The engineering skills crisis: What can be done?

One of the current issues that is afflicting the construction sector, and particularly that of engineering, is the skills shortage, with forecasts stating that a lack of talent coming into the industry could result in costs of millions of pounds.

Claire Tate is one of the Directors of Tate Consulting, an industry leading building services engineering company that provides a wide range of engineering and management consultancy services. Here Claire speaks with us about the effects of the recent skills crisis upon engineering, shining a light on some potential solutions.

The engineering skills crisis

In November 2017, the UK government announced that 2018 would be the ‘Year of Engineering’, as part of a wider initiative to address the UK Engineering skills crisis.

Engineers generate 23% of the UK’s total turnover (£1.2Tn), but the title of ‘Engineer’ does not enjoy a protected status in the UK. Perhaps, in trying to attract younger people to the profession, we should really enhance the status of the role, like Doctor?

The Institution of Mechanical Engineers made the same point in 2017, but maybe it is time we really listened.

Engineering UK, in conjunction with circa 35 other Professional Engineering Institutes produced, ‘The State of Engineering’ report 2018. Among other things it highlights that there is a graduate level shortfall of approximately 22,000 per annum and, when looking at requirements from level 3 qualifications upwards, a predicted overall shortfall of 80-110,000 within the Engineering and Technology sector.

This falls in line with what Engineering service businesses already know, that recruitment is extremely difficult, and with Brexit uncertainty looming there is very little job turnover in the mid-level positions. Some 32% of staff surveyed in the CIBSE 2018 salary survey said that job security was the most important consideration in a job move, with this being echoed in CIBSE 2019 survey.

Challenges in the recruitment process

Through June to August 2018, job vacancies in the sector were at their highest since 2001, at 833,000, and this scarcity of candidates is having a positive knock-on-effect of increasing salaries.

Building Services Engineers have outperformed colleagues in the construction and property sectors, receiving 2.7% wage increases, and are outperforming all other professions at an average 1.8% while salaries continued to rise in 2019. Yet, 40% of Building Services professionals stated that they were unhappy with their salary and that it could precipitate a job move.

Employers, like ourselves, are left paying ‘above market’ rates for more suitable candidates. Some 39% of employers that were surveyed agreed with our personal view, that unrealistic salary expectations were one of the biggest challenges we face in recruitment. This is not sustainable. Engineering resource has to be billed out to clients, and these rates have to be competitive.

Engineering SMEs, like ourselves, are having to rethink and adapt to recruitment challenges by looking at how we attract candidates with the appropriate skills and experience we need, and then retain them.

Wider consequences of the skills shortage

We value environmental sustainability, as we in this industry should, however business sustainability is equally important. If we want to be resilient to market forces and demonstrate to our clients that we can deliver on their projects, yet ensure job security for our own employees, we have to be sustainable in business too.

The ongoing sector skill shortages impacts productivity, creating issues for business expansion. It also prevents us providing the flexible employment strategies employees would like to see their employers offer.

The CIBSE survey states that employees have cited a work-life balance as the next most important factor behind salary, when considering their job. People matter, and people in service led businesses are key assets.

What can be done to tackle the skills shortage?

Which is why, in our new five-year plan, Tate Consulting is shifting our focus to become more ‘people centric’ in our approach. Hoping that we can address some of the sector skill shortages with a different approach, we are looking at offering a four-day working week and are considering the values and requirements of the different age groups within our workforce. Can workplace flexibility assist the salary challenges, and thereby make us a more attractive alternative in the market place? This may well just be old fashioned values ‘re-badged’. But, when we considered the conundrum, the concept resonated.

Through this approach, all people in the organisation understand the ‘why’ of your business, leaders set fewer priorities and share them, you appreciate good managers, you know who key people are, and people centric leaders invest in the recruitment process. This is because employing people with the right attitude is probably the single best ‘gift’ you can give to your business.

We have highly qualified and experienced Engineers delivering on large national Industrial and Residential PRS/BTR projects, but we want to continue to grow our business and would also like to provide greater flexible working opportunities for our people, in line with modern family living and employee expectations. It is only with a different approach that we are going resolve our skills shortage.

Gender representation in engineering

A huge 47% of the UK workforce are women, but only 12% are represented in our sector. BME workers fair a little better, at 12% of UK workers and eight per cent representation in this sector. Girls are underrepresented in STEM subjects at school but outperform boys in exams in those subjects, at both GCSE and A-Level. However, women comprise only 16% of first degree attendees in engineering and technology subjects.

Somewhere along the line we need to attract our women into engineering subjects, through parents, teachers, HE centres, industry ambassadors, and government policy.

As Millennials rise to senior roles, attitudes in the workplace are changing. Deloitte’s Global Millennial Survey 2019 explains that the mistrust of business by Millennials and Generation Z is greater than ever, stating that: “younger generations are putting their money where their mouths are when it comes to supporting businesses that make a positive impact on society”.

We are still on our journey, and the rest of the sector has its future challenges. It is difficult to say if Brexit will burst the engineer scarcity bubble and salary challenges but one thing is true: new solutions are required to attract people to engineering, the skill that shapes our future.

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