Thursday, 23 October 2014
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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)

  • Engineer- point one, if you've never seen an engineer working as an engineer at £45k, then you've been working in the wrong companies or are not looking at Professional Engineers; all my graduates can aspire to this level of salary and still do Engineering.

    point two- the average age of Engineers is, I'm sure way below your figure. In the company I work in, for professional Engineers the figure is a little under 40. Of course, thanks to the imbecile Brown destroying our pensions (that's for working people, not the Public Sector), this will rise, but not enough to get close to your figure. Currently, the demographic problem is not enough experience, meaning that the average age is too low, stemming from the failed economy of the noughties. The outlook for good graduates is rosier than at any time during my thirty plus years in the business.

    In answer to another point made in this column , I would say that it's a very long time since I've seen a shortage of graduates, but it's not uncommon to see a shortage of employable graduates.

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  • The ones I met were in oil&gas. Others were contractors and people I keep in contact with abroad. A friend currently in Doha won't return to the UK until the salaries improve. I think it is one of many issues, but this one comes up again and again.

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  • Average age of UK engineers:
    http://www.theengineer.co.uk/opinion/viewpoint/bridging-the-gap/1009637.article

    Engineers on more than £45k are either working abroad, working in oil&gas, contractors or carrying out a management role. Not a complaint as engineers make very good managers and it is a good route to take for many. It is just interesting to see that engineers abroad get paid more.

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  • All this talk of 'low' and 'high' salaries... Dual-professional engineering training staff (on apprenticeship programmes) are on less than £30k despite carrying many years of industry experience, high level technical qualifications and full teaching qualifications. I know, 'cos I am one (with Qualified Teacher status and a PhD). Tell you what, though... I don't half love my job working with young apprentices with so much potential. That alone was worth the pay cut I took to teach.

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  • I blame the book keepers and nitpickers in management.
    Apprentices and graduates need mentors.
    Mentorship needs to come from senior engineers.
    Mentoring doesn't bring in money.
    Engineers who do not bring in all the money they could, are let go.
    Who's left in the company? Only the yes sayers, and those doing the book keepers bidding. Family men who need the money.

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  • Surely there cannot be a skills shortage merely an inability to identify and recruit experienced and knowledgeable staff.

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  • While companies want graduates to fill every post there will always be a skills shortage.
    Companies and their HR departments need to regain a sense of reality and take responsibility for their own shortfalls.
    Plenty of keen interested new staff out there who just need training.Staff trained on a particular software package will continue to be as rare as hens teeth.

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  • Dear Editor,
    I would politely suggest you need to get out more and see the actual salary levels in industry.

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  • Industry isn't known for disclosing salary levels to journalists!

  • As a young engineering student this is quite an interesting discussion to me. I have a question though.

    Why are engineers in other countries paid more?

    I've read quite a bit about this but never seem to find any answers. If we know what the problem is we can fix it.

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  • The issue across the board is inflexible and unrealistic recruitment procedures on the behalf of firms.

    I graduated during the early 90s recession and couldn't get a job within the field for love nor money 'no experience'. So I did other things to survive. I have no network within the field.

    I only finally got employment in engineering as an estimator within the control and automation sector in 2007.

    As you can imagine I remembered and still remember virtually nothing from my degree but I have a wealth of experience in others areas - areas in which the company did not employ me or pay me for but which were utilised by them handsomely.

    Meanwhile I was also learning the job, on the job: no training of any description was supplied, not even 'passport to safety'. I have no industry qualifications.

    On day one my 'training' consisted of being given a folder and being told 'Right, let's get you started, MCC job, quote it...you do know what an MCC is don't you!'...No, I didn't!

    I learned the job over a 2 year period and I learned it by going through old quotes, learning what bits went where etc, reading catalogues and gleaning information from wherever I could.

    Engineers within the company knew I was a 'ringer' and would rarely supply any information if asked. God forbid, when I first started I got the name of VSD wrong: who IS this idiot??

    It was not easy, not easy at all, the learning curve was huge. At the same time I was expected to design and create the company website, ratify all marketing materials and company documentation, create presentations for management etc. And of course, being so junior I was also on the lowest wage in the department by a long way.

    By the end I was quoting projects of over 2 million: this is in the context of a company that primarily built panels and had a turnover of 5 million, so as you can imagine, quotes were being done down to how many terminals were in a panel.

    And after all that? 2 years of hell literally. Redundancy.

    Now, 5 years later I am still not back in the industry and have, in fact, been unemployed for 5 years. I have tried and tried to get back into similar companies in a similar role. I have had interviews and second interviews and it always boils down to these things:

    1. Not experienced enough: only 2 years in the sector and no on-site project management experience.
    2. We don't want to pay you: even if we did take you on, even though you were earning X before (and struggling to live on it), we think you're only worth 2/3X
    3. We certainly won't pay to train you

    One particular job that I have been interviewed twice for, now over 2 years ago has been available for all that time, they have not recruited anyone. instead they put the job out to agency after agency, often several of them at a time...they just can't find anyone.

    I will be regularly approached by a new agency re said position and the situation is laughable: if I wasn't experienced for them two years ago ("OUR projects run to 30 million, you've only done tiddly little quotes" - "err yes but you just sub things like panels out??"), after 5 years out of work and gaining no more experience I won't be experienced enough for them now.

    The irony is that the person for them was there and available, they said they liked that person and were very enthusiastic for a start, until near the second interview they thought they might have to put some investment in that person. If they HAD invested in that person, that person would now have had 5 years experience in the role and 3 within their culture. Instead they still have no-one.

    And from the outside, trying to get back in, dealing with supposedly intelligent engineers, this is the mass stupidity and 'sheep-think' I experience regularly.

    Education establishments do not exist to provide carbon cutouts of people who fit your exact requirements, coming pre- made with years worth of industry experience.

    What they provide is people of a certain level of intelligence who have proved they are capable of learning.

    The situation companys themselves are manufacturing is that they only want the person who they have just lost. Unless the replacement person is working for a competitor in the same role (and if they are happy there, why would they leave? Hello???), that person does not exist.

    And then you whine CONSTANTLY about a skills shortage.

    Where on earth do you think the skills come from?

    Baaaaaaaaa

    Baaaaaaaaa

    Baaaaaaaaa

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