Only one in seven companies surveyed by Pinsent Masons, the law firm behind Out-Law.com, named investing in skills and training as their number one strategic priority, behind introducing new and innovative products (25%); and increasing sales (18%). This is despite growing awareness of a shortage of skilled employees, driven in part by a lack of interest in STEM subjects amongst young people and the slow progress in advancing apprenticeships.
The report makes seven recommendations for the automotive industry as a whole, and for individual companies, aimed at helping them to "navigate" the skills gap. The recommendations, based on interviews with manufacturing businesses and a survey of young people currently at school or university, include a focus on diversity and inclusion in recruitment and retention, and a collaborative, data-driven approach to identifying the areas in which action is most urgently needed.
"The automotive sector faces a period of unprecedented change. Technology is transforming manufacturing processes and accelerating product innovation. Electric cars, autonomous vehicles and an increasing use of artificial intelligence (AI) are all on the horizon," said Neil Black, an expert on employment law for manufacturing businesses at Pinsent Masons, the law firm behind Out-Law.com.
"While the research does not mean that companies are not investing in skills and training, it does suggest that there may sometimes be a propensity to prioritise investment decisions. This might lead to short- and medium-term commercial gains above the longer-term investment needed to meet the challenges of the skills gap," he said.
"The need for the sector as a whole to collaborate, properly assess and understand the skills gap and then act together to lobby government and tackle the issue through collective and individual business action also emerges from our research. This could include industry-wide competency frameworks to better focus investment in skills and transferability of skills within the UK automotive labour market," he said.
Automotive businesses generally feel as well prepared as possible, or adequately prepared, for the introduction or growth in the use of advanced manufacturing technologies (93%), electric vehicles (92%) and AI and automation (84%), according to the report. However, only 72% of companies feel prepared for autonomous vehicles, while only 24% feel as well prepared as possible for electric vehicles.
The research also found significant concerns among businesses about the UK's planned exit from the EU in March 2019, which they expect to exacerbate the skills shortage. While one third of companies feel as well prepared as possible for Brexit and nearly half feel adequately prepared, 49% of companies are expecting to have greater difficulties attracting staff for production roles, and 53% are expecting it to be more difficult to access individuals with the right technical skills.
While only 13% of respondent companies said that they felt unprepared for a national shortage of STEM skills, the survey of young people underlined the scale of the problem. Only 19% of students said that a STEM subject was a favourite, with 39% instead favouring arts and humanities; while only 12% of students said that they preferred hands-on learning and only 9% were interested in apprenticeships as opposed to university or other further education.
The young respondents said that they were attracted to employers with a clear social responsibility agenda, such as those that demonstrate their environmental credentials or that take part in outreach work to promote career opportunities and support diversity and inclusion. A large majority of surveyed students said that initiatives to support black, Asian and minority ethnic (BAME) employees, or greater diversity in leadership roles, would influence their decision as to where to work, finding favour with 88% and 87% of respondents respectively.
Diversity and inclusion expert Rob Childe of Pinsent Masons said that meaningful engagement around diversity and inclusion could be a "quick win" for businesses seeking to win the war on talent.
"Most automotive companies have these policies on their agenda," he said. "While many are carrying them out today, a significant number are planning to introduce these in the next two years."
"Overall the automotive industry is tuned into an important agenda which resonates positively with a socially-conscious generation. As D&I activity ramps up over the next two years or so, businesses should experience positive impacts from both a business and talent perspective. However, words must be backed up by actions. Young people will spot inauthenticity and any company only paying lip service to its social and environmental commitments will soon be 'found out'," he said.
Download The future of the automotive sector: navigating the skills gap report