The demand is there – you just can’t get the staff these days

The need for skilled professional and managerial staff is increasing in the engineering sector. The difficulty is finding the right people to fill the jobs, particularly at middle-management level, leading manufacturers to look abroad to recruit

Growth in UK manufacturing output remains sluggish, but job prospects for both engineers and managers within the technology-led sectors are still reasonably bright, according to the latest Recruitment Confidence Index published yesterday.

Based on a survey of 790 senior managers in medium-to-large companies, conducted in June this year, the headline results show that recruitment activity is far from static within manufacturing. However, as one would expect, it still lags behind the growth expected within the services sector.

At the same time, a substantial majority of employers expect that finding the right engineers, IT and sales personnel at middle-management level will become increasingly difficult. A growing proportion of companies now expect to hire workers from abroad to fill the gaps.

The news will come as no surprise to engineering managers who have been involved in recruiting this year, and looks set to continue the pressure to boost pay and benefits to engineers.

Last week, the Engineering Council reported that the skills shortage had pushed up salaries for more practically-trained incorporated engineers at twice the rate of more `theoretically’ qualified chartered engineers. And in an Incomes Data Services survey published in July, more than one third of engineering companies said they had raised the level of pay for craft workers that they had difficulty recruiting or retaining.

`It is extremely difficult to recruit qualified technicians and engineers, and this is putting pressure on internal salaries,’ said one insider at an automotive component manufacturer. Other companies have opened regional offices, such as set-top box manufacturer Pace Micro Technology, who have admitted that encouraging development engineers to relocate north to Yorkshire was proving difficult.

But despite growing upward pressure on pay, employers polled for the RCI survey do not expect to see much increase in across-the-board pay rises. The survey indicated that 90% of organisations in manufacturing expected pay rises over the next six months to remain under 4%. Within the service sector, only 66% of those surveyed expected pay to hold below this level.

Tim Powell, senior consultant at recruitment consultant TMP Worldwide, said that benefits packages, rather than pay, were becoming the main battleground in `the war for talent’.

`Now, it’s all about pension schemes, relocation packages and paid-for MBA studies,’ he said. `Engineering companies are very hierarchical and pay structures can be rigid. So they need to play the benefits card.’

The most difficult groups to recruit over the next six months are expected to be technically qualified professional and managerial staff. The more senior the position, the more difficulty there is likely to be. In computing, engineering and IT, around two-thirds of companies planning to recruit this year expect problems.

This is the third RCI survey since the index was jointly established in December 1999 by the Cranfield School of Management, the Daily Telegraph and the recruitment advertisers TMP Worldwide. Since then there has been a slight upward movement of recruitment intentions, measured as the net balance of the percentage of respondents anticipating an increase in recruitment against the share of those who expect a decrease. The greater the net balance, the more positive the overall trend.

On this basis the index has edged up for all staff in all sectors from +21% in December 1999 to +29% by June 2000. Within the manufacturing sector, however, the index has moved during the same period from +13% to +17%, while in services it has increased from +33% to +38%.

Meanwhile, recruitment from outside the UK is expected to grow, though the manufacturing sector remains at the low end of the scale in terms of taking on staff both from within and outside the rest of the EU. According to the survey’s findings, only 13% of the manufacturing companies surveyed currently employed more than 5% non-UK citizens, compared to around 30% in financial services, business services, communications and transport.

* ‘Twas ever thus: archive, page 39