Boosting workforce skills is top priority for manufacturers

Nick Harrison

Boosting workforce skills should be a top priority for manufacturers with operations in the Midlands to remain globally competitive, according to a new report from KPMG.

Almost two-thirds (58%) of manufacturing businesses with operations in the Midlands surveyed by the professional services firm felt the need for a better educated workforce was the number one driver required to improve productivity within their organisations.

KPMG’s “Rethink Manufacturing” report comes as the industry faces a number of challenges driven by technological innovation, evolving customer behaviour, regulatory changes and a turbulent global landscape.

A more supportive government policy came a close second, as over half of respondents with manufacturing operations in the Midlands agree that this would allow them to increase investment in new technologies, including artificial intelligence, advanced robotics and augmented reality.

Nick Harrison, partner and supply chains & operations lead at KPMG in the Midlands, said: “Our report finds the majority of manufacturing executives with operations in the Midlands view boosting workforce skills and quality education as the key priorities for the manufacturing sector’s continuing growth. If the skills challenge in the Midlands is not effectively addressed, manufacturing and associated industries are at risk of decline. Manufacturers can take action now by investing in training, education and continuous development to raise the region’s productivity and prosperity for the future.

“Similarly, respondents highlighted the desire for UK government support to help them boost investment in R&D and digitilisation. The government shares this appetite, as highlighted in its recent industrial strategy. Through such support, the UK has an opportunity to position itself as a globally attractive and competitive base for advanced manufacturing”.

The survey also found following the UK’s decision to leave the EU, almost a third of manufacturers with operations in the Midlands (32%) would consider relocating some of their operations out of the UK, while almost two-thirds (57%) had no plans to move.

Karen Briggs, head of Brexit at KPMG, said: “When our survey was carried out in January, two thirds of respondents with operations in the Midlands expected uncertainty around Brexit. However Britain’s makers are an especially resolute group. Although some are concerned about exchange rates, labour pressures and higher indirect taxation, they are also taking a range of practical measures to prepare. These include partial relocation, supply chain management, increased business development, and new sources of financing. UK manufacturers realise that Brexit will demand a burst of innovation from both the private and public sectors if the UK is really going to reach new global markets and deliver on its potential”.

Harrison added: “Whilst support from government will certainly provide a helping hand, it cannot work alone. Industry must also step up and improve its own productivity through recruiting new skills and preparing for the integration of technology. If these challenges are not effectively addressed, manufacturing and associated industries are at risk of decline.

“Collaboration between sectors, as well as between industry, government and the education sector, is critical to capture the great opportunities that manufacturers recognise exist”.