SRRU PROGRESS REPORT - Serio Travel-To-Work Sectoral... · represented in the Puttick Grid. Project management, research and development, product or service design and craft production

Plymouth Travel-To-Work Area Sectoral Workforce

Development Programme

Medium- to Long-Term Skills Needs Key Sector: Advanced Engineering

Julian Beer Paul Ingram Lyn Bryant

Amanda Knight

Social Research & Regeneration Unit

April 2002

SRRU, Faculty of Human Sciences University of Plymouth, Drake Circus, Plymouth, Devon PL4 8AA

tel: +44 (0) 1752 232747 fax: +44 (0) 1752 233194

email: [email protected] website: www.plymouth.ac.uk/businessservices

Supported by the EUROPEAN COMMUNITY

Plymouth Travel-To-Work Area Sectoral Workforce Development Programme Medium- to Long-Term Skills Needs : Key Sector: Advanced Engineering

Plymouth Travel-To-Work Area Sectoral Workforce

Development Programme


April 2002

Commissioned by: Plymouth Learning & Work Partnership

Researched by: Julian Beer, Paul Ingram, Lyn Bryant & Amanda Knight Social Research & Regeneration Unit University of Plymouth

Social Research & Regeneration Unit


Executive Summary

The advanced engineering sector is made up of mostly high value-added enterprises operating across the following engineering sub sectors: mechanical engineering, precision engineering, electronics and communications engineering, basic metals, factory automation, manufacturing, aerospace, motor vehicles and elements of both ship and boat building. A common requirement for these enterprises is their need to be able to acquire and retain high calibre engineering and related management skills if they are to successfully compete in an increasingly globalised market-place.

The national trends within the sector highlighted in this report are largely reflected within the sub-region and PTTWA. Many of these trends have also been highlighted by the employers and in the interviews conducted with a range of industry educators, trainers and representatives.

In the sub-region, during the period 1998-2009, the following net demand has been projected:

science and engineering professionals: 6,300.

science and engineering associate professionals: 200.

skilled engineering trades: 10,600.

In undertaking the sector analysis, a detailed account of the sector has been provided including sector trends, occupational trends, trends in education, qualifications and training, skill requirements, skills gaps and shortages. The examination of the trends has provided a valuable insight into the changing skills needs within the sector. This in turn has facilitated the identification of the skills that employees within the PTTWA and the sub-regional economy in which it operates, will require now and in the future in order to compete successfully in the market place.

The examination of general trends, occupational shifts, education, qualifications and training within the sector, has identified short to medium term skills needs for the sub-region and PTTWA. In the short term there are skills shortages, skills gaps and other recruitment difficulties to be addressed in order to ensure support for local businesses and to prevent short term issues from impacting on the long term future of the sector.

Most occupations within the sector require long training periods, complemented by experience, and these issues are detailed in this report. The promotion of Modern Apprenticeships and Graduate Apprenticeships is seen as being a means of widening the basis of recruitment as well as providing appropriate training for specific industry needs.

However, while detailed knowledge of current circumstances and short term trends are essential to underpin longer term forecasting, the main focus of this report is upon the medium and longer term skills needs of the sector.

Social Research & Regeneration Unit : i


There is also an acknowledgement that the traditional skills, for example, engineering skills at the craft level, that have traditionally underpinned the engineering sector are crucial to the long-term health of the sector.

Nevertheless, new organisational patterns have already emerged or are emerging, which demand increased flexibility, multi skilling and increased efficiency with a shift in production to more value added products and processes, all of which impact on future skills needs.

Globally, manufacturing cost competitiveness is affecting the manufacturing sector, where the emphasis on efficiency is resulting in ‘cost down’ lean manufacturing and the need to reduce lead-times in what could be described as lean and agile manufacturing. Within these trends a range of situations faces organisations of different sizes, in different positions in the supply chain and in different sub-sectors.

These trends are being met by equally different strategies in response to market developments. Some businesses are focusing on core activities, moving up to the quality end of the volume market, or occupying lower volume, higher margin market niches. Each of these strategies has an impact on skills and workforce development needs and approaches within the sector.

In order to aid understanding of the complex relationship between product market strategy, performance and skills in more depth, a model has been developed that allows product market position to be defined and the skills related to that position to be identified. The Puttick Grid uses product/service complexity and the degree of market demand to categorise product market position.

The output of enterprises can be classified as falling into one of four production and/or service types:

Super value goods and services.

Fashion/fast response.

Commodity products and services.

Consumer durables.

Evidence from the sector indicates that nationally and at the regional and sub-level the trend is towards super value goods, fashion/fast response, and consumer durables. That is not to say that there are not any firms operating in the area of commodity products, but these businesses are finding the global marketplace to be very competitive.

At the other extreme as far as super value goods and services are concerned, it was commented that manufacturing industry may follow the trends in Japan in relation to the location of manufacturing plants. Japanese firms tend to base their research and development sectors within Japan, while placing the physical location of production in other countries.

Social Research & Regeneration Unit : ii


The UK may in the future see this type of shift. If this type of shift does occur, the skills required will be very different from those where firms are operating in other areas represented in the Puttick Grid. Project management, research and development, product or service design and craft production or delivery skills will be needed, if the shift takes place.

In terms of training the pattern of training incidence in the sub-region was slightly skewed towards the production end of the business. However, for future skills needs within the sector and its sub-sectors, there will need to be a redressing of the balance in order for businesses to compete in lean manufacturing. Implementing ‘cost down’ lean manufacturing activities has a direct impact on the skills required at a supervisor and team leader level, as well as on the production side.

The 1999 Employers Skills Survey provided some evidence about the skills required by firms seeking to implement new, higher quality product areas or to improve the quality of their existing operations. In the survey just over 25% of engineering employers reported plans to move to higher quality product areas.

The ESS Survey highlighted the importance of communication, customer handling, and team working skills as the most important for establishments attempting to improve either value-added or production efficiency. The key skill areas across sectors related to:

Technical knowledge that went beyond traditional functional boundaries.

Technical knowledge combined with general management skills, for example, team leading.

Ability to manage sometimes complex strategic relationships and alliances.

Managing customer relations.

Knowledge of product markets to enable new opportunities to be identified.

The currency of the future in terms of skills for the sector points towards flexibility, multi-skilling and problem solving, all underpinned with a high level of technical understanding, generic and personal skills.

Social Research & Regeneration Unit : iii


Contents Page page 1. Introduction .. .. .. .. .. .. .. .. .. .. .. .. .. .. 1

1.1 The Pymouth Travel-To-Work Area (PTTWA) .. .. .. .. .. 2

1.2 Methods .. .. .. .. .. .. .. .. .. .. .. .. .. .. 3

1.3 The Structure of the Report .. .. .. .. .. .. .. .. .. .. 3

1.3.1 Section One .. .. .. .. .. .. .. .. .. .. .. 3

1.3.2 Section Two .. .. .. .. .. .. .. .. .. .. .. 3

2. Section One .. .. .. .. .. .. .. .. .. .. .. .. .. .. 5

2.1 Section Definition: Advanced Engineering .. .. .. .. .. .. .. 5

2.2 Regional Sector Profile and Forecasts .. .. .. .. .. .. .. .. 6

2.3 Sub-Regional and Plymouth Travel-To-Work Area Profiles and Forecasts .. .. .. .. .. .. .. .. .. .. .. .. .. ..

10

2.3.1 Sub-Regional Sector Trends .. .. .. .. .. .. .. 11

2.3.2 Sub-Regional Sectoral Employment .. .. .. .. .. .. 13

2.3.3 Sub-Regional Employment Levels .. .. .. .. .. .. 13

2.3.4 Sub-Regional Employment Level by Gender .. .. .. .. 14

2.3.5 Sub-Regional Occupational Structure .. .. .. .. .. 14

2.3.6 Sub-Regional Employment Levels by Occupation .. .. 15

2.3.7 Sub-Regional Sector Replacement Demand .. .. .. .. 18

2.4 Sub-Regional Qualifications and Training .. .. .. .. .. .. .. 18

2.4.1 Sub-Regional Sector Skills Profile .. .. .. .. .. .. 24

2.4.2 The Experiences of Local Companies .. .. .. .. .. 30

2.5 Plymouth TTWA Sector Workforce Development Issues .. .. .. 32

2.6 Workforce Indicators and Performance Measures .. .. .. .. .. 41

3. Section Two .. .. .. .. .. .. .. .. .. .. .. .. .. .. 46

3.1 Sector Trends: Advanced Engineering - The National Context .. .. 46

3.2 Sector Occupational Trends .. .. .. .. .. .. .. .. .. .. 48

Social Research & Regeneration Unit : 1.


page

3.3 Sector Replacement Demand .. .. .. .. .. .. .. .. .. .. 50

3.4 Sector Trends: Qualifications and Training .. .. .. .. .. .. 51

3.4.1 Education and Qualifications .. .. .. .. .. .. .. 51

3.4.2 Appropriate Standards Qualifications and Training Programmes .. .. .. .. .. .. .. .. .. .. ..

53

3.4.3 Developing the Adult Workforce .. .. .. .. .. .. 54

3.5 Sector Trends in Skill Requirements .. .. .. .. .. .. .. .. 54

3.6 Sector Skills Gaps and Shortages .. .. .. .. .. .. .. .. 56

4. Sources and References .. .. .. .. .. .. .. .. .. .. .. 62

~ ~ ~ o O o ~ ~ ~

Acknowledgements .. .. .. .. .. .. .. .. .. .. .. .. 65



Plymouth Travel-To-Work Area Sectoral Workforce Development Programme


1. Introduction

The newly created Learning and Skills Council has, as part of its remit, to carry out the annual skill assessment exercise from 2002 onwards. The Council acts as the umbrella organisation for the local Learning and Skills Councils. Both the National and the Local Councils have been tasked to carry out the following activities at their respective levels1:

To raise participation and achievement by young people.

To increase demand for learning by adults, and to equalise opportunities through better access to learning.

To engage employers in improving skills for employability and national competitiveness.

To raise the quality of education and training delivery.

At the grass roots level there is a series of local learning partnerships, usually based on particular travel-to-work areas, designed to better inform the Local Skills Councils about highly localised circumstances. For Plymouth, the Plymouth Learning Partnership has been set up to perform this role. It has set itself the following ‘key objectives’ 2:

Create and continuously improve an integrated strategic Workforce Development system in the Plymouth Travel-to-Work Area (TTWA).

Raise the overall level of skills and qualifications achieved locally, including job-related skills and entrepreneurship skills, and ensure that they meet career and industry standards.

Provide education, training and other services necessary to assist individuals in moving into and along the wage and skill continuum in their employment and re-employment.

Provide 'cradle-to-grave' support for those capable of, and wishing to establish new, knowledge-based firms in the sub-region.

Provide high quality, integrated skills training support for sub-regional SMEs and micro firms.



Ensure inclusive and equitable access to training and employment opportunities, recognising differences in economic growth and employment patterns among geographic areas and population groups.

Encourage and support proactive employer-based training initiatives, particularly among the area's larger employers.

In setting out to achieve these objectives, the Plymouth Learning Partnership has commissioned a series of sector based studies to provide a more detailed understanding of each of the priority sectors in the Plymouth TTWA economy. And crucially, to identify the skills that employees of sector based firms will require in order to ensure that they are able to compete successfully on a global basis. This is the first report in the series and covers the Advanced Engineering sector. The other reports in the series cover the other thirteen sectors as follows:

Creative Industries

Construction

Defence

Education

Environmental Technologies

Financial and Customer Services

Food and Drink

Marine and Maritime

Medical and Healthcare

New Technology Industries

Research and Development

Retail and Distribution Services

Tourism.

1.1 The Plymouth Travel-To-Work Area (PTTWA)

The sector-based reports in the series focus on the Plymouth TTWA, which has been defined as consisting of the following local authority areas:

Caradon District Council : 30 wards (all)

Plymouth City Council : 20 wards (all)

South Hams District Council : 10 wards (out of 33)

West Devon : 8 wards (out of 21)



This gives a total of 68 wards. In terms of postcodes, the above area coincides to a large degree with the following two postcode blocks:

PL1 - 14 and,

PL17 - 21.

1.2 Methods

The research design strategy utilises a structured and layered analytical approach. The national framework is used to provide an overall context within which an increasingly focussed regional and then more local analysis can take place. The contextualisation and anchoring of more localised data within a wider regional and national framework is crucial for both the accurate description and the analysis of dynamics within and across the sector.

The research used both secondary (desk based) and primary research (telephone survey and interviews). In the secondary research element a survey data-set held by the Devon and Cornwall Learning and Skills Council was made available to the Social Research & Regeneration Unit for further analysis, and the results of this analysis have been used in this Report.

In order to give a deeper and more detailed insight into local circumstances, needs and potential, and to highlight and accurately map the variations between the sub-region and the regional profile, the views of selected local firms, employers’ representatives and education and training providers were incorporated into the research process.

1.3 The Structure of the Report

1.3.1 Section One:

The Advanced Engineering report is arranged under the following main headings:

Sector Definition: Advanced Engineering

Regional Sector Profile and Forecasts

Sub-Regional and Plymouth Travel-to-Work Area Sector Profile and Forecasts

Workforce Development Indicators and Performance Measures

Plymouth Travel-to-Work-Area Sector Workforce Development Issues.

1.3.2 Section Two:

Sector Trends: Advanced Engineering – The National Context

Sector Occupational Trends



Sector Replacement Demand

Sector Trends: Qualifications and Training

Sector Trends in Skill Requirements

Sector Skills Gaps and Shortages

Sources and References

Acknowledgements.



2. Section One

2.1 Sector Definition: Advanced Engineering

The advanced engineering sector has been defined using the current 1992 UK Standard Industrial Classification (SIC) of establishments or SIC 92. This classification is based on the type of economic activity in which companies are engaged, essentially defined by the nature of the products/services produced. The advanced engineering sector includes a variety of manufacturing sectors. The main sub-sectors within advanced engineering are aerospace, automotive and instruments, however, other manufacturing activities are also encompassed within the definition. This classification has been used both for statistical purposes and for consistency and comparison with other studies conducted within the sector. The advanced engineering sector is defined on this basis as consisting of companies engaging in the following activities:

Standard Industrial Classification SIC Code

Manufacture of machine tools 2940

Manufacture of insulated wire and cables 3130

Manufacture of electronic valves etc 3210

Manufacture of medical/surgical equipment etc 3310

Manufacture of instruments for measuring etc 3320

Manufacture of industrial process control equipment 3330

Manufacture of optical instruments etc 3340

Manufacture of motor vehicles 3410

Manufacture of motor vehicles bodies etc 3420

Manufacture of parts for motor vehicles 3430

Manufacture of aircraft and spacecraft 3530

Moving away from these somewhat arbitrary classifications, the sector encompasses companies that are engaged in a wide and diverse range of activities. Advanced engineering includes among others, mechanical engineering, precision engineering, electronics and communications engineering, basic metals, factory automation, manufacturing, aerospace, motor vehicles and elements of shipbuilding.

Much of the sector produces products for other industries. For example, mechanical engineering produces agricultural machinery, machine tools and mechanical lifting and handling equipment. Metal manufacturers produce and supply basic metal components to other industries, for example, castings, pressings and fasteners, and also finished metal products such as hand tools, cutlery, bolts and chains.



It is important to note that aspects of advanced engineering are undertaken within and support other sectors, for example, marine and maritime (shipbuilding) and new technology industries (electronics engineering), but these other sectors are considered separately. However, the one underlying common thread between the advanced engineering sector, and other sectors that contain aspects of advanced engineering, concerns the level and range of skills that are required by engineers operating within the different sectors. In this respect, the analysis of the skills, education, qualifications and training required in the advanced engineering sector applies equally to engineers working predominately within other sectors covered by the series of reports.

2.2 Regional Sector Profile and Forecasts

A number of general trends in engineering are outlined in Section Two and these form the context for the regional and more local situations. National forecasts identify Electronic, Electrical and Precision Engineering as all likely to experience growth and a need to adapt products and working practices to changing technologies. An issue for firms in this sector is that whole areas of production can become obsolete and new products dependent upon new technologies developed so that either continued adaptation and/or a step change has to occur if the firm is to remain in business. Equally, manufacture can be moved overseas to areas of cheaper labour and, in some areas, a relatively skilled local labour force. Opportunities for growth are affected by the global and national economy and national policies form the framework for education, training and capacity building.

In order to profile the number of enterprises in the South West Region and the Plymouth TTWA, the Equifax ‘Yellow Pages’ (Business Select) database has been chosen as the most appropriate data source for the following reasons:

The database includes every business that has an entry in the Yellow Pages Directory.

The information contained in the database is accessible by area postcode.

The database records the relevant four-figure SIC code for all its entries.

Equifax also collects information (supplied on a voluntary basis by customers) on employment levels. This information is supplied in the form of seven employee bands plus a further band where customers (marked n/a in the table) have volunteered no information. Table One shows the number of firms within the relevant 11 SIC classifications across the whole of the South West Region.



Table One: Advanced Engineering Firms : South West Region SIC 1992 Codes SIC 1992 classifications Avon* C’wall Devon Dorset Glos Som Wilts Totals

3330 Manufacture of industrial. process control equipment 0 0 0 0 0 0 0 0

3320 Manufacture of instruments for measuring etc. 67 39 72 85 49 23 36 371

3310 Manufacture of medical/surgical equipment etc. 60 34 78 57 58 37 30 354

3430 Manufacture of parts for motor vehicles 32 18 38 20 20 14 22 164

3420 Manufacture of motor vehicle bodies etc. 31 14 28 23 21 11 14 142

3530 Manufacture of aircraft and spacecraft 25 5 12 25 19 8 16 110

3210 Manufacture of electronic valves etc 13 6 26 30 16 8 48 147

3130 Manufacture of insulated wire and cable 9 2 4 9 9 0 17 50

2940 Manufacture of machine tools 84 34 98 59 108 30 76 489

3410 Manufacture of motor vehicles 3 1 6 8 6 1 2 27

3340 Manufacture of optical instruments etc 10 9 7 6 9 11 12 64

Total 334 162 369 322 315 143 273 1,918

* former county of Source: Equifax CD ROM, 2001, 4th Quarter

Table Two shows the number of firms within the 11 SIC classifications and how they are distributed across the employment bands in the South West.

Table Two: Engineering Firms : Employment Bands : South West Region SIC 1992 Codes SIC 92 classifications n/a 1-5 6-10 11-19 20-49 50-99 100-200 200+ Total

3330 Manufacture of industrial process control equipment 0 0 0 0 0 0 0 0 0

3320 Manufacture of instruments for measuring etc 14 203 57 28 41 15 7 6 371

3310 Manufacture of medical/surgical equipment etc 29 222 46 22 16 10 6 3 354

3430 Manufacture of parts for motor vehicles 13 89 29 16 10 3 0 4 164

3420 Manufacture of motor vehicle bodies etc 10 78 24 10 13 5 1 1 142

3530 Manufacture of aircraft and spacecraft 5 52 17 9 9 1 6 11 110

3210 Manufacture of electronic valves etc 4 54 26 10 24 14 7 8 147

3130 Manufacture of insulated wire and cable 1 20 8 7 6 3 2 3 50

2940 Manufacture of machine tools 17 284 82 41 41 18 3 3 489

3410 Manufacture of motor vehicles 3 14 6 1 1 1 1 0 27

3340 Manufacture of optical instruments etc 5 32 13 7 3 2 1 1 64

Total 101 1,048 308 151 164 72 34 40 1,918

Source: Equifax CD ROM, 2001, 4th Quarter



One important aspect in which the South West Region differs from many other regions, is in the predicted future numbers of engineering jobs. Table Three indicates that the numbers employed in engineering manufacture generally are predicted to fall, although the decline in the South West Region will, relatively, be less sharp.

Table Three: Engineering Employment (thousands)* Year Region 1981 1991 1995 1998 2004 2010 South West 200 160.9 151.9 166.4 157.7 154.2

All 2320.3 1652.9 1492.8 1553.3 1358.7 1270.1

* Adapted from EMTA Sector Workforce Development Plan for Engineering Manufacture 2001 - 2005

To provide a more detailed profile, some of the key findings for the advanced engineering sector outlined in the SWRDA Report3 are included below.

Table Four below shows that in 1997 the sector was the fourth most important in employment terms and fifth in terms of gross value added (GVA).

Table Four: Employment in Priority Sectors : South West Region

Priority Sectors Employment GVA Output (£m)

Food and Drink 91,200 3,144

Leisure and Tourism 87,500 2,439

Financial Services 76,300 3,071

Advanced Engineering 61,000 2,290

ICT 60,900 2,458

Source: Table adapted from SWRDA Priority Working Paper 3, p. 2

In employment terms, Advanced Engineering is a large sector in the Region although there was a loss of 700 jobs between 1991 and 1997.

Most firms in the sector were small employers - 72% of firms employing less than 10 people.

However, the largest firms - 200 plus employees - accounted for 65% of the Sector workforce.

The sub regions with relatively high employment concentrations in the Sector were:

Bristol area : 24%

Swindon area : 20%

Somerset : 12%

Gloucestershire : 16%

Devon : 14%.



In employment terms, the main sub sectors were:

Manufacture of aircraft and spacecraft : 31%

Manufacture of instruments for measuring : 20%

Manufacture of parts for motor vehicles : 10%.

When analysing the sector in terms of employment share against the other Major Industrial Groups within the economy, figures provided by the Institute of Employment Research4 (IER) indicate that the manufacturing sector accounted for 20.6% of all employment in the South West in 1981. However, by 1998 the percentage had declined to 14.8%, and that the sector’s share of employment is forecast to decline further, to 11.6% by 2009.

In terms of employment share by occupation, examining the trends and any likely changes in occupational structure can provide a guide to the future skills requirements within a sector. For the South West, the forecasted percentage change in employment by occupation between 1998-20095 within the region, is detailed at the broad level of the nine Major Standard Occupational Classification (SOC) groups. The five most relevant SOC groups to advanced engineering are detailed below, along with the percentage change for the region up until 2009. The regional forecast is provided in percentage terms as follows:

Managers: 18.3% Occupational Share in 2009, a 0.7% increase from 1998.

Professional: 12.3% Occupational Share in 2009, a 2.3% increase from 1998.

Associate Professional and Technical: 11% Occupational Share in 2009, a 1.3% increase from 1998.

Craft and Skilled Manual: 11.2% Occupational Share in 2009, a 1.7% decrease from 1998.

Process, Plant and Machine Operatives: 9.1% Occupational Share in 2009, a 0.4% decrease from 1998.

Figures in the Labour Market Review for Autumn 2001 reflect the trend for future demand within occupations relevant to the sector and serve as an indicator for the trends forecast (the baseline figures were taken from 1998 in the model used). The figures show that for vacancies notified and filled in the south West for April 2001, in terms of the same occupations relevant to the sector, there was a demand for:

Managers: 2,411 notified vacancies and that only 532 had been filled.

Professional: 1,026 notified vacancies and that only 296 had been filled.

Associate Professional and Technical: 2,773 vacancies and that only 704 had been filled.



Craft and Skilled manual: 8,366 vacancies and only 3,212 had been filled.

Process, Plant and Machine Operatives: 7,400 vacancies and only 4,038 had been filled.

The pattern of employment demand by occupation is broadly in line with the forecasts. It also indicates implications for skills (shortages and gaps) within the region. These issues are dealt with in later sections. The next section looks more closely at the sub-region.

2.3 Sub-Regional and Plymouth Travel-to-Work Area Profiles and Forecasts

In this section the sub-region and the Plymouth Travel To Work Area are being considered together, before a closer examination specifically of the PTTWA is undertaken, to provide information about highly localised circumstances. There are several reasons for taking this approach. The first is at an operational level. Very little consistent and reliable data is available at the PTTWA aggregated level, therefore, forecasting future skills needs for the sector would not have been as reliable.

Secondly, Travel-To-Work Areas are an approximation of a self-contained labour market, i.e. an area within which most commuting to and from work occurs, however, the sector at this level is contingent upon the wider sub-regional and regional economies, education, training and labour pools. Thus, a detailed understanding at this level is also provided to inform strategic planning for the PTTWA within the sub-regional context. Finally, analyses within the research framework are being considered, in the national, regional and sub-regional context for the sector for the PTTWA, aided by localised primary research (interviews and a survey). This framework allows for a more robust model (see Methods on page 3.)

The advanced engineering sector covered by this report includes a variety of manufacturing sectors and the main sub-sectors within advanced engineering are aerospace, automotive and instruments. However, other manufacturing activities are also encompassed within the definition. Within this section, at the broad level, advanced engineering is referred to as the manufacturing sector for statistical purposes, using the aggregated categories of Major Industrial Groups and Standard Occupational Classifications (SOC). However, wherever possible more detailed breakdowns are provided at Sub-Major Group levels. The Major Occupational Groups including the Sub-Major Group Occupational level, are:

(1) Managers and Administrators:

1.1 Corporate Managers and Administrators.

1.2 Managers in Agriculture and Service.

(2) Professional Occupations:

2.1 Science and Engineering Professionals.

2.2 Health Professionals.

2.3 Teaching Professionals.



2.4 Other professional Occupations.

(3) Associate Professional and Technical Occupations:

3.1 Science and Engineering Associate Professionals.

3.2 Health Associate Professionals.

3.3 Other Associate Professionals.

(4) Clerical and Secretarial Occupations:

4.1 Clerical Occupations.

4.2 Secretarial Occupations.

(5) Craft and Skilled Manual:

5.1 Skilled Construction Trades.

5.2 Skilled Engineering Trades.

5.3 Other Skilled Trades.

(6) Personal and Protective Service Occupations:

6.1 Protective Service.

6.2 Personal Service.

(7) Sales Occupations:

7.1 Buyers, Brokers and Sales Representatives.

7.2 Other Sales Occupations.

(8) Plant and Machine Operatives:

8.1 Industrial Plant and Machine Operatives.

8.2 Drivers and Machine Operatives.

(9) Other Occupations:

9.1 Other Occupations in agriculture.

9.2 Other Elementary Occupations.



2.3.1 Sub-Regional Sector Trends

Note: Where the Devon and Cornwall Learning and Skills Council’s Employers Survey (2001) is referred to in any section of this Report, it should be noted that the survey data-set held by the Devon and Cornwall Learning and Skills Council was made available to the Social Research and Regeneration Unit for further analysis, and that the results of this analysis have been used in this Report. As a result, a greater level of detail at the sector level is contained in this Report than in the original Employers Survey Report.

The sector at regional and sub-regional levels largely reflects the trends in the sector at the National level. However, the recent Devon and Cornwall Learning and Skills Council’s Employers Survey conducted in 2001, provides some more detail of the sector at the sub-regional level. Results from the survey showed the change in profit margins in the last 12 months for businesses in some of the sub-sectors within advanced engineering, and some of the reasons for any reported change. The results showed that:

Metal Products: 18% of businesses reported a fall and 21% a rise in profits in the last 12 months.

Electrical: 11% of businesses reported a fall and 15% a rise in profits in the last 12 months.

Other Manufacturing: 1% of businesses reported a fall and 22% a rise in profits in the last 12 months.

Advanced Engineering in the PTTWA: 10% of the businesses reported a fall and a 20% rise in the last 12 months.

Of the businesses that reported a fall in profits in the last 12 months, 48% of electrical, optical and precision engineers cited more intensive competition as the main reason for this decline and 43% cited lower levels of sales/orders. In a further question on the expected change in profit margins in the next 12 months within the manufacturing sector in general, there was a positive outlook with 24%, predicting a rise in profits, and only 3% predicting a fall. For the advanced engineering businesses in the PTTWA the outlook was also positive with 27%, predicting a rise in profits, and only 9% predicting a fall.

A further series of questions was asked about changes in the workforce, and a more detailed analysis of the data gathered from the survey is given in subsequent sections of this report. However, on a general level for expected changes in the workforce over the next 12 months for the manufacturing sector:

15 businesses expected to increase their workforce by 25% or more.

4 expected a 10%- 24% increase.

2 expected a 1%- 9% increase.

70 or the majority of businesses expected employment levels to stay the same.



6 businesses expected a 25% or more decrease.

For advanced engineering firms in the PTTWA, of those who responded to the same question, three businesses expected to increase their workforce by 25% or more, one business expected their workforce to increase 10-24%, four expected it to stay the same and only one business expected a 25% or more decrease.

The following sections look more closely at employment and occupations within the sector.

2.3.2 Sub-Regional Sectoral Employment

Although manufacturing accounts for a smaller proportion of employment in the sub-region than in the region as a whole, it is still an important sector. Within the sub-region of Devon and Cornwall the manufacturing sector accounted for 13.5% of employment share in 1998, against the other Major Industrial Groups. Again as for the regional profile, projections provided by the IER6 have been used and indicate that by 2009 the manufacturing sector will decline in terms of employment share, to around 10.3%.

However, the profile for the two counties differs slightly. In Devon, the manufacturing sectors share of employment in 1998 was 14.2% with a predicted decline of 3.3% to 10.9% in 2009. And in Cornwall the 1998 share was 11.7%, with a predicted decline of 3% to 8.7%. The sub-region does however, fare better than the region as a whole, where employment share for manufacturing is predicted to fall from its 1998 level of 20.6% to 11.6% in 2009, a fall of 9%.

2.3.3 Sub-Regional Employment Levels

Within the sub-region of Devon and Cornwall, to put the manufacturing sectors employment share into context, there is a predicted loss of 12,000 jobs over the period of 1998 to 2009. In more detail, the rate of decline is steepest in the period from 1998 to 2004 with the loss of 8,400 jobs, the rate of decline slows between 2004 to 2009, with the loss of a further 3,600 jobs.

Again, the situation within the two counties differs slightly, with the employment level falling from the 1998 level in Devon of 66,300 to 60,200 in 2004, a loss of 6,100 jobs. The estimated loss in Devon for the period 2004 to 2009 is 2,500 jobs in total. In Cornwall, the 1998 level was 22,700 falling to 20,400 by 2004, a loss of 2,300 jobs.

The situation for Cornwall does not seem as severe as the rate of losses for Devon. However, the manufacturing base at the 1998 level in Cornwall (22,700) was only approximately one third the size of Devon’s (66,300) and proportionally the rate of decline is similar over the same period of 1998 to 2004. For the period 2004 to 2009 there is a further predicted decline in Cornwall of 1,200 jobs from the 2004 level at 20,400, to 19,200 jobs in



manufacturing by 2009. The rate of decline is steeper between the two counties for this period than in the previous period.

2.3.4 Sub-Regional Employment Level by Gender

In the sub-region the predicted rate of job losses for the period 1998 to 2009 is shared fairly evenly between men and women. However, as with the National trend within the sector there is a marked difference between employment by gender at the sub-regional level. Nationally, EMTA the National Training Organisation of Engineering Manufacture note, that currently women make up 21% of the total engineering manufacturing workforce which is projected to fall to 18% by 2009. The majority being mainly employed in two occupational groups: operators/assemblers and clerical/administration staff accounting for 42% and 34% respectively of all female employment.

In Devon and Cornwall, there were 24,300 women employed within the sector in 1998. This equates to 27.3% women in the sub-regional workforce, which is 6.3% higher than the national average at the 1998 level. It then follows that there were a further 64,700 or 72.7% men in the total workforce at the 1998 level (89,000). The predicted rate of decline within the sector for males in the workforce for the period 1998 (64,700) to 2004 (60,500) is 4,200, and for the period 2004 to 2009 (58,200) a further 2,300 male jobs are predicted to go.

Women within the sector do not fare much better during these periods than the men, with a predicted decline of 4,200 during the period of 1998 (24,300) to 2004 (20,100) and a further predicted loss of 1,300 jobs during the period of 2004 to 2009 (18,800). The projected sub-regional female employment level within the total workforce for 2009 at 24.4% would still be higher than the National level of 18%, predicted by EMTA. However, both EMTA and the sub-regional forecast include women employed in clerical and secretarial occupational groups.

2.3.5 Sub-Regional Occupational Structure

For the sub-region, the occupational structure within engineering and other manufacturing occupations for 1998 and 2009, is detailed at the broad level of the nine Major Standard Occupational Classification (SOC) groups. The nine SOC groups in terms of occupational structure in advanced engineering are detailed in Table Five below, along with their percentage share in 1998 and the projected percentage share within the occupational structure for 2009:



Table Five: Sub-Regional Occupational Structure 1998 and 2009 (Predicted) Engineering Other Manufacturing

SOC Group 1998 Predicted 2009 1998 Predicted

2009 Managers and Administrators 12.3 15.7 11.7 13..3

Professional Occupations 6.0 6.2 1.7 1.8

Associated Professional and Technical 4.6 3.2 4.0 3.6

Clerical and Secretarial 11.2 8.2 11.4 10.9

Craft and Skilled Manual 34.1 35.1 43.4 43.9

Personal and Protective Service Occupations 3.1 2.5 0.9 1.1

Sales Occupations 2.5 2.8 3.9 4.4

Process, Plant and Machine Operations 21.3 22.6 17.5 15.4

Other Occupations 4.7 3.7 5.5 5.6

Source: Table adapted from IER

It can be seen that in terms of the occupational structure within engineering and other forms of manufacture, employment is heavily concentrated within two occupational groups, craft and skilled manual and process, plant and machine operatives. However, there are also sizeable concentrations in four other groups: managers and administrators, professional occupations, associate professional and technical and clerical and secretarial, although the occupational share varies between engineering and other manufacturing in most groups. The next section looks at occupations in the five most relevant groups in terms of engineering skills in more detail, and outlines the forecasted projections in terms of employment to 2009 for these groups.

2.3.6 Sub-Regional Employment Levels by Occupation

For the sub-region, the forecast percentage changes in employment by occupation between 1998-2009, is detailed at the broad level of the nine Major Standard Occupational Classification (SOC) groups. The five most relevant SOC groups to advanced engineering are detailed below along with the percentage changes for the region up until 2009. The regional forecast from 1998 until 2009 in employment terms is shown in Table Six and shows the employment levels by occupation for 1998, 2004 and 2009 in thousands for Devon and Cornwall.

Table Six: Sub-Regional Occupational Employment Levels 1998 to 2009 Occupation 1998 2004 2009

Managers and Administrators 114,100 124,000 133,700

Professional Occupations 51,900 60,900 66,700

Associate Professional and Technical 51,600 57,600 61,000

Craft and Skilled Manual 87,900 90,300 88,500

Plant and Machine Operatives 52,100 51,500 50,900

Source: Table adapted from CE/IER LEFM estimates7



The main points in terms of projected occupational change to 2009 are given below and these changes broadly reflect the National trends of occupational change within the sector. In terms of employment share by occupation between the two counties very little difference is predicted to 2009 and this is shown in Table Seven:

Managers: 1998-2004 a 9,900 increase, 2004-2009 a 9,700 increase, giving a total increase of 19,600.

Professional: 1998-2004 a 9,000 increase, 2004-2009 a 5,800 increase, giving a total increase of 14,800.

Associate Professional and Technical: 1998-2004 a 6,000 increase, 2004-2009 a 3,400 increase, giving a total increase of 9,400.

Craft and Skilled Manual: 1998-2004 a 2,400 increase, 2004-2009 a 1,800 decrease, giving a total increase of just 600.

Process, Plant and Machine Operatives: 1998-2004 a 600 decrease, 2004-2009 a 600 decrease, giving a total decrease of 1,200.

The employment growths for occupations in Devon and Cornwall in percentage terms are forecast as follows:

Managers and Administrators: 1998-2004 a 1.4% increase, 2004-2009 a 1.5% increase.

Professional Occupations: 1998-2004 a 2.7% increase, 2004-2009 a 1.8% increase.

Associate Professional and Technical: 1998-2004 a 1.9% increase, 2004-2009 a 1.1% increase.

Craft and Skilled Manual: 1998-2004 a 0.5% increase, 2004-2009 a 0.4% decrease.

Process, Plant and Machine Operatives: 1998-2004 a 0.2% decrease, 2004-2009 a 0.2% decrease.



Table Seven: Sub-Regional Employment Share by Occupation, 1998 – 2009 1998 2004 2009 Managers and Administrators Devon 16.9% 17.1% 17.5% Cornwall 18.1% 18.1% 18.5% Professional Occupations Devon 7.9% 8.5% 8.9% Cornwall 7.9% 8.6% 8.9% Associate Professional and Technical Devon 7.9% 8.1% 8.2% Cornwall 7.6% 8.0% 8.1% Craft and Skilled Manual Devon 13.4% 12.7% 11.9% Cornwall 13.1% 12.5% 11.6% Plant and Machine Operatives Devon 7.9% 7.3% 6.9% Cornwall 7.7% 7.1% 6.6%

Source: Table adapted from CE/IER LEFM estimates

Forecasts for occupational change can be seen in more detail for the sector by using SOC Sub-Major Groups for the sub-region. The most relevant Sub-Major groups for the sector are shown in Table Eight below. The Table shows detailed projections of employment change in Devon and Cornwall by SOC Sub-Major groups for the period 1998 to 2009.

Table Eight: Sub-Regional Projected Occupational Change, 1998 to 2009 1998 2009 1998-2009 change SOC Sub-major groups thousands % thousands % thousands %

Corporate Managers and Administrators 46.600 7.1 57,100 7.6 10,500 22.5

Science and Engineering Professionals 11,000 1.7 15,100 2.0 4,100 36.7

Science and Engineering Associate Professionals 8,500 1.3 8,200 1.1 -0.400 -4.4

Skilled Engineering Trades 24,300 3.7 26,000 3.5 1,700 6.9

Industrial Plant and Machine Operators 29,100 4.4 25,300 3.4 -3,800 -13.0

Source: Table adapted from IER benchmark scenario for Devon and Cornwall

The projected occupational change to 2009 for the sub-region is again in line with National trends; with large predicted increases for science and engineering professionals and a smaller increase for skilled engineering trades. However, the projected decline in science and engineering associate professionals, does not follow the National trend and regional trend (2%), where a small increase is forecast to 2010, rather than a decline. The pattern of occupational trend for industrial plant and machine operators, is broadly in line with National trends.



2.3.7 Sub-Regional Sector Replacement Demand

In addition to the growth in new jobs as well as the loss of old jobs, it is necessary to ‘replace’ the skills that will be ‘lost’ as part of the normal process of labour turnover. There is a constant need within sectors to replace existing workers who change jobs or retire. Therefore, even in sectors where it is forecast there are likely to be ‘net job losses’, this does not necessarily imply that there will be a decline in the total number of job opportunities/vacancies within a sector. Indeed, for the advanced engineering sector there is only one case where the projections imply that there will be a decline in job opportunities, and that is in the occupational group of industrial plant and machine operators. In all the other occupational groups, as at the national level, there are net requirements in all other occupations within the sector, and the levels are shown in Table Nine below.

Table Nine: Sub-Regional Replacement Demand: 1998 - 2009

SOC Sub-Major Group Expansion Demand Retirement Occupational

Mobility Migration Replacement Demand

Net Requirement

1.1 Corporate Managers and Administrators 10,500 19,600 -28,400 0.0 -8,800 1,700

2.1 Science and Engineering Professionals 4,100 3,400 -1,200 0.0 2,200 6,300

3.1 Science and Engineering Associate Professionals

-0,400 2,500 -1,900 0.0 0,600 0,200

5.2 Skilled Engineering Trades 1,700 8,400 0,500 0.0 8,900 10,600

8.1 Industrial Plant and Machine Operators -3,800 11,000 -8,300 0.0 2,700 -1,100

Source: Table adapted from IER estimates

2.4 Sub-Regional Qualifications and Training

The sub-regional forecast for qualifications held and required is based upon the regional forecast to 20098. Table Ten shows the level of qualifications held in the South West by both men and women in 1998, and also details the predicted demand (by those in employment) for the different types of qualifications at the broad level (all industries).



Table Ten: South West: Employment by Qualification Level

Qualification 1998 thousands

2004 thousands

2009 thousands

% increase 1998-2009

Higher degrees – NVQ 5 82,000 100,000 121,000 47.6

First degree and equivalent 221,000 277,000 339,000 53.4

HE below degree level 51,000 54,000 60,000 17.6

HNC BTEC and RSA Higher etc 110,000 114,000 125,000 13.6

Nursing and Teaching 95,000 100,000 108,000 13.7

NVQ 4 total 477,000 545,000 632,000 32.5

A level and equivalent 130,000 152,000 171,000 31.5

GNVQ advanced 7,000 15,000 21,000 199.4

ONC, BTEC national etc 276,000 290,000 301,000 9.2

NVQ 3 total 413,000 456,000 493,000 19.3

GCE grades A to C 289,000 311,000 332,000 14.8

GNVQ intermediate 6,000 13,000 20,000 230.1

BTEC first diploma etc. 219,000 216,000 212,000 -3.1

NVQ 2 total 514,000 541,000 564,000 9.8

GCSE below grade C 409,000 443,000 471,000 15.3

GNVQ foundation 0 1,000 1,000 0

BTEC first certificate etc 77,000 93,000 108,000 39.6

NVQ 1 total 486,000 537,000 580,000 19.2

No qualification 256,000 222,000 169,000 -33.8

Source: Table adapted from Wilson/IER (2000)

Although Table Ten does not show any detailed forecast levels and demand for qualifications held by those in employment specifically for the advanced engineering sector, what can be discerned from the forecast is the trend in qualifications and the anticipated level of demand for certain types of qualifications within the region. This information when analysed in the context of trends within the sector can serve as an indicator for education and training providers within the sub-region of future need/provision.

The recent Devon and Cornwall Learning and Skills Council’s Employers Survey provides some detail of the sector at the sub-regional level. Results from the survey show that within the manufacturing sector 2% of those businesses that had recruited during the past 12 months had taken on graduate trainees and 40% had taken on none. For the advanced engineering sector in the PTTWA, 25% had recruited graduate trainees whereas 62.5% had taken on none.

Results from the survey relating to how important training was in management agendas showed that in manufacturing 9% of the respondents considered training to be at the top of the agenda all of the time. While a further 14% of the respondents replied that training was not really mentioned at all. For advanced engineering businesses in the PTTWA, 9% considered training to be at the top of the management agenda, while a further 64% said that it was taken seriously, among other issues. Of these advanced engineering businesses 36% reported that they had a separate training budget, 63% had a person responsible for training, but only 27% said that they had a strategic training plan.



The survey found that the size of the business was usually a key driver in explaining respondents’ perceptions of the importance of training undertaken by management within their organisations. That is the larger the organisation the more important training is considered to be by management. Within the sector at a regional level, as well as in the sub-sector, the large majority (72% in the South West) of businesses were firms employing less than 10 people. However, larger firms employing more than 200 people account for 65% of the workforce within the region. On the basis of the organisation size influencing training, a large proportion of those working in the sector may well then work for large organisations where training is high on the management agenda.

Another question concerned whether businesses had undertaken training over the past 12 months. In the sector the results showed that:

Metal Products: 57% of businesses had not undertaken any training over the past 12 months.

Electrical, Optical and Precision Engineering: 49% of businesses had not undertaken any training over the past 12 months.

Other Manufacturing: 62% of businesses had not undertaken any training over the past 12 months.

Advanced Engineering (PTTWA): 18% of businesses had not undertaken any training over the past 12 months.

Of the businesses that had undertaken training in the past 12 months for the manufacturing sector as a whole, the types of skills for which training was provided is shown in Table Eleven below.

Table Eleven: Skills For Which Training Has Been Provided Over Past 12 Months Skill Type % Other Technical Skills 70

Basic IT/User Skills 33

Customer Care 40

IT Programmer/Software Skills 34

Team Working 18

General Management 17

Sales and Marketing 25

Verbal Communication 27

Problem Solving 32

Business Planning 12

Design and Innovation 18

Basic Numeracy 7

Basic Literacy 7

None of the Above 1

Source: Devon and Cornwall Employers Survey (2001)



A question on Investors in People (IiP) revealed that only 4% of manufacturing businesses had IiP recognition. In the PTTWA, for advanced engineering businesses the figure was 18%, with a further 9% working towards recognition, although a further 73% were not involved at all with the Programme. These figures for the sector within the sub-region are well short of the targets set by EMTA (see pages 42. and 43.).

The responses to a further question relevant to training in the sector revealed that of those who had received training over the past 12 months, 37% of skilled manual staff had received training, 25% of clerical/administrative and secretarial staff, 25% of junior technical and professional staff, 21% of senior technical and professional staff, and 21% of semi skilled manual had received training. Other types of staff had also received training, but at a lower level and of these, 11% of senior/middle management had received training, 10% were in supervisory roles and a further 7% were in unskilled manual roles. This pattern suggests that for those businesses that responded to this question from the sector, the majority of training delivered has been at the middle of the occupational range, however, skewed slightly toward production occupations. Figure One, shows the incidence of training for occupational type during the past 12 months.

Figure One: Training Incidence Level by Occupation

Management and Administration

LoSupervisory

Clerical and Administration M

Senior Management

Figure One shows a concentration national trend. However, for futurethis balance must be redressed in ord

Globally, competitiveness in terms osector where the drive for efficiencreduce lead-times and greater flexibiimprove efficiency has a direct impaleader level, as well as on the prodlevel of training for supervisory staprocess.

(The survey showed that of supervismonths, which is only 3% more than

Social Research &

Skilled Manual

w Training Incidence

High Training Incidence

iddle Training Incidence

Production

on training provision skill needs within theer for businesses to be

f costs is having an ey is resulting in lean lity. Implementing acct on the skills requireuction side. This willff to develop manage

ors only 10% had rece unskilled manual staff

Regeneration Unit : 21.

Junior Technician

Senior Technician

Unskilled Manual

Semi Skilled Manual

in production, which is a sector and its sub-sectors, competitive.

ffect on the manufacturing manufacturing, the need to tivities to reduce costs and d at a supervisor and team require an increase in the ment skills to support this

ived training in the last 12 (7%)).


When asked about the drivers for training activity over the next 12 months those in the sector who responded to this question indicated a similar range of drivers to those in the sector at the national level. The drivers and the percentage of responses are detailed below:

Changing Technology : 30%

Increased work activity : 3%

New Equipment : 11%

Competitiveness : 7%

Regulation : 6%

New Processes : 6%

Re-Organisation : 2%

Staff Turnover : 2%

Customer Satisfaction, Expansion of Business, Changing Market, Knowledge of Product/Training and more importantly, Skills Shortages all on: 1%.

When asked if training helps to improve staff retention, businesses from the sub-sectors gave a mixed response, with 34% in metal products thinking that training does help to retain staff, 25% from other manufacturing, and only 21% from electrical, optical and precision engineering thinking so. However, 81% of advanced engineering firms in the PTTWA thought that training would have a positive effect on staff retention.

Further questions regarding local training provision revealed that there was a variation in the type of response to these questions between businesses that are experiencing skills gaps and those that are not. At a general level (all businesses, all industries) for the sub-region the question was asked ‘What does the company think needs to be done to improve training provision in Devon and Cornwall’. Responses are shown in Table Twelve.



Table Twelve: What Needs to be Done to Improve Training Provision in Devon and Cornwall

What needs to be done to improve Training Provision in Devon and Cornwall

Businesses with Skills Gap

%

Businesses Without Skills Gap

% Provide better information 42 19

Provide subsidised training 25 11

Better transport links and improved access 4 12

External training available on site 16 5

Increase quality of courses 38 12

Increase the relevancy of courses 33 10

More specific courses 1 1

More courses available 14 3

Better investment/resources 2 1

Better advertising 2 1

Other 15 7

None of the above - 2

Don’t know 24 51

Source: Table adapted from the Devon and Cornwall Employers Survey (2001) and Data Set

In other series of linked questions about local training provision, advanced engineering business in the PTTWA were asked to rate provision:

Availability of training locally in Devon and Cornwall:

27% thought it to be very poor

9% poor

18% average

9% good

9% very good.

Information about what training is available locally in Devon and Cornwall:


27% average

18% good

9% very good.

The quality of training courses locally in Devon and Cornwall:


27% average

18% good.



The relevance of training courses locally in Devon and Cornwall:


45.5% average

9% good

9% very good.

The following section starts to examine skills issues in the sector for the sub-region and PTTWA.

2.4.1 Sub-Regional Sector Skills Profile

To provide a profile of the sub-regional situation in terms of skills for the sector, three key elements need to be examined, skills shortages, skills gaps and other recruitment difficulties. Within this element of the Report all three categories are being considered for the advanced engineering sector.

Skills shortages are considered to exist where there is a genuine lack of adequately skilled individuals available in the accessible labour market. Skills gaps, on the other hand, exist where employers feel that their existing workforce has fewer skills than necessary to meet their business objectives. Alternatively, skills gaps may exist where employers feel that new entrants to the labour market are apparently trained and/or qualified for occupations but still lack a variety of the skills required and in some cases these gaps may not be visible to the employer (latent skills gaps).

Apart from skills gaps and shortages the work of the Skills Task Force has provided another ‘tool’ to help in labour market analysis when assessing the current position, needs and future requirements of employers and this is a third category of ‘other recruitment difficulties’. This is an umbrella term incorporating all other forms of employer recruitment problems, except for the other two (gaps and shortages) categories. Problems can be caused by poor recruitment practices, poor terms and conditions of employment, and can occur even when there are sufficient skilled individuals available and accessible for work. To sum up:

Skill shortages are produced by shortcomings, external to the organisation.

Skill gaps are produced by shortcomings, which can be external, but can also be internal to the organisation.

Other recruitment difficulties are normally produced by shortcomings internal to the organisation.



Skills Shortages

The Devon and Cornwall Learning and Skills Council Employer Survey9 found that employers reported difficulties in recruiting to both skilled trades (17% of companies who had experienced difficulties) and for operative/basic jobs (22%). The Report points out that ‘the data suggests that of the 10,000 hard to fill vacancies in Devon and Cornwall (during the past twelve months) six out of ten were in skilled trades, plant/operatives or basic jobs’. In the manufacturing sector 32% of vacancies were in skilled trades and occupations and a further 32% in process, plant and machine operatives.

In answer to a question asking if any of the businesses had recruited staff during the past 12 months, 43% within the manufacturing sector replied that they had recruited additional staff. A further question asked those businesses that had recruited if they had encountered any recruitment difficulties for the sector:

Metal products: 38% of businesses had experienced difficulties, while 58% had not, a further 5% did not know.

Electrical, Optical and Precision Engineering: 55% had experienced difficulties, 44% had not and a further 2% did not know.

Other Manufacturing: 43% had experienced difficulties, 57% had not.

Advanced Engineering (PTTWA): 50% had experienced difficulties and 50% had not.

For manufacturing in general 43% of the businesses reported hard to fill vacancies were in skilled trade jobs and a further 41% in operative occupations. Of these two occupational categories, for skilled trades in manufacturing, the main reason that employers gave to explain their recruitment difficulties was that there was a lack of applicants with the required qualifications and skills (85%). And for the other category of operative occupations the same reason was given as for skilled trades (74%).

Within the manufacturing sector when asked about what action businesses had taken to overcome these recruitment difficulties, a variety of actions were reported:

34% increased their recruitment efforts.

18% retrained their existing staff.

3% improved their pay and conditions.

11% recruited less qualified, skilled or experienced staff.

2% increased overtime.

1% altered job specification.

7% other action.

32% none of the above.

1% did not know.



Furthermore, within the sector at the time of the survey, businesses with vacancies reported that of these vacancies, 12% were in positions for managers and senior officials, 7% were in professional occupations, 6% in associate professional and technical professions. There were a further 7% in administrative and secretarial positions, 32% in skilled trades, 7% in sales and customer service occupations, 32% in process, plant and machine operatives and a further 23% in elementary occupations.

In another question asking whether businesses in the sector took skills shortages seriously and whether skills shortages impact on the future of the business the responses from different sub-sectors were mixed. Only 30% of business in Electrical, Optical and Precision Engineering, and the same percentage of these in Metal Products agreed with the statement “We take skills shortages seriously and our future depends on it.” The highest proportion of firms agreeing with the statement were classified as ‘Other Manufacturing’. For advanced engineering businesses in the PTTWA, 82% agreed with this statement.

The cyclical nature of some of the sub-sectors, for example, electronics and aerospace, contributes to cyclical training patterns within the sector. In the main the occupational areas in which engineering recruitment difficulties periodically recur – technicians, graduate engineers and craftspeople – are those which require relatively long periods of time for trainees and students to acquire the necessary skills and experience required in periods of rapid growth in some of the sub-sectors. During periods of recession within the sector as a whole and in the sub-sectors, there are strong cost pressures on business to reduce expensive long term training programmes. This has long lasting consequences for the future availability of skilled labour (EMTA estimate, for example, that it costs around £69,800 to train a higher technician to HNC level, and it takes around four and a half years). In times of rapid growth, therefore, the time taken to train new staff will inevitably be too great to alleviate shortages of skilled labour within the workforce over the short term.

Skills Gaps

Within the sector skills gaps were reported by many businesses in the sub-sectors. In a question related to companies experiencing gaps between the skills of current employees and those that the organisation needs to meet its business objectives the sub-sector responses were that:

14% of Other Manufacturing companies reported skills gaps.

14% in Metal Products reported skills gaps.

11% in Electrical, Optical and Precision Engineering had reported skills gaps.



In terms of skills missing by occupation, in businesses where skills gaps were reported in the occupations most relevant to the sector, the missing skills and the length of time these skills had been missing within the organisation were:

Managers: Computer systems/network support (12 months).

Professional: General management (11 months).

Associate Professional and Technical: Basic IT/User Skills (11 months).

Craft and Skilled Manual: Problem solving, computer systems, design and innovation (33 months).

Process, Plant and Machine Operatives: Basic literacy and team working (30 months).

This again is similar to the national situation. However, to emphasise the effects of these gaps on productivity, in a national survey undertaken by EMTA, businesses that reported skills gaps in the sector were asked in which occupations these gaps were having the greatest impact, and the responses were the same as the ones for occupations in the sub-region.

When asked to detail what actions they had taken to address any perceived skills gaps 55% of firms said that they had allocated more resources to training and/or developing existing staff, 25% said they had retrained existing staff, 23% said that they had increased recruitment efforts and 18% had recruited new staff with the required skills. A further 16% took no action, whilst 3% improved pay and conditions, 2% recruited less qualified staff and 1% sub-contracted work to overcome the perceived skills gaps.

When asked to provide an insight into what they thought were the main drivers of current skills needs the answers given tended to coincide with the overall national drivers for the sector. For example, changing technology, regulation, competitiveness, customer satisfaction and re-organisation. (For a more detailed analysis of the main drivers for skills demand in the sector, see Section Two).

In a series of questions (all businesses, in all sectors) in which businesses were asked if they agreed or disagreed with a number of statements, the responses of the advanced engineering businesses differed noticeably from those of all businesses from all sectors in a number of areas. The questions were (in italics):

There will always be skill shortage/gaps in the workforce; they are a fact of life in business.

All Businesses from all sectors: 66% agreed with this statement, 30% disagreed.

Advanced Engineering (PTTWA): 45.5% agreed with this statement, 54.5% disagreed.



Skill shortages are a real threat to our business.



We cope with skill shortages and get around it.



Skill shortages are a short-term thing, it will get better.



Other Recruitment Difficulties

Other recruitment difficulties are normally produced by shortcomings internal to the organisation. In the case of the advanced engineering sector and the manufacturing sector in general, studies undertaken at the national level, together along with other local research evidence, shows that a large number of businesses suffer from shortcomings internal to the organisation that impact on recruitment efforts.

In the Devon and Cornwall Employers Survey, for example, businesses within the sector and its sub-sectors have a fairly low training incidence and a low level of workforce development generally. Within the sector only 9% of businesses considered training to be at the top of the management’s agenda. The results from the IiP question showed that only 4% of businesses within the sector were involved with the programme, a programme that is a national quality standard which sets a level of good practice for improving organisational performance through developing people. Although this figure improved for advanced engineering businesses in the PTTWA at 18%, this level is still well below national and sector targets for IiP.

Some recruitment difficulties affect the whole sector, and impact on all organisations.

Specific issues for the PTTWA include the number of small firms and the geographical situation which limits the occupational catchment area, especially for those with higher level skills. Employers considered that there was an insufficient local labour supply with the right skills for the needs of ‘high tech’ companies (skills shortages). These problems were exacerbated by the fact



that there were ‘insufficient high tech companies in the area to facilitate career moves for staff’ – both laterally within the area and attracting employees and partners in from other areas. And this situation is again compounded by the move within the sector by organisations towards flatter organisational structures in order to increase efficiency which adds to the decreasing average size of business (other recruitment difficulties).

The advanced engineering sector has been dogged for decades by a poor image. The image of engineering in the UK is a particular problem for the industry. For many people, the word ‘engineer’ brings to mind a man (there is a low percentage of women within the sector) in dirty overalls with a spanner in his hand, with the image of the sector being usually associated with noise, dirt and heavy work. However this image hides an increasingly diverse, innovative and sophisticated sector. Other recruitment difficulties here relate to the perception of individual businesses within the sector by potential future employees.

The Skills Dialogue Report, and many of the individuals consulted for this Report, highlight that the engineering sector is seen as being unattractive to young people, in particular, the poor image of the sector to those choosing a career and also a lack of knowledge about the range of jobs in the sector, and engineering/technology matters in general are important. The limited numbers choosing mathematics and science subjects at school compound this situation. There may also be a reluctance by many people to seek training opportunities or to consider taking engineering degrees because of the negative perceptions regarding their long term employment prospects in the industry. There have, for example, been highly publicised mass job losses, both nationally and locally, for instance in the high-tech electronic industry and some of the sub-sectors are cyclical in nature.

Turning now to the highly localised consideration of the sector within the PTTWA, Table Thirteen shows the number of firms within the 11 SIC classifications of the advanced engineering sector and how they are distributed across the employment bands in the Plymouth TTWA.



Table Thirteen: Advanced Engineering Firms : Plymouth TTWA SIC 1992 Codes SIC 1992 classifications n/a 1-5 6-10 11-19 20-49 50-99 100-200 200+ Totals

3330 Manufacture of industrial. process control equipment 0 0 0 0 0 0 0 0 0

3320 Manufacture of instruments for measuring etc. 1 14 3 4 1 0 1 2 26

3310 Manufacture of medical/surgical equipment etc. 1 14 4 1 1 1 0 1 23

3430 Manufacture of parts for motor vehicles 0 6 3 1 1 0 0 0 11

3420 Manufacture of motor vehicle bodies etc. 0 2 0 1 0 0 0 0 3

3530 Manufacture of aircraft and spacecraft 0 1 0 1 1 0 0 0 3

3210 Manufacture of electronic valves etc 1 3 1 0 1 1 1 1 9

3130 Manufacture of insulated wire and cable 0 0 0 0 0 0 0 1 1

2940 Manufacture of machine tools 1 17 8 4 4 4 1 1 40

3410 Manufacture of motor vehicles 0 1 0 0 0 0 0 0 1

3340 Manufacture of optical instruments etc 0 1 1 1 0 0 0 0 3

Total 4 59 20 13 9 6 3 6 120

Source: Equifax CD ROM, 2001, 4th Quarter

In the case of the Plymouth TTWA Table Thirteen indicates that the number of firms employing less than 10 people is slightly less than the regional level. A number of regional patterns do emerge and the national predictions related to occupational changes and skills needs will be broadly reflected in the local area. Variations, such as the greater numbers of smaller firms do make a difference both to the vulnerability of the firm and to the support needed in the provision of training. The next section is concerned with some of the skills and occupational structure issues as perceived by local employers.

The views of many local employers about skills needs coincide with those expressed in national reports. Equally the spread of firms in the Plymouth TTWA indicates that the predictions for future needs for changes in the balance of occupations and skills needs, and therefore for training is likely to be coincident with the national picture. Issues for the Plymouth TTWA, however, include the number of small firms and the geographical situation which limits the occupational catchment area, especially for those with higher level skill. In this case the training provided locally and the extent to which local firms can be supported by networks and general educational and training facilities is crucial.

2.4.2 The Experiences of Local Companies

The City of Plymouth Report on Competitiveness Issues for the Electrical, Electronic and Precision Engineering Sector in Plymouth (February 1999) confirms the importance of this sector (covered by SIC Codes 19, 30, 31, 32, 33, and 35) for Plymouth. Whereas, in 1996 the sector employed 4% of the workforce nationally (26% of the manufacturing sector), the respective rates



for Plymouth were 13% of all employees and two thirds of employees in manufacturing.

National forecasts identify Electronic, Electrical and Precision Engineering as all likely to experience growth and a need to adapt products and working practices to changing technologies. An issue for firms in this sector is that whole areas of production can become obsolete and new products dependent upon new technologies developed so that either continued adaptation and/or a step change has to occur if the firm is to remain in business. Equally, manufacture can be moved overseas to areas of cheaper labour and, in some areas, a relatively skilled local labour force.

The Plymouth survey of employers found that employers considered that there was an insufficient local labour supply with the right skills for the needs of 'high tech' companies. These problems were exacerbated by the fact that there were ‘insufficient high tech companies in the area to facilitate career moves for staff’ - both laterally within the area and attracting employees and partners in from other areas. They were keen to attract more A level quality students with technical ability to take up modern apprenticeships.

Some of the problems in recruiting technically skilled professional engineers and technicians and, equally, craftspeople and technicians with either technical proficiency or aptitude are reflected across the engineering sector in the EMTA findings. While in fast changing high tech firms the problems may be writ large, current technical engineering skills gaps were reported across the sector for a number of occupational groups. 42% of firms reported technical engineering skills gaps for professional engineers, scientists and technologists; 65% for technician engineers; 70% in craft occupations; 46% for operators and assemblers.

A survey of employers carried out for the current project confirmed that while many firms could satisfy their workforce needs from the local community for semi-skilled and lower skilled workers, some problems were experienced in recruiting to jobs which required higher level technical skills. Some firms reported a reluctance among school leavers to enter apprenticeships, even though experience had shown that this form of training remained the best long term staff investment. Firms also reported on the difficulty of recruiting trained staff with specialist skills, who, because of their relative scarcity, could demand high wages and would frequently move to better paid jobs elsewhere. This meant that recruitment was frequently out of area as the local pool of skilled engineers, in particular tool designers and setters, was inadequate to meet local need.

For future needs businesses tend to look only to a minimum related skill area, taking the view that on the job training would then be sufficient to hone existing skill sets to specific company needs. There were, however, differences in attitude related to company size and the stability of order books as well as the level of specific work related skills needed by the business.

When trying to look at the future, those experiencing difficulties in filling posts that required higher level technical skills, especially the larger firms, thought that these problems would continue as they felt that their markets



would remain stable or experience growth. Smaller firms, especially those on short-term or ad hoc orders, felt unable to speculate over the longer term. Indeed, very few of the firms were willing to make forecasts about their trading positions and skills needs over the next ten years.

Where administrative workers were required, businesses were satisfied with the skills possessed by the available Plymouth TTWA pool of labour, any training needs could easily be met by training providers in the area and in general staff turnover was not experienced as a problem.

For technical/engineering skills, the larger firms had formal training programmes in place, which were decided locally, even when the organisations were part of a group. Other firms stated that they provided ‘on the job’ training, as and when required and some had entered into arrangements with training providers through membership of a trade organisation.

None of the sample firms specified entry qualifications, although one was currently trying to establish these and HNC was seen as a good guide for technical posts. The general qualities and skills that were preferred in recruits, other than those that were job specific, included a ‘rounded engineering experience’ and good communications abilities.

Overall, it is important to emphasise flexibility and network provision, so that training does not get stuck in a dysfunctional rut. The support of SMEs is crucial. Work with schools is also crucial. There is a genuine lack of interest in engineering on the part of many young people – it is not just a matter of image.

Importance was also placed upon developments in GNVQs and the expansion of Modern Apprenticeships. The need for some general 'hands on' skills as well as technical knowledge was mentioned by local employers and some found that it was difficult to recruit suitable apprentices locally. Gaining some experience of engineering at an earlier age could help young people to make more informed decisions about taking up engineering apprenticeships. Many young women who do enter engineering courses consider that they are at a disadvantage in comparison with most of their male contemporaries in not having had experience in practicing manual and mechanical skills. It is, however, important to emphasise that general skills and the ability and willingness to learn and to adapt are probably equally as important as occupationally specific skills in some of the fast changing sectors.

2.5 Plymouth TTWA Sector Workforce Development Issues

The aims and objectives of this report for the advanced engineering sector are two fold:

To undertake a sector based study to provide a more detailed understanding of the advanced engineering sector in the PTTWA.

And crucially, to identify the skills that employees of firms within the sector will require in order to compete successfully on a global basis.



In undertaking the sector analysis, a detailed account of the sector has been provided including sector trends, occupational trends, trends in education, qualifications and training, skill requirements, skills gaps and shortages. The examination of the trends has provided a valuable insight into the changing skills needs within the sector. This has crucially facilitated the identification of some of the skills that employees within the PTTWA and the sub-regional economy in which it operates, will require now and in the future in order to compete successfully in the market place.

A number of issues for workforce development for the sector in the PTTWA in the short-term and medium- to long-term have also been brought to light. The main issues for workforce development emerge from the following points:

Employment

There is a generally positive short-term outlook by many businesses within the sub-region and the PTTWA, with many expecting profits to remain stable or increase over the short-term. In terms of employment this situation will offer many job opportunities within the sector.

Although the sector accounts for a smaller proportion of employment in the sub-region than in the region as a whole, it is still an important sector and accounted for around 13.5% of employment share in 1998, although this is predicted to decline to around 10.3% by 2009.

The steepest period of decline is forecast up until 2004, with the rate of decline slowing to 2009. However, occupations within the sector will be affected differently by this forecast decline. This situation does not necessarily imply that there will be a decline in job opportunities/vacancies within the sub-region and PTTWA in advanced engineering, as it will be necessary to replace existing workers who change jobs or retire.

For the advanced engineering sector there is only one occupational group where the prediction implies that there will be a decline in job opportunities: industrial plant and machine operators. In all other occupational groups there are net requirements within the sector. Overall the net requirement to 2009 is forecast to be in the region of 17,700 jobs.

There is a low level of graduate recruitment within the sub-region at 2%, however, for the PTTWA the figure was higher at 25%.

Training



Training was not considered to be a high priority by many businesses within the sector, with only 9% in the sub-region, and 9% in the PTTWA considering training to be at the top of the management agenda.

However, the size of the business was a key driver in explaining respondents’ perceptions of the importance of training. The larger the organisation the more important training is considered to be by management. However, for workforce development, it must be noted that there is a high proportion of small firms operating within the sector at both the sub-regional and PTTWA levels.

Many businesses had not undertaken any training within the last 12 months within the sub-region. However, the situation was much better in the PTTWA for advanced engineering firms where only 18% of businesses had not undertaken any training in the last 12 months.

Only 4% of businesses from the sector had IiP recognition within the sub-region. Again, however, for advanced engineering businesses in the PTTWA the figure was higher with 18% being recognised and a further 9% working towards IiP.

The push by IiP towards SMEs should help to raise the levels. The new Standard focuses on business outcomes rather than processes.

In terms of training provided by businesses within the sector, training was skewed towards production occupations. This pattern is indicative of a national trend. However, for future skills needs, there will need to be a redressing of the balance in order for businesses to compete (more detail is included later on this issue).

The main drivers for training activity reflect the national situation. These drivers are:

Changing technology.

Increased work activity.

New equipment.

Competitiveness.

Regulation.

New processes.

Re-organisation.

Staff turnover.

The cyclical nature of some of the sub-sector contributes to cyclical training patterns within the sub-region.



Importantly, skills shortages were only considered to be a driver for training by 1% of businesses. Within the sector generally, when asked if training helps to improve staff retention there was a mixed response. However, 81% of advanced engineering businesses in the PTTWA thought that training would have a positive effect on staff retention.

Many advanced engineering businesses in the PTTWA thought that the availability of training in Devon and Cornwall was generally poor, but that the training was of a reasonable standard and relevant to their businesses. Only 37% thought that the information about the training available was good.

Skills

Many businesses in the sector reported skills shortages, with half of the advanced engineering businesses in the PTTWA reporting such shortages. Many of these shortages were in skilled trades, whilst others were reported in operative occupations. The main reason given for recruitment difficulties was a lack of applicants with the required qualifications and skills.

Although there was a mixed response by businesses on whether they took skills shortages seriously and whether skills shortages impact on the future of their businesses, 82% in the PTTWA said that they took them seriously.

Skills gaps were reported by many businesses in the sub-region. Some skills were reported to be missing for particular occupations for between 11 and 33 months, which in turn severely impacts on organisational performance and competitiveness.

Image and Recruitment Difficulties

The sector suffers from other recruitment difficulties, as well as skills shortages and skills gaps. The generally poor image of the sector as a whole affects individual organisations, which in turn becomes an internal organisational problem impacting on recruitment efforts.

The poor image of engineering in the UK is a particular problem for the industry, and many of the individuals consulted highlighted that the sector is seen as unattractive to women and young people. Equally there is a lack of knowledge about the range of jobs in the sector, and about engineering and technology in general, and the situation is exacerbated by the limited numbers choosing mathematics and science subjects at school.

The move towards specialist engineering status for Devonport High School for Boys would help to raise the profile of the sector in the PTTWA, and encourage more young people to consider a career in the industry.



There may also be a reluctance to seek training opportunities or consider taking engineering degrees because of the negative perceptions regarding long term employment prospects in the industry, and the cyclical nature of some of the sub-sectors with highly publicised mass jobs losses both nationally and locally, for example, in the high tech electronics industry.

Specific issues for the PTTWA, include the number of small firms and geographical situation, which limits the occupational catchment area, especially for those with higher level skills. Employers considered that there was insufficient local labour supply with the right skills for the needs of ‘high tech’ companies.

These problems were exacerbated by the fact that there were insufficient ‘high tech’ companies in the area to facilitate career moves for staff – both laterally within the area and attracting employees and partners in from other areas. This situation is compounded by the move within the sector towards streamlining and flatter organisational structures in order to increase efficiency.

Main Issues:

Skills Needs: Short to Medium Term

The examination of general trends, occupational shifts, education, qualifications and training within the sector, has identified short to medium term skills needs for the sub-region and PTTWA. In the short term there are skills shortages, skills gaps and other recruitment difficulties to be addressed in order to ensure support for local businesses and to prevent short term issues from impacting on the long term future of the sector. Most occupations within the sector require long training periods, complemented by experience, and these issues are detailed in this report. However, while detailed knowledge of current circumstances and short term trends are essential to underpin longer term forecasting, the main focus of this report is upon the medium and longer term skills needs of the sector.

Skills Needs: Medium to Long Term

The national trends within the sector highlighted in this report are largely reflected within the sub-region and PTTWA. Many of these trends have also been highlighted by the employers and in the interviews conducted with a range of industry educators, trainers and representatives. There is also an acknowledgement that the traditional skills (for example, engineering skills at the craft level) that have underpinned the engineering sector for decades are crucial to the long-term health of the sector.

However, new organisational patterns have already emerged or are emerging, which demand increased flexibility, multi skilling and increased efficiency with a shift in production to more value added products and processes, all of which impact on future skills needs.



Globally, manufacturing cost competitiveness is having an effect on the manufacturing sector, where the emphasis on efficiency is resulting in ‘cost down’ lean manufacturing and the need to reduce lead-times in what could be described as lean and agile manufacturing. Within these trends a range of situations face organisations of different sizes, in different positions in the supply chain and in different sub-sectors. These trends are being met by equally different strategies in response to market developments. Some businesses are focusing on core activities, moving up to the quality end of the volume market, or occupying lower volume, higher margin market niches. Each of these strategies has an impact on skills and workforce development needs and approaches within the sector.

In order to help understand the complex relationship between product market strategy, performance and skills in more depth, a model has been created that allows product market position to be defined and the skills related to that position to be identified. The Puttick Grid uses product/service complexity and the degree of market demand to categorise product market position.

The Warwick Manufacturing Group developed this conceptual framework in 1998, with the grid being named after John Puttick, one of the Group's members. The original thinking, and the grid illustrating it, was concerned purely with the interplay of manufacturing strategies and competitive performance. However, since its inception its value as an aid to strategic thinking across nearly all product/service sectors has become recognised.

Business enterprises can broadly be categorised as being in four basic types of product market situation with quite different characteristics and requirements from their production systems if they are to be more competitive than their rivals. These are (clockwise from top left in the grid):

Super value goods and services typified by products and/or services that consist of a large number of components, probably carrying a relatively high value but in an uncertain market of small size (by numeric volume). Fitness for purpose and functional superiority is critical to success here and relies on higher level skills and competencies.

Fashion/fast response typified by relatively simple products and/or services by number of components because they are products in markets that are fickle with short product life cycles.

Commodity products and services are usually set up for high volumes from dedicated process lines at minimum cost. They tend to be simple products or services and warrant the high capital investment required for the relatively dedicated production systems. Low cost per unit is vital to gaining and not losing an exceedingly tight profit margin.

Consumer durables include many products and/or services that are of moderate complexity but are in much high volume markets of lower uncertainty. Balanced processes are the key to success and optimisation of production techniques are often important.



Figure Two: The Puttick Grid Product Complexity High Low Super Value Goods Fashion Strategic

High (people v. important)

Uncertainty

Low Procedural Consumer Durables Commodity

(set and follow procedure)

Development (grow people)

Instrumental (fill vacancies, just in time

training)

Source: Skills Matter

The skill implications of each quadrant vary in importance between different styles of production system and the customer expectations that they must be able to meet.

Taking the four quadrants in turn, the key skill related profiles characteristics are:

Top left - 'super value goods and services' - requires good project managers trained in complex risk assessment and able to consider and assess conflicting information and potential outcomes. Ideally the enterprise will have a research and development programme and an organisational regime that allows freedom for innovation and creating novel solutions. Also with growing product 'customisation' the need to have very high-level customer orientated interactive skills is increasingly essential.

Top right - 'fast response' - management needs to be flexible in order to be very responsive to fluid market change. Advanced marketing, logistics and customer delivery skills are required to underpin the success of this production mode.

Bottom right - 'commodity' - standardised cost driven production is achieved through highly automated processes requiring only low skill operatives. However, needs a technically high skill cadre capable of keeping 'down-time' to the minimum.

Bottom left - 'consumer durables' - the production skills required are focused on technician skills, product changeover, re-setting, and re-programming as opposed to new product development. Skills that reinforce 'right first time' production are crucial.



Figure Three: The Puttick Grid: Skill Needs

High Complexity Low

High

“Agile”

Uncertainty

Project Management

Research & Development

Product or service design skills

Craft Production or delivery skills

Marketing

Logistics

Craft Production or delivery skills

Low

“Lean”

Team working

System design

Cell manufacturing

Communication skills

Cost control

System design

Plant maintenance

Logistics

Unskilled minders/Operatives

Source: Skills Matter, p. 50

The Puttick Grid’s usefulness can therefore be seen to be twofold:

At the sector level it provides a typology that not only delineates the different skill requirements within sectors but also draws out similarities of skill requirements across various sectors.

At the company level it provides a tool for enterprises to start the process of discovering and then exploring any latent (existing or potential) skill gaps.

Obviously, businesses can move around the grid in a change of strategy. Strategies and products can be adapted. For example, as the product life cycle changes, a product may well begin by commanding high margins from low volume, in the top left quadrant. But as the market matures and changes the product may move or be driven by market forces into a consumer durable position before becoming a commodity. Whichever quadrant businesses operate in, for individual employers and for training providers the grid provides a valuable tool to position businesses and to analyse current and future skills needs as a result of quadrant positioning. It can act as a tool to aid strategic planning, benchmarking or in skills audits.

Evidence from the sector indicates that nationally and at the regional and sub-regional level the trend is towards super value goods, fashion/fast response, and consumer durables. That is not to say that there are not any firms operating in the bottom right of the Puttick Grid, commodity products, but these businesses are finding the global marketplace to be very competitive.

At the other extreme in the grid (super value goods and services) in one of the interviews for example, the comment was made that the manufacturing industry may



follow the trends in Japan in relation to the location of manufacturing plants. Japanese firms tend to base their research and development sectors within Japan, while placing the physical location of production in other countries. The UK may in the future see this type of shift. If this type of shift does occur, the skills required will be very different than where firms are operating in other areas represented in the grid. Project management, research and development, product or service design and craft production or delivery skills will be needed, if the shift takes place.

In terms of training the pattern of training incidence in the sub-region was slightly skewed towards the production end of the business. However, for future skills needs within the sector and its sub-sectors, there will need to be a redressing of the balance in order for businesses to compete in lean manufacturing. Implementing ‘cost down’ lean manufacturing activities has a direct impact on the skills required at a supervisor and team leader level, as well as on the production side.

The 1999 Employers Skills Survey10 provided some evidence about the skills required by firms seeking to implement new, higher quality product areas or to improve the quality of their existing operations. In the survey just over 25% of engineering employers reported plans to move to higher quality product areas.

Tables Fourteen and Fifteen list the new or additional skills that engineering firms considered they most required in order to be able to achieve this adjustment.

Table Fourteen: New or Additional Skills Needed to Move to Higher Quality

(%)

Technical and practical skills (non-IT) 71

Team working skills 64

Management skills 56

Problem-solving 54

Customer handling 54

Communication skills 50

Basic computer literacy 43

Advanced IT or software skills 36

Numeracy skills 34

Literacy skills 33

Other 3

Source: ESS1999



Table Fifteen: New or Additional Skills Needed to Achieve Higher Efficiency

(%)

Technical and practical skills (non-IT) 80

Team working skills 53

Management skills 40

Problem-solving 49

Customer handling 42

Communication skills 36

Basic computer literacy 33

Advanced IT or software skills 25

Numeracy skills 28

Foreign language skills 10

Literacy skills 25

Other 3

Source: ESS1999

The ESS Survey highlighted the importance of communication, customer handling, and team working skills as the most important for establishments attempting to improve either value-added or production efficiency. The key skill areas across sectors related to:

Technical knowledge that went beyond traditional functional boundaries.

Technical knowledge combined with general management skills (e.g. team leading).

Ability to manage sometimes complex strategic relationships and alliances.

Managing customer relations.

Knowledge of product markets to enable new opportunities to be identified.

The currency of the future in terms of skills for the sector points towards flexibility, multi-skilling and problem solving, all underpinned with a high level of technical understanding, generic and personal skills.

2.6 Workforce Indicators and Performance Measures

In this section a series of workforce development indicators and performance measures are suggested for the sector.



Investors in People

Investors in People (IiP) is a national standard which sets a level of good practice for improving organisational performance through developing employees. Monitoring the achievement of IiP or the commitment to IiP for businesses within the sector provides a good indicator for sector Work Force Development within the sub-region and PTTWA. A series of benchmarks and performance monitors could be used here and some of the most relevant to the sector and sub-sectors are detailed below.

IiP Benchmarks and Targets

The sub-region results from the Devon and Cornwall Employers Survey showed that for the manufacturing industry the IiP level was approximately 4% of businesses. For advanced engineering businesses in the PTTWA the level was higher with 18% recognised and a further 9% working towards recognition. Table Sixteen details sub-sector benchmarks for PTTWA businesses within the sector. The Table is adapted from the 2000 Peoples Skills Scoreboard for the engineering industry, which was designed as a benchmarking tool by the Engineering Employers Federation and EMTA.

Table Sixteen: Companies Recognised/Committed to IiP Industry Sector/Size of Company (%)

Industry Sector 1 - 49 employees

50 - 100 employees

100 – 249 employees


500+ employees Average

Basic Metals 21.7 54.5 53.3 0 25 36.4

Metal Products 19.2 39.3 57.1 69.2 66.7 39.4

Mechanical Equipment 32.7 50 35.7 73.3 66.7 43.9

Electronics 18.9 24.1 78.6 54.5 66.7 36.1

Electrical Equipment 35.3 31.3 55.6 75 80 47.1

Motor Vehicles 20 72.7 30 44.4 58.3 48.9

Transport Equipment 12.5 100 33.3 100 66.7 46.2

Aerospace 25 66.7 83.3 77.8 78.6 71.4

Total 25 43.8 52 65.3 66.2 43.9

Source: EEF/EMTA: The Peoples Skills Scoreboard for the engineering industry (2000)

EMTA have also set sector targets for commitments to, and recognition for, IiP for engineering companies and these are shown in Table Seventeen below. Although no national target was set for businesses with fewer than 50 employees it was recognised as important to persuade these companies to go for the standard. EMTA have since set as a target for these businesses to be recognised as IiP at 10,000 by this year.



Table Seventeen: EMTA IiP Sector Targets Committed or Recognised Recognised 50 - 199 200+ 50 - 199 200+

1997 actual 28% 56% 5% 18%

Sector targets:

2000 35% 70% 20% 50%

2005 40% 80% 30% 60%

2010 50% 85% 40% 70%

Nacett National Target - - 35% 75%

Source: Table adapted from EMTA Workforce Development Plan

The 2000 People Skills Scoreboard for the engineering industry also provide a benchmark for apprentice recruitment and graduate recruitment within the sub-sectors and these are given below:

Apprentice Recruitment:

Basic Metals : 5.1%

Metal Products : 2.8%

Mechanical Equipment : 2.3%

Electronics : 2.2%

Electrical Equipment : 3.7%

Motor Vehicles : 3%

Transport Equipment : 1.8%

Aerospace : 2.2%

Industry Average : 2.4%

Graduate Recruitment:

Basic Metals : 4.5%



Electronics : 3.4%


Motor Vehicles : 2.1%


Aerospace : 2.5%




The 2000 People Skills Scoreboard for the engineering industry also provide a benchmark for employee turnover, off-the-job training spend, and for informal training or on-the-job training investment within the sub-sectors and these are given below:

Employee turnover:

Basic Metals : 9.3%



Electronics : 14.5%


Motor Vehicles : 5.8%


Aerospace : 4.5%


Off-the-job Training Spend

Table Eighteen: Off-the-job Training Spend per Employee by Industry Sector/Size of Company (£000s)


50 - 100 employees




Basic Metals 0,070 0,150 0,220 0,080 0,280 0,210

Metal Products 0,210 0,170 0,200 0,270 0,250 0,230

Mechanical Equipment 0,180 0,270 0,350 0,400 0,680 0,500

Electronics 0,190 0,180 0,310 0,760 0,220 0,370

Electrical Equipment 0,170 0,240 0,230 0,210 0,200 0,210

Motor Vehicles 0,220 0,330 0,140 0,220 0,900 0,710

Transport Equipment 0,160 0,190 0,190 0,560 0,380 0,370

Aerospace 0,350 0,270 0,460 0,730 1,090 1,030

Total 0,180 0,220 0,260 0,410 0,730 0,560

Source: EEF/EMTA: The Peoples Skills Scoreboard for the engineering industry (2000)



Off-the-job Training Days

Table Nineteen: Off-the-job Training Days per Employee by Industry Sector/Seize of Company


50 - 100 employees




Basic Metals 0.6 2.8 3.9 0.8 2.4 2.1

Metal Products 1.1 2.3 1.5 3.2 3.3 1.7

Mechanical Equipment 1.7 1.9 2.6 3.2 2.5 2.2

Electronics 1.7 2.0 2.7 4.5 3.1 2.3

Electrical Equipment 1.9 3.9 1.7 3.3 3.7 2.5

Motor Vehicles 2.6 1.5 2.2 1.9 2.7 2.2

Transport Equipment 2.9 2.0 1.8 3.0 2.5 2.4

Aerospace 1.4 1.9 3.3 5.6 5.9 4.2

Total 1.5 2.3 2.3 3.5 3.5 2.3

On-the-job Training Investment (given in approximate hours per week on average over a 12 month period, excluding trainees):

Basic Metals : 1.4 hours

Metal Products : 1.6 hours

Mechanical Equipment : 1.35 hours

Electronics : 1.84 hours

Electrical Equipment : 1.4 hours

Motor Vehicles : 1.9 hours

Transport Equipment : 1.75 hours

Aerospace : 2.45 hours

Industry Average : 1.64 hours



3. Section Two

3.1 Sector Trends: Advanced Engineering – The National Context

Engineering skills are used in many and diverse ways within the UK economy in a variety of sectors. Recent estimations11 established that there are around 2.5 million people employed in occupations that have some engineering component, about half of whom are in substantially engineering occupations. The majority of employment is in engineering manufacturing occupations, despite the long-term decline in much of the sector, but a number of other sectors also have substantial numbers, and there continues to be a strong demand for engineering skills in the UK economy.

The engineering sector remains a very important component of the UK economy, representing around eight per cent of total UK GDP12 and more than one-third of UK exports. However, there are noticeable differences reported between different engineering occupations and different engineering sub-sectors, for example, between electronics and mechanical engineering. The demand for advanced engineering skills is especially strong in the fast growing electronics and telecommunications industries. The more traditional areas within the sector such as metal manufacturing and fabrications have faired less well, having declined substantially in terms of employment over the last two or three decades.

The Employers Engineering Federation (EEF)13, in a report published at the end of last year succinctly provides the wider industrial context that the current debate over engineering skills operates within, commenting that manufacturing stands at the crossroads, with some people arguing that it is in terminal decline and that it has no future in the UK. Others have suggested that little actual physical production will take place here and that we must concentrate almost exclusively on other aspects of manufacturing such as design, research and development. The EEF considers that both these theories are incorrect and that the UK would suffer economically if they were allowed to become reality.

However, the EEF recognises that manufacturing will be subject to massive change, and that by the end of this decade will look significantly different than it does today, and comments that new technology, the growth of e-business, the rising importance of environmental regulation and increasing competition from lower waged (but increasingly skilled) overseas workforces will all be major forces of change. A number of studies conducted within the sector,14 including those conducted by the EMTA,15 provide details of the changes impacting upon the sector. A brief summary of some of the major sources or drivers of change is listed below:

New working practices, such as cell and team working and ‘just in time’ manufacturing.

Structural changes in the sector, such as the growth of out-sourcing and the devolution of responsibilities down the supply chain.

The need for innovation as a result of shorter product life cycles and design cycles, meaning that companies need to continually innovate new products, methods of production and working.



Technological change - new technology constantly initiates changes in working practices and design scopes, aiding innovation and product development, production cycle times and quality assurance. Developments in information and communications technology (ICT) has the capacity to revolutionise the way businesses are organised, for example stock control systems and interaction with suppliers. While e-commerce has the capacity to change the nature of businesses interaction with end users or customers.

The cyclical nature of some of the sub-sectors e.g. electronic engineering.

Businesses within the sector are operating in an increasingly competitive market place, with customers being more demanding leading to an increased emphasis upon customer service.

Structural changes such as globalisation, including mergers and alliances, access to world-wide supply chains and labour markets.

Flatter organisational structures, to increase efficiency and a declining average size of business.

An increase in environmental concerns and safety awareness.

The advanced engineering sector has undergone and will continue to undergo extensive structural change and the examples above cover some of the main drivers of change and other elements of change impacting upon the sector. This situation subsequently leads to changes in the demand for occupations and the skills needed to operate within the sector. The next section looks at the trends in occupations.

In terms of trends within the sector previous studies point to continued diversity across the advanced engineering sub-sectors driven by the types of change already discussed. The Engineering Skills Dialogue16 and Case Study Reports17 provide a comprehensive review of the implications of change upon the sector, and a summary of the main findings is given below:

Overall employment levels will continue to go downwards in the engineering manufacturing sector as a whole.

From 1998 through to 2009 there is a net fall forecasted of 315,000 jobs: a drop of 17% (13% to take place by 2004).

The engineering sub-sectors bearing the brunt of this forecast reduction are likely to be in the traditional areas of mechanical engineering and basic metals.

There continues to be, however, strong demand for engineering skills in the UK economy.

Also this forecast reduction in employment levels does not mean that there will be fewer job opportunities in engineering in the future. This is because



the overall age profile of the workforce is relatively old, therefore replacement through retirement will keep up demand.

The total replacement demand forecast outweighs the negative expansion demand thus leading to a positive net requirement overall. It is estimated, therefore, that around 370,000 new job openings will arise over the next decade in the engineering manufacturing sector.

Little overall change is expected in the patterns of engineering employment in terms of employment status. The industry:

will remain predominantly male (70%).

employ mostly full time workers (94%).

have relatively few self-employed (7%).

The trend towards smaller firms, in workforce terms, will continue.

The occupational balance in engineering is expected to continue to shift towards higher-level occupations.

Employment of engineering professionals is forecast to grow by over 2% per annum to 2009.

A 2% annual reduction is forecast in the employment of engineering craft and metal working skilled trades.

The main skill gaps are in specific technical and practical skills areas but personal and generic skills are also in short supply.

3.2 Sector Occupational Trends

EMTA and other organisations and agencies have indicated that different sectors and occupational groups will be differentially affected by structural change within the sector. The Skills Dialogue Report notes that demand in some engineering occupations has been growing faster than others and that the occupational balance in engineering in the future will continue to shift towards higher-level occupations in terms of skills and educational levels. It is expected that the change in demand towards higher-level occupations will be reflected in an increase in engineering professionals over the next decade.

An overall shift towards a balance of employment in professional, technical and skilled occupations will take place. The pressure on companies for shorter design cycles will necessitate the employment of more professional engineers and graduate technicians to service the need for higher levels of technical knowledge and skills. And, while the demand for traditional craft/operators will decrease, there will be a continuing need for skilled craftsmen and women, who might be better described as ‘crafticians’.



Another important factor impacting on occupations within and between the sub-sectors is the difference in terms of occupation patterns between them. A joint EMTA and EEF18 survey of occupational profiles within the sector found marked differences between the sub-sectors. The results of the 1999 survey are shown in Table Twenty below.

Table Twenty: Occupational Profile of Engineering Sub-sectors (percentage of total employed)

Occupation Electronics Aerospace Motor vehicles

Mechanical equipment

Other transport

Metal Products

Basic Metals

Professional engineers 10% 9% 3% 5% 3% 4% 2%

Technician/engineering technicians 9% 11% 3% 7% 12% 5% 4%

Craftsmen/women 9% 23% 17% 21% 41% 25% 23%

Operators and assemblers 34% 32% 46% 30% 12% 31% 40%

Source EMTA/EEF Survey, 1999

Following on from some of the other trends within the sector new occupational forms are emerging within advanced engineering such as Mechatronic Engineering. The advanced engineering sector encompasses a diverse set of technological areas. Mechatronics integrates the classical fields of mechanical engineering, electrical engineering, computer engineering, and information technology to establish basic principles for a contemporary engineering design methodology.

In terms of employment IER19 has forecast an overall downward trend nationally within the sector to 2009. The forecast is a net fall of 315,000 jobs in the sector to 2009, a drop of 17%. Most (13 per cent) of this reduction is predicted to take place until 2004, with a slowing in the rate decline to 2009. The sub-sectors most likely to be affected are in the traditional areas of mechanical engineering and basic metals. However, electrical equipment and electronics sub-sectors are both forecast to rise.

Returning to occupational trends, the IER forecast20 using the Standard Occupational Classifications (SOC 2000) relevant to engineering, the following occupational changes to 2009 are as follows:

Engineering professionals: a rise of 115,000 a +2.1% change (1998 level 449,000 - 2009 projection 564,000).

Science and engineering technicians: a fall of 9,000 a -0.4% change (1998 level 207,000 – 2009 projection 198,000).

Metal forming, welding and related trades: a fall of 46,000 a –2.2% change (1998 level 215,000-2009 projection 169,000).

Metal machining, fitting and instrument making: a fall of 101,000 a –2.2% change (1998 level 463,000-2009 projection 363,000).

Assemblers and routine operatives: a marginal fall of 3,000 with no overall % change (1998 level 597,000-2009 projection 594,000).



Plant and machine operatives: a fall of 63,000 a –1.7% change (1998 level 334,000- 2009 projection 271,000).

It is also important to recognise that even where jobs may be lost in total, in many areas of engineering the total demand forecast outweighs the fall in expansion demand. More detail of the predicted replacement demand forecast to 2009 is given in the following section.

3.3 Sector Replacement Demand

Within sectors in addition to the growth in ‘new’ jobs as well as the loss of ‘old’ jobs, it is necessary to ‘replace’ the skills that will be ‘lost’ as part of the normal process of labour turnover. There is a constant need within sectors to replace existing workers who change jobs or retire. Therefore, even in the advanced engineering sector where it is forecast there are likely to be ‘net job losses’, the replacement demand contributes to an overall net gain in the sector when factoring in replacement demand in occupations.

Overall, in fact, the Skills Dialogue Report forecasts that there will be net gains in recruitment to some occupational groups due to losses through retirement. The report predicts the following net requirements in the sector:

Corporate Managers : 71,000

Science and Technical Professionals : 34,000

Business Associate Professionals : 32,000

Skilled Metal and Electrical Trades : 109,000

Process Plant and Machine Operatives : 58,000

Transport Drivers and Operatives : 34,000

Elementary Clerical and Service Groups : 52,000

This leads to an estimate of around 370,000 new job openings overall within the sector.

3.4 Sector Trends: Qualifications and Training

3.4.1 Education and Qualifications

The advanced engineering sector has been dogged for decades by a poor image. The image of engineering in the UK is a particular problem for the industry. For many people, the word ‘engineer’ brings to mind a man (there is a low percentage of women within the sector) in dirty overalls with a spanner in his hand, with the image of the sector being usually associated with noise,



dirt and heavy work. However, this image hides an increasingly diverse, innovative and sophisticated sector.

The Skills Dialogue Report highlights that a number of studies have stressed the engineering sector as being unattractive to young people, in particular, the poor image of the sector to those choosing a career and also a lack of knowledge about the range of jobs in the sector and engineering/technology matters in general. The limited numbers choosing mathematics and science subjects at school compound this situation. Though the Skills Dialogue Report comment that numbers have been growing, only half of 16 year olds obtain GCSE maths grade C and only around ten per cent of the cohort go on to study maths at A level. Physics as an A level subject fared worse than mathematics, seeing a decline of 13 per cent between 1993 and 1997, though this trend has since levelled.

There is a perception that maths and science A levels are harder and less interesting than other A level subjects, and with the majority of engineering courses at university requiring both subjects at A level, the low levels of those taking these subjects has had a knock-on effect in the sector. There is also a range of alternative career options available to those with maths and science qualifications that compete with the advanced engineering sector. Many of these other career options may seem more attractive in terms of salaries, career prospects and working conditions.21 Consequently, much emphasis is placed by EMTA within their Workforce Development Plan on attracting more people into the industry, including supporting the provision of more vocational GCSEs and trying to ensure increased recruitment of women and young people from ethnic minorities.

EMTA is concerned to see all key organisations redoubling their efforts to improve the image of engineering. This may be particularly important in the case of young women, whose presence on undergraduate courses is still relatively small, in spite of massive efforts through initiatives such as Women in Science and Engineering (WISE). Some commentators, however, consider that rather than there being a problem of image, it may be the occupational structures themselves that do not appeal to numbers of young people.

EMTA, however, points out that work with the GNVQ Part One in Engineering has indicated that the young people who take engineering courses from a relatively early age develop a positive attitude towards engineering. EMTA therefore considers it to be important that schools should be supported in the introduction of Vocational GCSEs. EMTA has set a goal of half the Advanced Modern Apprentices in the future being recruited from among young people who have undertaken a vocational GCSE. It is therefore recommended that training providers, particularly Group Training Associations, Further Education Colleges and employer training associations, should support the schools in providing vocational GCSEs, as it is unlikely that most schools will have sufficient resources in this area. EMTA also intends to work with partners to provide Saturday engineering clubs and other activities and to build other partnership initiatives, particularly through extending Employer Champions



The promotion of Modern Apprenticeships and Graduate Apprenticeships is seen as being a means of widening the basis of recruitment as well as providing appropriate training for specific industry needs. In terms of engineering educational trends within Further Education, a recent report by the Further Education Funding Council22 identified the following trends and issues:

In 1997: 98 7.2 per cent of the 4.4 million FE students were on engineering courses.

Of these, 80 % were studying part-time.

While numbers on engineering courses grew in the first half of the 1990s, there has been a decline of six per cent since 1995/6, although the FE sector overall has grown in terms of student numbers by 14 per cent.

Full-time study has been declining overall in recent years (six per cent), but the rate of decline in engineering has been much steeper (down by 20 per cent).

There are almost 900 engineering related qualifications offered by the FE sector, and 86 per cent of FE colleges offer some engineering provision.

Growth in enrolments at Level One (83 per cent) has been much stronger than at Level Three (five per cent).

GNVQ courses represent very small numbers of enrolments, only about one-sixth of those on BTEC courses.

By 1998/99, a total of 276,000 NVQ awards have been made in the engineering framework area. This comprises 10 per cent of all NVQ awards.

In 1998/99, 46,000 NVQ/SVQ awards in engineering were made compared with 38,000 in 1994/95, an increase of 20 per cent. Over half of these awards in 1998/99 were at Level Two (29,000) and most of the remainder at Level Three (15,000) and 23,000, at Levels One and Two.

In general terms the FE sector forecasts a growth in engineering students.

Higher Education has seen an enormous expansion over the last decade. Undergraduate entrants more than doubled between 1988 and 1998, however, engineering has not shared in this expansion to the same extent as other subjects. The Skills Dialogue Report for the sector highlights that after peaking in 1993, at just over 21,000 acceptances from UK applicants to full-time engineering degree courses, the numbers have started to decline, although the situation has stabilised in recent years.

The numbers of engineering undergraduates in total has decreased by 10 per cent between 1994/95 and 1997/98 while the total number of undergraduates in all subjects has increased by 10 per cent, and the numbers on popular subjects



such as computing have increased by almost 20 per cent. The Higher Education Statistics Agency (HESA)23 Annual Reports showed that in 1998 that of all first degree graduates in the UK, a total of 258,753 for all subjects only 22,574 were engineering and technology graduates, and this figure when broken down further by selected subject groups showed that of these:

3,913 were mechanical engineering graduates

1,014 were electrical engineering graduates

3,853 were electronic engineering graduates.

The main reason for this decline in attracting candidates to engineering courses is generally attributed to the poor image of the sector. However, there is evidence from a number of other studies about the quality of entrants to engineering courses, highlighting the range of other options available to those with maths and science qualifications that compete with the advanced engineering sector. The view about the declining quality of graduates is reinforced in the Skills Dialogue Report for the sector, in that unemployment of engineering graduates (in 1998 it stood at 6.6% for engineering and technology graduates) is slightly higher than the average for graduates from other disciplines (5.7%). The Engineering Council and a large percentage of employers within the sector have expressed a need to improve work experience for undergraduates, and also to newly graduating engineers. They comment that as a consequence of the lack of ‘quality’ work experience provision, some engineering graduates end up in non-engineering occupations. In the Skills Dialogue Report it is noted however, that some efforts are being made to address this issue through Graduate Apprenticeships and transferable training loans.

3.4.2 Appropriate Standards Qualifications and Training Programmes

EMTA is centrally involved in the development of the engineering vocational GCSE, to ensure that it meets the needs of industry and provides appropriate progression into Modern Apprenticeships.

The qualifications framework for engineering NVQs and SVQs, Levels One to Five, will be more occupationally specific than current qualifications. It is hoped that this will encourage more employers and candidates to take them up.

EMTA will support the development of engineering foundation degrees, ensuring that the work based component is well structured with appropriate outputs, for example Key Skills NVQ units.

EMTA aims to secure the network of Group Training Associations and to work to ensure that while there is no loss of provision, all provision is of an appropriate standard.



3.4.3 Developing the Adult Workforce

In order to encourage workforce development EMTA will especially support SMEs in responding to drivers such as the need for new products, the availability of new technologies, new processes and new work organisation structures.

Support will be given through accessing European funding, promoting the IiP standard and helping with immediate training needs.

Other partners will be involved, including the Small Business Service and its franchises, Engineering Trade Associations and Engineering Trades Unions.

EMTA will also work to support the new Modern Skills Diploma for Adults.

Growth in the demand for professional and higher technical skills is seen by EMTA as being supported through foundation degrees and graduate apprenticeships as well as by current provision in Higher and Further Education. Fast changing technology, which was recognised as a driver of training needs by many local firms, may put particular strains upon the resources of SMEs.

3.5 Sector Trends in Skill Requirements

The EMTA Report highlights that in the sector the over riding problem, for all occupations, was a lack of technical and practical skills. However, in line with other studies this was more evident in professional, technical, craft and operative jobs. The Report also outlines other skills, which are in short supply:

Communication, problem solving and management skills for managers.

Advanced IT and software skills for technician jobs.

Basic literacy and communication skills for clerical work and communication, customer handling, basic literacy and management skills for sales staff.

Team leadership skills including communication and motivational skills, and the ability to think ahead and strategically at an intermediate/technician level.

A combination of technical and non-technical skills, including project management, people management, and a well-rounded commercial awareness at a professional level.

Leadership and the ability to ‘drive the business forward’ and ‘transform business systems for competitive advantage’ at a senior management level.



In addition to the groups of needs and training elements outlined by EMTA, the Skills Dialogue Report reiterates and adds to these issues and places them in the context of skills trends:

There is an overall trend towards jobs becoming more demanding and towards skill intensification. However, it is still important to recognise some areas of continuity. Toolmakers and welders, for example, still need many of the skills they have always needed to operate effectively.

Although there has been an overall decline in the demand for craft employees, craft skills are still very important in a number of engineering sub-sectors.

Many recruits did not have sufficient underpinning knowledge, largely because this element had been removed from training courses. For example, a lack of understanding of how different materials react in different conditions.

An increasing level of computer literacy is required for most engineering occupations, although the level of ICT skills required varies for occupations.

Multi-skilling and greater flexibility is increasingly required, again the degree to which the required level of multi-skilling and flexibility varies.

An ability to deal with change, for example, adoption of new technologies and working practices is needed.

Employers within the sector are increasingly looking for employees with an ability to continue learning and re-skilling.

Employers are also placing a greater importance on personal and generic skills, for example communication skills, team working, problem solving and diagnosis, and at professional levels, greater abilities for forward thinking and ‘whole system’ thinking.

An ability to understand the business is required, although this again varies at different levels.

An increasing emphasis is being placed on customer service awareness as engineering sectors have become much more customer focussed.

Other emerging issues are the increasing importance of legislation affecting the sector and environmental concerns.

The drivers of change operating within the Advanced Engineering sector are acting together upon the skills requirements of the sector generally. A number of other reports concur with the EMTA and Skills Dialogue Reports and these drivers are impacting on the skills that will be increasingly needed by those operating within the



sector. These drivers are increasingly impacting on those operating within the sector leading to multi-skilling and the need for greater flexibility. The sector is subjected to task-intensive and task-extensive technical change24, requiring an increase in the skills content of specific tasks and requiring workers to multi-task and perform more than one occupational role.

The Employers Skills Survey25 provided some evidence about the skills required by firms seeking to implement new higher quality product areas or improve the quality of their existing operations. In the survey just over 25% of engineering employers reported plans to move to higher quality product areas.

Table Twenty-One lists the new or additional skills that engineering firms considered they most required in order to be able to achieve this adjustment.

Table Twenty-One: New or Additional Skills (%)

Technical and practical skills (non-IT) 71 Team working skills 64 Management skills 56 Problem-solving 54 Customer handling 54 Communication skills 50 Basic computer literacy 43 Advanced IT or software skills 36 Numeracy skills 34 Literacy skills 33 Other 3

Source: ESS1999

3.6 Sector Skills Gaps and Shortages

The Engineering Skills Dialogue and Case Study Reports touch upon the complex and increasingly dynamic relationship between vocational education and job-specific training:

'The available information on recruitment difficulties suggests both a number of common themes, but also diversity across the sector. There is a general theme of there being a lack of suitably skilled and experienced people in the labour market. Although 'generic skills' or Key Skills are reported to be lacking, there is a consistent picture across all occupations of a lack of technical and practical skills. While some studies have started to analyse in greater detail the nature of these skill needs, more information is needed from employers about what skills, of a specific technical nature and for which jobs, are really in short supply. It is in this respect that there is diversity; in the technical and practical skills needed by different occupations and in different sectors. It should be acknowledged, however, that it can be difficult for employers to define precisely what kind of technical skills are likely to be needed two or three years ahead, especially in fast moving electronics and IT areas. That is why it is important to ensure that people have a base of skills and underpinning knowledge so that they can readily retrain to meet the needs of new technological developments.'



The Engineering Case Study Report (2001) picks up on the theme of uncertain change highlighted in the Engineering Employers Federation Report:

'It is evident that change (in the engineering sector) needs to be continuous, and that pace is increasing. In broad terms, it is those establishments and managers that appreciate and can rise to these circumstances that are clearly more likely to succeed; some of the skills deficiencies we have suggested relate to the ability of managers and management fully to appreciate their situation, develop suitable strategies, and successfully implement them. It was also evident that even if managers were able to develop satisfactory strategies likely to sustain the organisation in the long term, it was not always easy to capture and articulate the skills necessary for that policy to be put into effect.'

The Report goes on to state:

'There was clear emphasis on the role of the professional engineer, and how flexible but systematic thinking was essential, but not always available.

At all levels, the skills of team and project working are seen as important, and in general the development of people with a broader understanding of the business (but not at the expense of deep understanding of some of the technicalities or the role of the technician).'

The key management level skill deficiencies identified in the Case Study Report include:

Professional engineers with design, development, project management and manufacturing skills.

Technicians and technical skills.

People management and co-ordination skills.

Commercial awareness.

Real-time application software development capabilities.

IT systems development and internet application skills.

The main shop floor skill gaps reflect the trend away from traditional 'blue collar' work towards the inclusion of the additional 'soft skills' needed in a knowledge management society. They include:

Team leader and motivation skills.

Administrative, communication and manufacturing data handling skills.

Skills in setting and achieving productivity targets and improvements.



Forward thinking and planning skills.

The overall conclusion of the Report is that 'while operational skills are clearly of considerable importance in the success of this sector, structural management competencies have a critical influence as do product life-cycle design skills and technical innovation capabilities.'

Skills Shortages

Traditionally, the main area of recruitment difficulty and skill shortage problems in the sector has been in the craft and skilled trades. The Skills Dialogue Report notes that this has been a recurrent theme in the literature over many decades. The causes of these shortages have been attributed to a combination of many events, including employer decisions to cut back on training in periods of recession; the demise of traditional craft apprenticeships; the closure of large company off-the-job training centres and the loss to other sectors of many skilled craft workers in times of recession who never return to the sector. There have also been cyclical shortages highlighted in the professional and technical occupations, especially in some of the sub-sectors (for example, electronics and software engineers). In recent times there have also been shortages reported at the associate professional level, for example, technical engineers. Another area of concern is the lack of generic skills of managers within the sector.

In 1999 the National Employers’ Skills Survey (ESS) found that in terms of skills shortages measured by hard to fill vacancies within the sector found that there were shortages in recruiting to the following occupations:

Craft: 65% per cent of vacancies were hard to fill.

Professional: 53%.

Technician/scientific: 49%.

Managers 43%.

The results of the EES survey generally reflect the findings of EMTA surveys, where the majority of hard to fill vacancies were in technician, craft and professional occupations. Table Twenty-Two shows more detailed results from the EES survey in terms of employment, vacancies, hard to fill vacancies and skill shortages by occupation for the sector.

Table Twenty-Two: Skills Shortages for the Engineering Sector Employment Vacancies Hard to fill

vacancies Skill

Shortages Manager and administrative 13 5 5 4

Professional 11 10 11 14

Technical and Scientific 7 7 8 10

Clerical and secretarial 9 7 4 3

Craft and skilled operative 24 25 35 40



Sales 4 7 6 6

Operative and assembly 27 35 28 21

Other manual 7 4 3 2

Total Numbers 1,434,571 25,350 11,727 6,726

Source: Table adapted from ESS, (1999)

The report also looked in more detail at skills, which are hard to find in different occupations, and these were:

Lack of technical and practical skills, in almost all occupations, especially in the professional, technical, craft and operative occupations.

Lack of advanced IT and software skills amongst technicians, and also managers and professionals.

Lack of basic computer literacy amongst clerical and sales jobs.

Deficiencies in communication skills, among managers, but also for clerical and sales applicants as well as customer handling, numeracy and problem solving skills.

Shortage of managerial skills amongst applicants to managerial jobs.

Skills Gaps

In a survey conducted by EMTA in 1999, 26% of employers reported the existence of skills gaps between the skills of their current workforce and those needed to meet their objectives. More detailed results from the survey and for the sub-sectors are shown in Table Twenty-Three below.



Table Twenty-Three: Percentage of Employers Reporting Skills Gaps and Areas of Skill Deficiency

Skill Gap % Metal Products

Mechanical Engineering Electronics Electrical

Engineering Motor

Vehicles Aerospace

Practical skills 68 63 53 55 67 54

Multi-skilling 41 - - - 44 -

Skilled craftspeople 40 26 - 29 - 35

Computer literacy 30 41 39 42 41 38

Communication skills 24 34 34 39 41 29

Personal skills 23 25 32 32 41 -

Management skills - 29 33 35 - 32

Problem solving - 25 27 - 42 38

Source: Table adapted from EMTA (1998)

The Skills Dialogue Report outlined the most commonly reported causes of skill deficiencies within the workforce, and these were:

A failure to train and develop staff.

The introduction of new products or services, new working practices and new technologies.

Recruitment problems, poor labour retention, inability of workforce to keep up with change, and inability of older staff to acquire necessary knowledge and skills.

The impact of these skills gaps although difficult to identify, are reported to be impacting in many ways:

Difficulties in meeting customer service objectives, and this was caused by deficiencies in all occupations.

Increased operating costs and delays in developing new services. Deficiencies amongst operatives were most frequently reported to be leading to increased operating costs.

Loss of business or orders to competitors, with deficiencies in most occupations.

Difficulties in meeting quality standards.

Other Recruitment Difficulties

The Skills Dialogue Report comments that while the supply of qualified people in engineering has been growing over the last decade, few have been attracted to the engineering sector. This includes attracting people of sufficient quality onto Modern



Apprenticeships. The main reasons that have been reported for the failure to attract young people into the sector and other recruitment difficulties include:

Failure to attract enough young people of the right quality (to study engineering), partly because of the sector’s poor image.

Declining interest in taking maths and physics at A level.

Attraction of alternative courses (for example, IT).

Continuing low take up by women of engineering courses.

More encouragement for young people to stay on at school than to follow vocational routes which involve workplace training.

Engineering is criticised for not developing personal and transferable skills or utilising and developing skills among graduate recruits, who as a result move away to other types of jobs.

Low level of work placements for under-graduates and graduates.

Generally, there is a low level of in-company training within the sector.



4. Sources and References

Beer, J, Ingram, P & Bryant, L. (2000). Fast Track Training for ICT Technicians. Social Research & Regeneration Unit: University of Plymouth.

Beer, J, Ingram, P & Bryant, L. (2001). Marine South West and the South West RDA Research Exercise to Maximise the Competitive Position of the Marine Sector through the Development of Centres of Expertise in the South West Region. Final Report , Social Research & Regeneration Unit: University of Plymouth, Plymouth.

Beer, J, Ingram, P & Bryant, L. (2001). ‘Hunting Gazelles’: The ‘SME Growth and Competitiveness’ Project. Social Research & Regeneration Unit: University of Plymouth, Plymouth.

Blake, N, Dods, J & Griffiths, S. (2000). Employers Skill Survey 1999: Existing Survey Evidence and its use in the Analysis of Skill Deficiencies. Business Strategies, London.

Bosworth, D, Davies, R & Wilson, R. (2001). Skills and Performance: An Econometric Analysis of Employers Skill Survey 1999. Institute of Employment Research, University of Warwick, Warwick.

Bosworth, D, et al. (2000). Employers Skills Survey 1999: Statistical Report. Institute of Employment Research, University of Warwick, Warwick.

Campbell, M, et al. (2001). Skills in England: 2001. Policy Research Institute, Leeds Metropolitan University, Leeds.

Connor, H, Dench, S & Bates P. (2001). Skills Dialogue: A Comprehensive Summary from Employers of Skills Requirements in Engineering. The Institute for Employment Studies, Brighton.

Davis, C, et al. (2001). Employers Skill Survey Case Study: Engineering. Institute of Employment Research, University of Warwick, Warwick.

Department for Trade and Industry, (1998). Our Competitive Future: Building the Knowledge Driven Economy. White Paper, DTI, London.

Department for Trade and Industry, (2001). Enterprise, Skills and Innovation. White Paper. DTI, London.

Devon and Cornwall Learning and Skills Council. (2001). Draft Strategic Plan 2002/05, LSC, Plymouth.

DTZ Pieda Consulting. (2000). Research on Current and Emergent Industrial Sectors and the Implications for Skills and Business Development. SWRDA, Exeter.

DTZ Pieda Consulting. (2000). SWRDA Priority Sectors Working Paper 7: Information and Communications Technology. SWRDA, Exeter.

DTZ Pieda Consulting. (2000). SWRDA Priority Sectors Working Paper 3: Advanced Engineering. SWRDA, Exeter.



DTZ Pieda Consulting. (2000). SWRDA Priority Sectors Working Paper 9: Marine Technologies, SWRDA, Exeter.

Elias, P Kinshott,G & McKnight, A. (1999). National Skills Task Force Research Paper 24, SOC 2000: Redefining Skill Revision of the Standard Occupational Classification. DfEE, London.

Employers Engineering Federation. (2001). Manufacturing at the Crossroads: Neglect or Nurture. EEF, London.

EMTA. (2001). Sector Workforce Development Plan for Engineering Manufacture: 2001-2005. EMTA, Watford.

Government Office for the South West, (2000). Objective 3: South West Regional Development Plan 2000-2006.

Green, A & Owen, D. (2001). Employers Skill Survey: Skills, Local Areas and Unemployment. Institute of Employment Research, University of Warwick, Warwick.

Haskel, J & Holt, R. (1999). National Skills Task Force Research Paper 6, Anticipating Future Skill Needs: Can it be Done? Does it Need to be Done? DfEE. London.

H M Treasury. (2000). Productivity in the UK: The Evidence and the Government’s Approach. H M Treasury, London.

H M Treasury. (2001). Productivity in the UK: The Regional Dimension. H M Treasury, London.

Hogarth, T & Wilson, R. (2001). Skills Matter: A Synthesis of Research on the Extent, Causes and Implications of Skill Deficiencies. Institute of Employment Research, University of Warwick, Warwick.

Hogarth, T, et al. (2001). Employers Skill Survey 2001: Statistical Report. Institute of Employment Research, University of Warwick, Warwick.

Humphries, C. (1998). National Skills Task Force First Report, Towards a National Skills Agenda. DfEE, London.

Humphries, C. (1999). National Skills Task Force Second Report, Delivering Skills for All. DfEE, London.

Humphries, C. (2000). National Skills Task Force Third Report, Tackling the Adult Skills Gap: Upskilling adults and the role of work place learning. DfEE, London.

Humphries, C. (2000). National Skills Task Force Final Report, Skills for all: Proposals for a National Skills Agenda. DfEE, London.

Humphries, C. (2000). National Skills Task Force Research Paper, DfEE, London.

Investors in People. (2000). The Investors in People Standard. IiP, London.

Johnson, S. (1999). National Skills Task Force Research Paper 18, Skills Issues for Small and Medium Sized Enterprises. DfEE, London.

Keep, E. (1999). National Skills Task Force Research Paper 20, Employer Attitudes Towards Adult Training. DfEE, London.



Learning and Skills Council. (2001). Strategic Framework to 2004: Corporate Plan. Learning and Skills Council, Coventry.

Lloyd, C. & Steedman, H. (1999). National Skills Task Force Research Paper 9, Intermediate Level Skills: How are they changing? DfEE, London.

Mason, G. (1999). National Skills Task Force Research Paper 12, Engineering Skills Formation in Britain: Cyclical and Structural Issues. DfES, London.

Penn, R. (1999). National Skills Task Force Research Paper 7, The Dynamics of Decision-making in the Sphere of Skills’ Formation. DfEE, London.

Plymouth City Council. (2001). An Economic Strategy for the Plymouth Sub-Region: 2001-2004. Plymouth City Council, Plymouth.

Plymouth City Council. (1999). Competitiveness Issues for the Electrical, Electronic and Precision Engineering Sector in Plymouth. Internal Committee Report, Plymouth City Council, Plymouth.

Plymouth Learning Partnership. (2001). Strategic Workforce Development Plan 2001-2010: Plymouth Travel-To-Work Area. Plymouth.

South West of England Regional Development Agency. (2000). Regional Strategy for the South West of England: 2000-2010. SWRDA, Exeter.

Stevens, A. (2000). National Skills Task Force Information Technology, Communications and Electronics Skills Strategy Group Final Report, Skills for the Information Age. DfEE, London.

Trends Business Research. (2001). Business Clusters in the UK: A First Assessment: Volumes 1,2 & 3. DTI, London.

Wilson, R. (2000). National Skills Task Force Background Report, Projections of Occupations and Qualifications 1999-2000. DfEE, Sheffield.

Wilson, R. (2001). Projections of Occupations and Qualifications 2000-2001, Vol 1 UK Results & Vol 2 Regional Results. DfEE, Sheffield.



Acknowledgements

The authors of Plymouth Travel-To-Work Area Sectoral Workforce Development Programme Medium- to Long-Term Skills Needs : Key Sector: Advanced Engineering would like to thank the following people for their assistance and co-operation in the compilation of this report.

Dr Murray Bell, Department of Mechanical & Marine Engineering, Faculty of Technology, University of Plymouth.

Martin Bibey, Engineering Employers Federation (Western). Education and Training Adviser based in Bristol.

Dr Steve Childe, School of Computing, Faculty of Technology, University of Plymouth.

Professor Des Mapps, Department of Communications & Electronic Engineering, Faculty of Technology, University of Plymouth.

Peter Smith, Dockyard Works Committee Secretary, DML, Devonport.

Pete Stacey, Centre Manager, Plymouth Engineering Group Training Scheme (PEGTS).

John Tregaskes, New Technology and Innovation Team, Prosper Plymouth.

Dr Peter White, Department of Communications & Electronic Engineering, Faculty of Technology, University of Plymouth.

1 Learning & Skills Council Strategic Framework, p. 4. 2 Plymouth Learning Partnership, 2001, pp. 18-20. 3 DTZ Pieda Consulting (2000). SWRDA Priority Working Paper 3, p. 2. 4 Green, A. & Wilson, Rob. (2001). Economic and Labour Market Prospects for Devon and Cornwall, 1998-

2009. Final Report. Institute of Employment Research, University of Warwick. 5 Green, A. & Wilson, R. (2001). Economic and Labour Market Prospects for Devon and Cornwall, 1998-2009.

Final Report. Institute of Employment Research, University of Warwick. 6 Green, A. & Wilson, Rob. (2001). Economic and Labour Market Prospects for Devon and Cornwall, 1998-

2009. Final Report. Institute of Employment Research, University of Warwick. 7 Green, A. & Wilson, Rob. (2001). Economic and Labour Market Prospects for Devon and Cornwall, 1998-

2009. Final Report. Institute of Employment Research, University of Warwick.



8 Wilson, R.A. (2000). Projections of Occupations and Qualifications. Institute for Employment Research,

University of Warwick. 9 Bostock Marketing Group Ltd (2001). Devon and Cornwall Learning &Skills Council: Employers Survey

2001. 10 cited in Connor, H., Dench, S. & Bates, P. (2001). Skills Dialogue: A Comprehensive Summary from

Employers of Skills Requirements in Engineering. The Institute for Employment Studies, Brighton. 11 Connor, H., Dench, S. & Bates, P. (2001). Skills Dialogue: A Comprehensive Summary from Employers of

Skills Requirements in Engineering. The Institute for Employment Studies, Brighton. 12 Wilson, R.A. (2000). Projections of Occupations and Qualifications. Institute for Employment Research,

University of Warwick. 13 Employers Engineering Federation. (2001). Manufacturing at the Crossroads: Neglect or Nurture. EEF,

London. 14 For example, Campbell, M. et al. (2001). Skills in England. Policy Research Institute, Leeds Metropolitan

University, Leeds. 15 EMTA. (2001). Sector Workforce Development Plan for Engineering Manufacture: 2001-2205. EMTA,

Watford. 16 Connor, H. Dench, S. & Bates, P. (2001). Skills Dialogue: A Comprehensive Summary from Employers of

Skills Requirements in Engineering. The Institute for Employment Studies, Brighton. 17 Davis, C., Buckley, T., Hogarth, T. & Shcakleton, R. (2001). Employers Skills Survey Case Study:

Engineering. Institute of Employment Research, University of Warwick, Warwick. et al. 18 EMTA/EEF (1999). The 1999 Peoples Skills Scoreboard for Engineering. Company Reporting Limited,

Edinburgh. 19 cited in Wilson, R. (2001). Projections of Occupations and Qualifications, 1999/2000. DfEE/Institute of

Employment Research, University of Warwick. 20 cited in Connor H., Dench, S. & Bates, P. (2001). Skills Dialogue: A Comprehensive Summary from

Employers of Skills Requirements in Engineering. The Institute for Employment Studies, Brighton. 21 ITCE Skills Strategy Group. (1999). Skill needs of the electronics sector. First report of the Information

Technology, Communications and Electronics Skills Strategy Group, National Skills Task Force. 22 Further Education Funding Council. (2000). Engineering Programme Review. FEFC, Coventry. 23 Higher Education Statistics Agency. (1999). First Destinations of Students leaving Higher Education

Institutions, 1997/98. HESA, Cheltenham. 24 Haskell, J. & Holt, R. (1999) National Skills Task Force Research Paper 6, Anticipating Future Skill Needs:

Can it be Done? Does it Need to be Done? DfEE, London.; 25 Blake, N., Dods, J. & Griffiths, S. (2000). Employers Skill Survey 1999: Existing Survey Evidence and its

use in the Analysis of Skill Deficiencies. Business Strategies, London.


Documents

SRRU PROGRESS REPORT - Serio Travel-To-Work Sectoral... · represented in the Puttick Grid. Project management, research and development, product or service design and craft production