Manufacturing industry must focus on retainment and recruitment strategies

Commenting on the latest ONS employment statistics for manufacturing, Mike Thornton, national head of manufacturing at RSM UK, said: ‘As total manufacturing employment numbers for Q1 2023 fell to 2.75m – 10% lower than pre-pandemic levels, we need to question whether or not we’re facing permanent shrinkage in the sector. This could be a real positive and a reflection of improved productivity which would be particularly welcome given our historically low benchmark on the global map. 

‘From a sector perspective, we’re pleased to see a marked increase in earnings in the quarter, over 9% year on year, which shows that manufacturers are catching up with other sectors and focusing on retaining their existing, skilled workforce to consolidate productivity gains. But, when sector growth comes, are manufacturers equipped to respond to growing demand without the additional 250,000 workers who were in the sector in 2019?’ 

He added: ‘Over the last year, manufacturers have faced squeezed margins as a result of soaring energy and input costs. However, now input prices appear to be stabilising, confidence is returning in the sector and there is more opportunity for manufacturers to start building back margins and to invest in both their workforce and productivity.’ 

Steve Sweetlove, pay and people partner at RSM UK, said: ‘The manufacturing earnings statistics reveal encouraging signs of growth – businesses have focused on retaining their staff and preventing workers from leaving the industry altogether. Addressing wage issues will help staff retention, but an uncertain economic climate and the cost-of living crisis will also play a part by discouraging people from moving jobs.

However, there does need to be a balance between retention and recruitment to future-proof the manufacturing workforce. As the sector prepares for an uptick in demand over the coming months, and the government looking to cut net migration, manufacturers need to consider the full employment picture and find a way to meet the needs of experienced and knowledgeable workers, as well as attracting the next generation.'