Engineering talent: bracing for the gathering storm

Paul Lambert, Hay Group

Hay Group’s Paul Lambert suggests five steps that will help business find a way through the skills crisis as indusry goes digital and an aging workforce looks to retire.

The shortage of STEM and specialist skills in the UK was once again making headlines this month, with reports from the UKCES and CBI highlighting the potential impact.  Lack of engineering skills was highlighted as a particular cause for concern, with repercussions likely to extend far beyond this industry in isolation. You need only look at the spiralling scale of investment in infrastructure and manufacturing, or the financial contribution the engineering sector makes to the broader economy, to get a sense of the scale of the problem. 

"A significant proportion of today’s engineers are due to retire in the next ten years, taking with them skills finessed over time, but also vital years of experience."

While these reports are valuable in highlighting certain issues, such as the difficulty in filling engineering-related vacancies and the need to improve training and apprenticeship schemes, there are other factors, just beneath the surface, that are making the situation worse.

Firstly, there’s the challenge of sourcing a new and broader mix of skills relating to engineering professionals. An obvious example is the rapid digitalisation of the industry that has dramatically changed the skill requirements of engineers, increasing the need for different, innovative technical capabilities.

Secondly, existing engineering talent is in short supply. Within the UK, there’s fierce competition for talent in the market, with the aging of the engineering workforce a particular cause for concern. A significant proportion of today’s engineers are due to retire in the next ten years, taking with them skills finessed over time, but also vital years of experience.

Reassuringly, engineering leaders are recognising the challenges presented by the skills shortage. Hay Group’s recent report, The Gathering Storm, outlines findings from a survey of 100 UK leaders across the industry, revealing that 47 per cent expect staff numbers to increase over the next five years, while 61 per cent describe attracting and retaining mission-critical engineering capabilities a key challenge. While each organisation will approach the problem from a unique perspective, there are a number of steps they can take to inform their strategy.

1.  Take a long view

Engineering leaders must look to the future direction of their industry to intelligently plan and forecast their workforce capability and capacity requirements. It is only through a strategic assessment and analysis of future workforce requirements that they can really understand the number of employees they will need, where they should be stationed and the skills they will require.  

2.  Increase diversity

With pressure on every stage of the talent pipeline, organisations will need to ensure that they identify critical roles and draw from as large a talent pool as possible to fill them. As part of this, they should consider their employee proposition; what they offer their prospective employees and how this ensures they attract the key engineers for delivery. 

3.  Defuse the demographic time bomb

Older employees often have a huge amount of technical knowledge, but organisations risk losing this when they reach retirement. To avoid this, firms should think about modelling retirement risk and finding new and different ways of working with older talent. These might include mentoring schemes, or putting formal alumni programmes in place. 

4.  Build leadership capability

Engineering organisations need to develop a new breed of leaders, able to meet the challenges posed by the evolving industry. To achieve this, they must instigate a robust process to identify the competencies these individuals should have. Once established, they need to assess their current management against this, pinpoint areas where skills are missing and work towards developing these.

5.  Get the build-or-buy balance right

Engineering firms need to make an assessment of which skills they can recruit, and which are most efficient and financially prudent to develop internally. To bring clarity to this issue, organisations should consider creating clear career paths that will guide and encourage progression, alongside talent identification and development programmes.

While engineering organisations are right to be concerned by the findings of the UKCES and CBI reports, they need to grasp the opportunity they present. By taking the above steps; tackling the skills shortage early and head-on, firms will be placing themselves in a solid position to tackle the gathering storm the industry faces.

Paul Lambert is Associate Director at Hay Group and author of The Gathering Storm report