Research into
Advanced Manufacturing and
Engineering Services Skill Needs
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Agenda
• Terms of Reference and Methodology
• Size of Advanced Manufacturing and Engineering
Sector/ Importance to NI Economy
• Current Workforce
• Supply of Skills
• Demand for Skills
• Best Practice Interventions
• Areas for Development
Terms of Reference
• The overall research objectives are to:
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Define the sectoral footprint and size of the advanced manufacturing and engineering services
sector;
highlight the economic and statistical value of the sector and its importance to the Northern Ireland
economy;
assess the current skills profile of the current workforce (by qualifications) for the sector and
highlight the current demand of these skills;
analyse regional salary information across the advanced manufacturing/engineering services
footprint in UK and Ireland including a review of salary information by skill level, particularly at the
level of graduate and post graduate;
assess the supply of skills (lower, intermediate and higher levels) for the sector from our schools,
Further Education and Higher Education;
determine the future skill requirements for the workforce in the sector in Northern Ireland;
highlight any skill imbalances which currently exist or are forecast to exist;
identify what actions are needed to ensure that the supply of these skills in Northern Ireland is
sufficient for the sector; and
provide an evidence base for the development of an Action Plan for the advanced manufacturing
and engineering sector.
Methodology
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Stage 1: Project Planning and Initiation;
Stage 2: Secondary Research – Desk Research and Literature Review;
Stage 3: Consultations and Interviews with Key Stakeholders;
Stage 4: Survey;
Stage 5: Additional Stakeholder Interviews;
Stage 6: Modelling/Forecasting of Future Requirements for Skills and
Recommendations; and
• Stage 7: Reporting and Dissemination of Findings.
Importance of Advanced Manufacturing and
Engineering to Northern Ireland Economy
• The advanced manufacturing and engineering sector employs approx. 79,580
people in Northern Ireland (2013).
• The Northern Ireland Manufacturing Sales & Exports Survey 2011/12, DETI
(2012) estimated total sales by manufacturing companies in Northern Ireland at
£16.6 b. Exports £4.2b.
• Forecasts show that the sector is expected to marginally contract up to 2020 with
78,624 jobs forecast . Aerospace, agri-food and sustainable energy expected to
expand significantly. Manufacture of electrical equipment (SIC code 27.0), water,
sewerage and waste management (SIC codes 36.0, 37.0 and 38.0) and
manufacture of machinery and equipment n.e.c. (SIC code 28.0) also to expand.
Drivers
Technical
Change
Competition
and
globalisation
Demographic
change
BUSINESS
DRIVERS
Firms’
strategic
choices
Environmental
change
Consumer
demand
Literature Review – UK research
• UKCES 2012 noted that the number of STEM graduates has been rising across
UK. There were 285,000 science graduates and 46,000 engineering graduates in
2010/11, an increase of 14% and 28% respectively, since 2006/07- across the UK
• However 40% of STEM graduates are not working in STEM roles, but instead go
into Financial Services, Medicine and other roles.
• The Royal Academy of Engineering has estimated that there will be a shortfall
of over 1,000 STEM graduates per annum (2010-2020) across the UK.
• UKCES highlight Skills Gaps for managers in particular regarding strategic
thinking/ leading and managing change. Graduate skills gaps also identified (life
experience, technical or job-specific skills and poor motivation)
• 82% of Manufacturing companies have increased their investment in training.
Department of Quantitative Social Science at the
Institute of Education in 2011(LFS data)
The report concluded that many qualifications, but not all, have an increased value
for the individual (i.e. increased wages) and for the labour market, if they are in a
STEM subject area, and more so in engineering.
It highlights the fact that it is not enough to encourage young people to study in a
STEM area; they must also understand that some STEM qualifications have additional
value in the labour market over others; engineering related qualifications are valued
more than science related qualifications
Science, Engineering and Technology Technicians in
the UK Economy, Gatsby Trust (2012)
• The SET workforce is ageing and therefore fuelling high replacement demand
levels
• Number of graduates in SET technician employment has increased in the past
with 27% of associate professionals and 16% of skilled trades having a degree
qualification.
• Case study evidence and employer interviews suggested that employers are reevaluating the mix of graduate and intermediate level personnel in technician
jobs.
• HR policies starting to show changes to reflect the need to focus on retaining
existing experienced employees as well as recruiting talent
Literature Review – Key Findings
• The Department of Business, Innovation and Skills (2012) provided evidence on
the benefit of apprenticeships, via the conduction of 79 employer case studies
across eight sectors.
• They state that, while the cost of apprenticeships must be met by employers, this
investment can gradually be recouped over an average of three years and seven
months in the engineering sector.
• Benefits of training an apprentice include the means of attracting the highest
quality of recruits as the result of training which concludes in the acquisition of a
widely recognised qualification.
Employer Ownership of Skills: Building the
Momentum, UKCES (2013)
• UK Commission for Employment and Skills highlights the importance of building
employer ownership into designing any upskilling programme. It is based on the
learnings from 37 pilot projects set up in 2011 which found that:
– Employer ownership and responsibility drives jobs and growth
– Being customer focused and outcome driven ensures that businesses and people are
at the heart of how the skills system operates
– Routing the public contribution through the employer will create a single market for
skills where supply responds to genuine demand and public investment leverages
greater private investment
Low skills equilibrium and the Importance of
Innovation, University of Warwick (2008)
• University of Warwick reviewed the different approaches used by companies to
skills development and investment in the Manufacturing Sector. They developed
the term Low Skills Equilibrium (LSEq) to describe a situation in which companies
are involved in a vicious circle of producing low value add goods and services
with low profit margins and there is insufficient cash to train the employees to
move out of the situation.
• In order to break out of the LSEq it is necessary to raise employers’ demand for
skills. The report states that government policy is critical to supporting
development of clusters and promoting innovation in order to help organisations
adopt business strategies that involve moving up the value chain.
Manufacturing in the UK: An economic analysis of
the sector, BIS (2010)
• Found evidence of the upskilling of individuals across all occupational groups.
• Evidence of companies in a collaborative arrangements benefiting from one
partner hiring skilled workers, or the “poaching” of highly skilled workers from one
firm to another may cause R&D knowledge spill overs. Therefore benefits to the
wider economy from investment in skills may exceed private benefits to
individuals and firms
• The unpredictability of modern manufacturing, meant it was difficult for employers
to forecast future employment opportunities that will arise in future. This
uncertainty has discouraged some employers from investing in skills and training.
Supply
• The analysis of the supply of young people into the sector shows mixed results.
The number of A-level entries to Mathematics and Design and Technology has
increased by 13.7% over the last three years. However the number of entries in
STEM related GCSE subjects has decreased 2.5% over the same period.
• There were 2,640 graduates in courses relevant to advanced manufacturing and
engineering from Higher Education Institutions (HEIs) in Northern Ireland over the
last three years equating to an average of 880 people graduating per year.
• The numbers enrolling in STEM related FE courses have declined by 15.5% over
the last three years and now stand at 17,053 enrolments in 2011/12. Data on the
number of FE students coming from STEM related courses going into advanced
manufacturing and engineering occupations is not available
• The 2013 ApprenticeshipsNI figures show there were 996 participants in 2013
for STEM related apprenticeships, which indicates a 12.2% increase in total
participants since 2009.
• Department for Employment and Learning Statistical Bulletin: Professional and
Technical Enrolments in the Northern Ireland Further Education Sector for
2012/13.
Demand- Working Futures Model
• The Working Futures model projects the demand for skills as measured by
occupations and qualifications.
• This database has been developed over many years and is as consistent as
possible with all the official published sources upon which it is based. This
database was extended to cover 79 SIC2-digit categories in order to meet the
requirements specified in the Working Futures 2012-2017.
• Sources such as the Labour Force Survey, Office for National Statistics and BIS
are used to construct the database.
Demand for Skills for the Sector – Expansion,
Replacement and Net Replacement
• The bulk of the jobs in Advanced Manufacturing and Engineering are due to
replacement (ie people retiring or leaving the sector) rather than additional ( new
jobs)
• The Working Futures Model identifies that there will be a need for 3,000 net
additional jobs approx for NI over the next 7 years- for All industries..
• 1,300 per annum are needed to work in Advanced Manufacturing and
Engineering Sector in NI
• The others are expected to work in a range of roles including teaching, public
sector, sales/ customer service etc.
RSM Survey of Advanced Manufacturing companies
• Survey designed to cover all areas of the Terms of Reference. Some Steering
Group members involved in the design of the questionnaire
• Sent out to SEMTA data base of Members and to Advanced Manufacturing
companies who have worked with FE colleges and Economic Development
Officers to access as wide as audience as possible.
• 88 responses received and analysed
Skills Gaps
• Evidence from the survey respondents identified Skilled Trades as being the only
occupation as difficult to fill at present- but 47.8% of respondents noted they had
difficulties, recruiting:
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Systems design engineers and stress engineers;
CNC programmers/ engineers;
R&D Engineers;
Production managers/ engineers, Plant Engineers, Project Managers;
Manufacturing Systems Engineers ;
Electrical technicians;
Fitters;
Welders; and
Skilled fabricators.
Company Feedback
Reasons given as to why companies were not satisfied with the skills:
• Apprenticeships
– Young people immature when starting apprenticeship. Trouble with behaviour,
timekeeping, work ethic; and
– Apprentices lack hands on experience, good at book learning, but practical
experience is virtually non-existent.
• Further Education colleges
– Education must be designed to be jobs and work focused; and
– Not enough practical experience, any practical skills were general, not specific
enough.
• Higher Education institutions
– Lacking industrial experience; and
– Coming in with degree, but lacking in understanding of consultation and problem
solving.
RSM Survey- Upskilling
• Respondents were most aware of DEL’s ApprenticeshipsNI programme (83.9%)
and with 45.5% stating that they had used it.
• Companies were least aware of DEL’s Assured skills and Skills Solutions
programmes (36.8% and 43.6% being aware of them respectively).
• ApprenticeshipsNI was the most commonly used support (45.5% of respondents).
• Other programmes that have been used were the YES Scheme and Invest NI’s
BITP programme.
Respondents were asked what actions need to be
taken
• Majority of responses focused on:
– Increasing the quality of engineering training at HE and apprenticeship training sites
(with more practical training needed);
– Providing more financial support to make recruitment of apprentices more viable i.e.
fund the salaries for apprentices and not just training;
– Providing more incentives to businesses to run properly funded graduate schemes;
– Promoting career opportunities in advanced manufacturing and engineering to
children and young people at schools. Ensuring that careers teachers understand
what opportunities exist in manufacturing; and
– Promoting the STEM subjects among females and promoting work experience to
young people in schools and colleges.
Summary- Supply and Demand
• There are sufficient numbers of young people coming through the
education/training systems but there is a mismatch between the skills and
experience required by employers and what is being produced.
• The skills mismatch relates to insufficient numbers of people coming through
with professional, associate professional, skilled trades and managerial
skills.
Best Practice Supports
Getting STEM students to stay and work in the sector- is a problem in other
parts of the world. Actions being taken include:
• Increasing Awareness of the Sector in order to get more Science Technology
students staying in the Sector: STEPS to engineering – introduced in ROI- to
encourage primary school students to get interested in science and engineering.
It is part of the Engineers Ireland- Promoting the Profession.
• Pathway Models being used in the States to demonstrate to new recruits the
different routes they can take in engineering and advanced manufacturing and
where they can end up.
• Overall promotion of sector starting earlier in school life, involving parents
and bringing in more women
Regional Salary Information
• The basic median pay of those in clerical and technical roles is £19,677, (13%
below the average UK basic median pay);
• The basic median pay of those in manual roles is £17,901, (7% below the
average UK basic median pay).
• Considering management roles only, the basic median pay is totalled at £43,014,
with the total median pay at £49,560. There is no variance between these figures
and the UK average basic median pay.
Note: NI figures based on a small sample and need to be treated with caution
• Median pay is lower in NI than in ROI for most engineering occupations. Process
Engineers 66% lower.
• Significant variation in salaries between subsectors and between companies
• Universities now required to publish salary information on leavers.
RECOMMENDATIONS
Increase attractiveness of the Sector
Actions:
• The sector should work with primary schools to increase awareness and interest
in engineering as part of the STEM activities. Primary Schools could be provided
with kits/activities that teachers can use to excite children about engineering
design and production.
• Sector Skills Councils, FE and HE with employers need to tackle the image of
‘engineering’ held by many parents/guardians. They should include information on
the education pathways needed to pursue the different type of careers in
engineering and they should highlight the importance of gaining practical
experience as well as academic qualifications. Parents have questions on
apprenticeships that Careers teachers are not up to date on, and these should be
incorporated into the sessions.
Build Attractiveness of Sector to Parents and Young
People
• Primary School- kits/activities that teachers can use to excite children about
engineering design and production.
• Inform parents/guardians on careers.
• Promote engineering from the first year of second level school, rather than
waiting until students are aged 14 or over.
• Expand the UK Aerospace Youth Rocketry Challenge.
• More businesses to regularly invite and showcase their industry to primary,
secondary and grammar school pupils and their teachers (focus on changing the
sceptical perceptions of manufacturing).
Build Attractiveness of Sector to Parents and Young
People cont/d..
• Sentinus should consider expanding their short workplace engineering activities
e.g. Insight into Engineering and make it available to pupils in the summer before
they choose their GCSE subjects.
• Industry fact sheets already provide the facts on the whole life earnings. This
needs to be used more in sessions with parents and young people to allow
comparison with other professions..
• School Careers Teachers should have access through W5 (Provider of the
STEMNET contract) to the STEM ambassadors from advanced manufacturing/
engineering businesses that are available in their local area.
Actions needed to build skills of potential entrants to
the sector to meet needs of businesses
• Central information source should be set up to detail the different
education/career pathways that can be taken by students pursuing engineering
careers.
• Apprenticeship training needs to meet the requirements of business and this
should be actioned through the implementation of the recommendations which
will come out of the Ministerial Review of ApprenticeshipsNI.
• The Foundation Degree should be evaluated at the end of its first year to assess
whether it has addressed employers’ needs.
• Pilot
Actions needed to build skills of potential entrants to
the sector to meet needs of businesses cont/d..
• The business community and education providers (further and higher education)
should investigate the possibility of establishing a curriculum group (specifically
for advanced manufacturing and engineering) which would regularly meet to
ensure that courses and qualifications remain relevant to business needs.
• Consideration should be given to expediting the process which it takes to develop
and fund specific courses relevant to growing the manufacturing and engineering
sector.
Actions needed to ensure that sufficient skilled
resources are retained in NI to support the sector
• Invest NI to provide top up salary support to SMEs that are unable to afford to pay
market rates for engineers in key positions within the companies that have the
potential to contribute more to the economy. Key positions are those that require
specialist technical skills to help the company develop new products/new markets
and to increase their exporting levels.
• Northern Ireland companies should prepare for the potential risk of engineers
being attracted to positions outside of Northern Ireland and develop plans for
ensuring they have sufficient resources coming through from HE/FE to meet their
needs.
Actions needed to ensure that sufficient skilled
resources are retained in NI to support the sector
cont/d..
• Companies should consider setting up scholarships, bursaries and summer
placements to attract top talent from HE/FE to them.
• Universities should provide companies seeking to employ graduates, information
on the salaries being paid to graduates
• Companies should use the market salary information for graduates to inform their
pay strategies for these positions. It is important that companies seek to recruit
the best talent for the local economy.
Actions needed to Upskill the Sector
• DEL/Invest NI should increase awareness of their training supports to client
companies in the advanced manufacturing and engineering services sector,
highlighting the need to build capacity within both existing managers and those
likely to take up management positions in the future.
• Management succession programmes should be encouraged within those
companies with a cadre of junior managers. These programmes will require the
identification of employees with the talent and ambition to be future leaders within
the company. These employees should be provided with the development
needed to ensure they will have the required skills and competencies to manage
and lead the companies in the future.
Actions needed to Upskill the Sector
• DEL/Invest NI should work with businesses/training providers to ensure that the
management training provided is tailored to the advanced
manufacturing/engineering services sector.
• DEL/Invest NI should work with advanced manufacturing companies operating
with low profit margins to provide access to strategic support that will help them
identify value add opportunities which will allow the companies to grow profitably.
This could be actioned through the provision of international advanced
manufacturing/engineering mentors, working with local companies, to help them
develop strategically.
Actions needed to Upskill the Sector
• The approach taken to CNC machining should be reviewed within a year and if it
is has delivered on industry needs then it is an approach which should be taken
to dealing with the shortages in skilled welders/design engineers.
• The skills actions set out in the strategies for Aerospace, Agri-Food and
Sustainable Energy should be implemented. The delivery of these supports
should be business-led and employers should be incentivised to work with FE/HE
as required to deliver higher quality vocational learning.
• Larger employers should consider the opportunity to involve trainees from their
SME supply chains, in any training programmes they have established to provide
apprenticeships, thereby reducing the time/ cost to the SMEs.
Actions needed to retain skills within the Sector
• Invest NI should provide advice and guidance to companies on how to retain
talent through the development of relevant HR policies and procedures.
• SMEs need external support to identify the training needs within their companies.
Given that a high proportion of SMEs do not feel they need training, it is important
this assessment is carried out independently, but by specialists who understand
the sector.