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The skills shortage paradox

With a skills gap apparently looming in engineering, why are engineering graduates are more likely to be unemployed and why are youth apprenticeships declining?

It’s the inevitable question raised every time there has been an announcement on the engineering “skills shortage” in the last few years. If the job market for young people is so difficult, why is engineering struggling to attract more much-needed new talent?

But the latest state-of-the-nation report from EngineeringUK highlights some even more intriguing – and worrying – paradoxes within this problem. Despite a major government drive, the number of young people taking advanced level engineering apprenticeships is falling and the overall number of apprentices is almost flat.

Upskilling existing employees is on the increase

There is an increasing trend to upskill existing employees, hence a rise in over-25 apprentices

Similarly the number of new engineering undergraduate students, despite a big rise in the last five years, has stagnated and even fallen more recently. And recent engineering graduates are actually slightly more likely to be unemployed than their peers.

These are difficult questions and though it’s easy to come up with potential answers – lack of engineering awareness, non-competitive salaries, an education system that forces students to narrow their options too early – there isn’t strong evidence that any one of these clearly illustrates what’s going on.

Certainly the difficulty young people seem to have in getting a job or apprenticeship points the finger at engineering companies, most of whom claim they find it hard to recruit experienced talent but could also be accused of not doing enough to train new engineers.

Paul Jackson

Paul Jackson, addressing MPs at the recent Big Bang at Parliament

The National Apprenticeship Service (which advertises 80 per cent of available placements on its website) says engineering and technology apprenticeships receive 14 applications for every place, suggesting the demand is there but the supply is not. Meanwhile, the number of over-25s taking apprenticeships is on the rise, which could mean companies are choosing to train up existing staff rather than take a risk on young people.

EngineeringUK’s chief executive, Paul Jackson, says the picture is more complicated than the data implies but offers some straightforward suggestions as to what might be happening.

‘If you were to advertise an admin position online you would get 100 applications in no time at all,’ he says. ‘So actually, 14 applications from something that’s not pre-qualified is not a good number. That system is not working.’ This certainly chimes with anecdotes from smaller, less well-known engineering firms that they struggle to get any applications while the well-known companies suck up all the talent. Jackson says this has even affected big international firms in less glamorous areas such as food manufacturing.

Part of the issue, he says, is that securing apprenticeships is a more difficult process than applying to university. ‘We do make it quite difficult for young people [to apply for apprenticeships]. If you’re on a graduate route you’ll get careers advice about which universities to apply for, support in your subjects, and then you have a nice system from UCAS where you put own five choices and they sort it out for you.’ By contrast, students must identify and apply for each apprenticeship separately and, anecdotal evidence suggests, they can often receive little guidance or encouragement in doing so.

So what about those who follow the university route? Why are 8.6 per cent of engineering graduates unemployed compared to 7.1 per cent overall if there’s such a skills shortage? Again, the issue isn’t as simple as it seems. Unemployment might be above average but so is full-time employment, meaning fewer engineering graduates are accepting part-time jobs or combining work with further study.

The explanation, Jackson says, may be that engineering grads are more likely to have a set idea about their career (hence their more vocational degree course) and therefore hold out longer for a particular job rather than applying for a wider range of roles.

”Young people make an application based on really very limited information each time, and hence we have got these shortages

Paul Jackson

‘If you’re willing to take a civil service job or accountancy – one of those jobs that you can take any degree and go into – we think if you’ve taken a history or classics degree, there’s that much broader group available to you. If you’ve taken a degree in mechanical engineering you probably want to get a mechanical engineering job. So we think some of the delay in employment is that people are looking for something really quite specific.’

Apprentices

Apprentices at Sheffield Forgemasters: the lucky few?

There’s also something of a mismatch within engineering, he adds. Electronic engineers, for example, are in particular short supply. ‘This is an imperfect market. Young people make an application based on really very limited information each time, and hence we have got these shortages.’

Jackson’s solution, as is so often mooted when it comes to the engineering skills issue, is a better careers support network, although not necessarily a return to the old-style advice service, that does more to put schools and students in touch with industry. He also says we need to ensure that recent additional government investment in higher and further education in STEM (science, technology, engineering and maths) education is wisely used to increase capacity. Applying industrial strategy to the whole of government and not just the business department could also help.

”There is an element of truth, at each stage of the recruitment of engineers, that the ideal is to recruit someone to slot in. The reality is we all know you’ve got to do some work

But what about the role of the engineering companies? Don’t they need to take more responsibility for training young people rather than expecting employees to arrive fully formed? ‘There is an element of truth, at each stage of the recruitment of engineers, that the ideal is to recruit someone to slot in. The reality is we all know you’ve got to do some work. So when I hear companies say they want someone who can instantly be 100% productive, I’m sceptical about that.’

On the other hand it can be financially difficult and risky for small firms in particular to take on apprentices. ‘Smaller companies can’t afford not to take part in training, but what it may be is that the whole apprenticeship is difficult to deliver,’ says Jackson. ‘Maybe they could contribute to overtraining of engineers without having every person on their premises for three years.’

EngineeringUK is calling for a doubling of the number of under-19 apprentices, graduates and GCSE physics students by the end of the decade. Jackson says he is cautiously optimistic about the targets. ‘The foundations have been laid. We’ve now got to accelerate.’


Readers' comments (32)

  • £70k is very reasonable pay. However many of those that are chartered engineers are also MDs of large corporations, or other non engineering roles etc. This does tend to skew the figure up much higher than what an engineer gets. In all my time in industry I have not seen a single engineer on more than £45k, unless they were a contractor or they were carrying out a non-engineering role.

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  • So £40k isn't a reasonable salary?

  • When you are nearing retirement and the engineers that have been "fortunate" to get to £40k will not consider that reasonable. Compare that to other sectors and abroad where graduates start on salaries higher than that, such as the US. It is uncompetitive, particularly considering this is a late career salary/package (engineer average age is very high). The calibre of people in engineering possess higher than average capabilities in mathematics and physics and these are typically attractive in other careers which pay significantly more. Unfortunately we lose a lot of engineers and potential engineers to other sectors and abroad.

    There are a number of studies showing that the UK suffers with engineering recruitment because of low salary. It is very painful to see accountants, IP lawyers and engineers abroad earning far more and increasing far more over the years. Many of my university friends have now left to go abroad and recently one of my colleagues is about to leave for east Asia. This was rampant at the previous company I worked at. I recently had a Christmas do with all my old friends from university. Every single one except two said salary was the main issue and they wanted to leave because of it. The one that didn't was working in oil&gas and he earnt a lot of money and the other was working in finance. Money doesn't bring happiness, but lack of it especially compared to other roles is breaking people in engineering.

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  • Dear Editor,

    by which standard are you defining the term "reasonable".

    Do you see this as a relative term compared to similarly qualified and experienced individuals in this country and abroad?

    Or is it some market based figure which states we get what we're worth? Which pretty much begs the question.

    Maybe when you refer to "reasonable" you talk about buying power compared to the average mean salary? Are we even talking about mean salaries? Are we even comparing like with like?

    Before you query any further whether other people's perceptions are worthy by your standard perhaps you could clarify what your standard is?

    Thanks kindly,

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  • The term 'reasonable' was introduced on this comments board. We're interested to hear your views.

    We'd also be very interested to see these studies that show salaries are a barrier to engineering recruitment. Do you have any links?

  • Some links to articles with some references to studies showing issues in the engineering sector.
    http://processengineering.theengineer.co.uk/uk-engineering-sector-facing-brain-drain/1015077.article
    http://www.nce.co.uk/news/business/students-shun-degrees-in-civil-engineering/8633266.article
    http://www.telegraph.co.uk/finance/newsbysector/industry/engineering/10474282/More-than-half-of-engineers-willing-to-leave-the-UK.html
    http://www.telegraph.co.uk/education/educationnews/9699524/Britain-being-hit-by-rise-in-graduate-brain-drain.html
    http://www.managers.org.uk/news/salary-lapses-causing-skills-shortages-engineering
    http://www.telegraph.co.uk/comment/letters/9719700/Engineers-need-higher-salaries-to-stop-them-leaving-the-profession-early.html

    I can look at digging more out that I have come across over the years.

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  • None of these studies show that engineering firms in the UK are struggling to recruit because of low salaries. Rather they show that lots of engineers and graduates in general claim they would consider leaving the country, often for more money.

    They don't show students are shunning engineering because it is a 'low-paid' job or that the third of engineering graduates who don't take a job in the profession do so because of pay. They don't even indicate the number of engineers who do leave the UK because they can secure higher salaries elsewhere (although undoubtedly some do).

    Salaries are clearly a factor in job decisions, and the industry needs to take a much more serious look at how it can use pay to counter the skills shortage - the issue is rarely addressed in the various industry reports we see eg Perkins. But we need more than stories about friends who've gone abroad to work out how much of an issue it really is.

    It's interesting to note that in the articles you link to, one of the few mentions of salaries actually says: '“Employers offer lucrative employment deals and pay packages to secure the best talent. If this information is not being channelled to our young people at an early stage, then we need to be looking at more innovative ways of getting this message across.'

    http://www.telegraph.co.uk/education/educationnews/9699524/Britain-being-hit-by-rise-in-graduate-brain-drain.html

    This person clearly thinks low pay is not the real issue: rather it's the image of engineering as a 'low-paid' job.

  • These comments about the level of salary are quite horrifying. In Australia, labourers on a mine are on $200k pa. This equates to about GBP 150k. Engineers are generally paid on the level of about $140k plus. Although, a downturn in resources has made things somewhat more challenging.

    Engineering professionals in the UK should be earning considerably more than GBP 40k pa. A shortage of engineers and technologists will push salaries up. Plus there is a need for engineers to be more business-like in their work - to be aware of business issues such as finance and law etc.

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  • Can we also add into the mix the catastrophic reduction in the quality of UK qualifications. A current MEng qualification is nowhere near the level of a BSc of twenty years ago, A levels are broadly similar to O levels and GSCEs are not even worth considering. In a recent test on graduates, two very basic first year Engineering questions were asked, and four out of fifteen got both right. Partly this is of course a result of the modular system where subject matter is only learned briefly for an assessment, and is then neither built on nor required further, so is forgotten. This applies from GCSE through to degree, and merely compounds the problem of reduced content with a reduced requirement for retention.

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  • Engineering pays reasonable to good salaries. You can find some better elsewhere and some better abroad, but not everyone will. Also, Engineers who deserve respect get respect.

    A large part of ur problem is wingeing idiots who seem to expect unattainable salaries and accolades, seem to be underserving of either, and in the main, have doubtful rights to call themselves Engineers.

    If members of the profession keep talking it down, Engineering cannot have the status it deserves.

    The message from me- grow up, and do something positive, even if it's just leaving a profession that can well do without you.

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  • Editor- I definitely agree. It has an image problem. Drawng comparisons with abroad then there is a clear gap in salaries.

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  • As the average age for an engineer is ever increasing and currently it is around/above 60 years old then there could be a big shift in future as a real shortage could occur.

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  • This article addresses the issues at graduate level. http://www.iom3.org/feature/closing-skills-gap-materials-graduates-shortage?c=3343
    From my own experience in industry they a very common complaint from most people in a whole range of companies.

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  • How many people have you met in any sector that thought they were paid what they deserved? And surely the issue is what do those people who choose not to go into engineering think, not what those already in it think.

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