Manufacturers must invest more in people and technology says RSM

By Anita Jaynes on 18 May, 2018

RSM is warning that the war for talent is hotting up among the region’s manufacturers after new figures reveal that the South West has the highest employment rate of any UK region.

According to the latest ONS data, employment rates in the South West reached 79.3 per cent in the first quarter of the year, up by 0.6 per cent versus the same period last year, and the highest in any UK region.

Tom Morgan, head of RSM’s manufacturing team in the South West said: “One of the biggest risks facing the region’s manufacturing companies is around access to skilled labour. With the highest employment rates of any UK region, manufacturing firms are already finding it hard to recruit the right talent and this problem could be exacerbated by any future curbs on European citizens’ rights to work in the UK.

“Manufacturing companies must now plan ahead to ensure a future pipeline of talent. In simple terms, we need to encourage greater numbers of bright people into entry level positions. Manufacturers need to do more to engage with local schools and persuade students to consider manufacturing as a rewarding career path.

“The government is doing its part by pressing ahead with its plans for T-levels due to be available from 2020. This is a very important development which will hopefully help change attitudes towards working in industry.

“The sector also needs to work harder to recruit more women. Women have been under-represented in the manufacturing sector for too long. Businesses benefit from having as wide a talent pool as possible. By embracing a diverse workforce, businesses are better placed to meet the diverse needs of their customers.

“Clearly the potential impact of Brexit is top of mind for the region’s manufacturers at present. While the devaluation of the pound in the aftermath of the referendum has provided a boost to the sector, the current uncertainty surrounding the UK’s future trading relationships is proving unhelpful. However, manufacturers are remaining optimistic.

“Many companies are sensibly trying to do some contingency planning around different trading arrangements. Currently there are 140,000 companies in the UK which export to the EU but have no experience of trading outside of Europe. Many may need to broaden their horizons.

“Finally, manufacturers need to tackle the productivity gap. Productivity in the UK has been flat for almost a decade and there is now an urgent need for investment. New digital technologies like big data, cloud computing, the internet of things and artificial intelligence all have the potential to transform UK manufacturing. However, many operators are watching and waiting. Once they have a clearer vision of the post-Brexit landscape, we may well see the investment taps being turned on.”

Employment rates by region (source: ONS)

  Jan 2018 to Mar 2018 Jan 2017 to Mar 2017
North East 73.6 71.6
North West 73.6 74.0
Yorkshire and The Humber 74.2 73.9
East Midlands 75.7 75.6
West Midlands 73.7 71.4
East 78.3 77.5
London 75.2 73.3
South East 78.7 78.4
South West 79.3 78.7
Wales 73.4 73.7
Scotland 74.7 74.0
Northern Ireland 69.7 68.4
UK 75.6 74.8

Pictured above: Tom Morgan, head of RSM’s manufacturing team in the South West