Will the UK’s Engineering Skills Shortages Hinder Projects?

The engineering sector in the UK is in a state of disruption. There are a wealth of emerging opportunities that present exciting opportunities for firms. At the end of July, Prime Minister Rishi Sunak announced that £20 billion would be invested in the early deployment of carbon capture, utilization and storage (CCUS) for a project in Scotland.

Vulcan Engineering has revealed plans to expand in Rotherham that would create a number of new jobs. Across the infrastructure sector, projects including the East West Rail development continue to make progress, providing greater opportunities for engineers — these are just a handful of the latest infrastructure projects across the UK.

However, while there may be lucrative opportunities for engineering businesses, the prevalence of skills shortages remains a concern. Estimates from STEM Learning suggest that there is a shortfall of 173,000 workers in science, technology, engineering and maths (STEM) in the UK. According to the IET, this means that almost half (49%) of engineering businesses are struggling to recruit the skills they need.

APSCo’s report on engineering hiring also highlights the impact of skills shortages on the sector. The data — provided by the world’s largest network of job boards, Broadbean Technology — reveals that the number of people applying for jobs in the sector fell 36% month on month in July, marking the largest drop seen in the past two years. As candidate numbers fall, demand remains high, with the number of jobs reported for 2023 so far this year up 5% on January to July 2022 figures.

The reasons behind this talent shortfall are plentiful. Limited emerging talent pools have long exacerbated the issue. In fact, data from the OECD has previously indicated that less than 10% of UK graduates are engineers — a figure that is far too low to meet current demand, let alone close the skills gap that continues to grow. While there is a focus from the government to improve STEM skills at education level, the impact of any action will take years.

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More immediate solutions are needed as an interim option if the aforementioned projects are to remain on track. That includes boosting access to contract professionals to fill resourcing gaps. Unfortunately, the likes of Brexit and Off Payroll have had a negative impact on the UK businesses’ ability to attract and engage with temporary resources on a nationwide and global scale.

Off Payroll has had a lasting impact on not only the number of people choosing to work as a contractor but also the number of employers comfortable with engaging these professionals compliantly. While we don’t expect to see any significant changes to Off Payroll regulation outside of the ongoing set off consultation, APSCo will continue to ensure the voice of recruiters is heard on the subject. The regulation hasn’t been conducive to creating a strong flexible labor market which, given the dearth of talent, is of critical importance.

What we believe can be implemented on a more immediate basis, though, are changes to immigration policies. At the moment, the UK is lagging behind its European counterparts when it comes to immigration options for the self-employed and independent contractors.

Our public policy team continues to work closely with policy decision makers to identify where flexible visa options similar to those in place across Germany, Norway, Denmark, the Netherlands and Australia can help fill skills gaps in the country.

Accessible, simple-to-obtain visas for independent, non-employed contractors need to be readily available, almost mirroring the flexible visa options of Germany — which is arguably one of the world leaders on this issue.

We also believe that “permitted business” needs to fall within the scope of the Standard Visitor visa. This could be a flexible, non-sponsored, short-term visa route for highly skilled foreign employed and self-employed workers. The fast-track visa application that the Home Office utilized last year should also be expanded and allow for the leasing of visa holders from registered sponsors to hirers.

If the recently announced engineering projects are to come to fruition, skills first need to be found, and the UK simply doesn’t have enough people to fill the demand. But it could — if new skills routes are developed.

Ann Swain

Ann Swain
Ann Swain is global CEO of APSCo.

Ann Swain

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