When it comes to quantifying an industry’s health, the concept of ‘skills’ is a notoriously slippery fish to measure. But whichever way we look at it, the UK’s car industry is facing a threat of existential proportions. As if this situation wasn’t problematic enough, we also have the ‘Three Horsemen of the Apocalypse’ of technology transition, tough economic times and Trump’s tariffs to deal with.
Granted, the US tariff of 10% for the first 100,000 vehicles imported is not as bad as it might have been, but the financial pressures on OEMs remain much higher than they were a year ago. Starmer may try to present this – and the more recent renegotiation with Brussels – as ‘landmark’ deals, but the reality is these negotiations have simply adverted potential disaster in the first instance and eased the burden of export red tape in the second.
How bad are things?
One way to assess the relative competency of a sector is to look at its vacancy levels. On this score, the automotive manufacturing industry ranks in the Premier League of engineers missing in action, at 43% above the all-industry average. Another metric involves a count of actual unfilled jobs at any point in time. Currently there are an estimated 23,000 job vacancies for skilled workers in the motor trade[1]. On top of that, an ageing workforce means that around 19% of automotive manufacturing workers are over 55 and approaching retirement. Additionally, outside perceptions of the male-dominated sector (86% male) may be further limiting the recruitment pool.[2]
On the global stage
Effectively competing with the international automotive market is critical to UK industry. Eight in ten cars manufactured are exported, primarily to the European Union, the United States of America and China. At the same time, total output has collapsed since 2018, shrinking from 1.7 million units down to 0.78 million, with Brexit and the pandemic playing a pivotal role in the decline.[3] Despite this, the industry remains a cornerstone of the UK economy, generating £46.8 billion in Gross Value Added (GVA) and is the largest exporter of goods, by value.[4],[5] It is, however, an industry at a crossroads, facing the challenge of electrification with a rapidly growing requirement for niche skills.
Do we need skills?
According to The Society of Motor Manufacturers and Traders (SMMT), approximately 65% of the 169,000 automotive manufacturing workforce are employed in engineering or production roles. It also estimates that there is a 7% production labour shortage in the supply chain. Looking at the broader industry, including the aftermarket, it reports that 80% of the roles involving powertrain competencies (internal combustion engine powertrains) will be impacted, requiring significant reskilling.[6]
As the industry transitions towards battery electric vehicles (BEVs), there is also growing demand for relevant specialists. This includes academic experts with knowledge in battery technology, electric and hybrid powertrain engineers, electrical engineers and control engineers. Simultaneously, there is also a need to enhance the software and data capabilities of the automotive industry. This means software engineers, mechatronic engineers, ADAS engineers, CAD engineers and cyber security specialists. In total, across all areas of the automotive industry, an estimated 858,000 jobs will be required by 2032.2
The race for talent
For manufacturers, OEMs and suppliers looking to achieve their ambitious financial targets, finding the right talent quickly can make all the difference. Increasingly, we are seeing major automotive brands – better known for their technological leadership – placing just as much emphasis on talent acquisition, which they now consider a ‘mission critical’ to current and future programmes.
In our thirty plus years of experience recruiting contract skilled candidates, from technicians through to engineers and quality managers, we have seen a strategic shift away from traditional employment terms to a much more flexible approach which fits in with the ebbs and flows of vehicle development, production ramp up, launch and post launch.
While this could be seen as a distress signal within the industry, it certainly helps OEMs to reduce employment costs (only using highly skilled people when needed) while offering engineers attractive rewards and the opportunity to enrich their skills via a broad range of production and quality management experience.
Ready for the future
The UK automotive industry is reaching the crux of the electrification transition, facing simultaneous technological and economic pressures. If it can successfully pivot, domestic and international opportunities will ensure long-term growth. Success during this period will rely on attracting and fostering talent, while at the same time increasing focus on talent retention activities, to ensure that manufacturers, OEMs and suppliers across the automotive industry can successfully achieve their revenue targets.
While degree-educated engineers are not affected by the UK government’s recent rising of the bar for overseas workers, changes to English language tests and time needed to apply for settled status may dampen, not encourage much needed talent from other countries.
Addressing the current skills shortage is a priority that encompasses industry, government and education. Without a strong pipeline of talent, the UK automotive industry will fall behind. For those seeking a rapid solution to the skills gap, working alongside a knowledgeable recruitment and talent solution provider can be the difference. Investing in the right skills now will drive innovation and a competitive edge, nationally and internationally, now and into the future.
Alex Onoufriou is managing director of G&P Talent
Apprenticeship Funding Cuts to Cost Employers £214m
I had no idea the taxpayer was funding such an advanced level of education. Certainly graduates and post-graduates don´t receive comparable financial...