies with a particular specialist niche or
focus within the wider sector and those reliant on high technology applications.
Future skills needs discussed similarly tended to relate to the focus of the business concerned and
included: machine operating skills (including CNC machining skills), CAD, welding, software design, and
the skills required to turn prototypes and designs into actual products. Where broader future skills
requirements were discussed, these tended to relate to problem solving, practical manufacturing ability
and the need for the greater integration of computer and engineering skills. Again, this presents a picture
similar to that emerging from the wider employer survey and is reflective of the increasing significance of
computer aided design and production within the sector.
5.6.2
Addressing Workforce Demographic Challenges
A key theme emerging from previous stages of the study and further explored through the in-depth
employer consultations concerned the challenges raised by an ageing workforce, retirement and the need
for up-skilling of new entrants. In relation to this there was a widespread view amongst employer
representatives that effective succession planning and the use of approaches such as mentoring would
be vital to the future growth and sustainability of the sector. However, several interviewees also noted that
there were significant barriers to successfully addressing demographic issues and that the scale of the
challenge was significant. As one representative commented:
“It needs people with time to be prepared to train the new generation of people up and the
government needs to provide funding for this. Older people could put their skills to good use to
enable other people to learn from them”.
The challenges noted tended to relate to the difficulty of ensuring a supply of new entrants to the
workforce with the requisite skills and experience due to a wider lack of focus on, and valuing of,
engineering as a career and the relatively low pay in parts of the sector. Equally, while the use of
mentoring was felt to offer significant potential benefits, interviewees also noted that the commitment and
skills required needed to be taken into account. The use of recent retirees was raised by several of those
consulted as a potential solution in this area, though again the potential challenges in recruiting such
mentors were also noted.
5.7 Additional Aspects for Consideration in Light of the City Deal Bid
Many of the themes covered in the employer consultations and discussed above were specifically
designed to elicit representatives’ views on issues of relevance to the City Deal bid. However, the
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interviews also provided the opportunity to explore any additional suggestions from those consulted that
might influence the focus of the bid. Additional aspects or suggestions raised included:

the development of a larger and more specialised technical college in the area;

a focus on promoting entrepreneurship, running schemes in disadvantaged areas to engage young
people in vocational courses and ‘bring on the next generation’;

developing specific courses to help people prepare for managing and owning SMEs in the sector;

developing a sector-based forum for local companies;

launching a dedicated website advertising local jobs in the sector (given the costs of advertising);
and,

promoting and marketing the City Deal itself to a higher degree than at present.
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6.0 Implications of the Study
This final section summarises the key implications arising from the research for consideration by Coventry
and Warwickshire LEP. The key stakeholder and employer representative consultations tended to
highlight a number of key messages which, combined with the employer survey and desk research, offer
a fairly consistent picture of the main implications arising. These main implications are summarised below
in order to help shape propositions and interventions to be presented in support of the City Deal funding
bid. The implications are also likely to be of relevance in the longer-term in the sense of informing the
development of a skills strategy for the LEP. The key implications can be summarised as follows:
1. A focus on ensuring the long term sustainability and competitiveness of the sector is required. This is
likely to start from a concentration on enhancing the supply of future skills through enhancing the
engagement of businesses in the sector with schools, colleges, training providers and universities.
2. Mechanisms to enhance the input of employers into the design of courses, training and qualifications
at all levels should be examined. The focus of this is likely to vary between levels but may include:
support for forums bringing employers and educationalists / training providers together to design and
deliver provision; support for networks or umbrella bodies of SMEs to ensure that their specific needs
are adequately determined and articulated; and encouragement of companies of different types and
sizes to engage in the delivery of courses or provide related inputs.
3. Alongside this, any influence to encourage the inclusion of more practical elements in degree courses
should be used, in particular longer term work placements or ideally the (potentially compulsory)
inclusion of industry years within degree courses. Conversely, attempts should be made to influence
employers to provide access to students to learn in a practical way about new technologies and the
operation of more recently developed high-technology machinery.
4. Specifically in respect of schools, there is a need to utilise any possible leverage to ensure and
enhance the quality and relevance of careers advice in respect of the sector. Amongst teaching staff,
consideration should be given to the potential for industry visits or short term placements outside of
term time (perhaps as part of CPD).
5. Given the issues highlighted around the ability to take on apprentices (particularly for SMEs), there is
likely to be benefit in considering models which share placements around with apprentices being
formally attached to larger employers. This would enable smaller companies to engage in this area
whilst reducing the costs and other burdens associated with doing so.
6. Evidence on the specific areas of skills gaps identified through the employer survey should be used
to influence the provision offered by educational institutions and training providers, allied to a focus
on encouraging flexibility and responsiveness in the delivery of provision.
7. Links should be explored with national programmes to access additional funding and inputs to
address some of the issues raised by the research. Examples might include STEMNET in respect of
engineering activities in schools and the leadership and management elements intended as a focus
of BIS activity under the Growth Review.
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