Client The Department for Employment and Learning (DEL) Project Research into Advanced Manufacturing and Engineering Services Skill Needs

Transcription

1 Client The Department for Employment and Learning (DEL) Project Research into Advanced Manufacturing and Engineering Services Skill Needs Final Report - December 2013

2 Table of Contents 1 EXECUTIVE SUMMARY INTRODUCTION BACKGROUND TERMS OF REFERENCE METHODOLOGY FINDINGS ACTION PLAN BACKGROUND INTRODUCTION BACKGROUND TERMS OF REFERENCE METHODOLOGY STRUCTURE OF THIS REPORT POLICY CONTEXT AND DRIVERS FOR CHANGE INTRODUCTION GOVERNMENT POLICIES DRIVERS OF CHANGE ACROSS THE SECTOR SUMMARY LITERATURE REVIEW INTRODUCTION SECTOR SKILLS INSIGHTS: ADVANCED MANUFACTURING, UKCES (2012) THE LABOUR MARKET VALUE OF STEM QUALIFICATIONS AND OCCUPATIONS, INSTITUTE OF EDUCATION / ROYAL ACADEMY OF ENGINEERING (2011) EMPLOYER INVESTMENT IN APPRENTICESHIPS AND WORKPLACE LEARNING: THE FIFTH NET BENEFITS OF TRAINING TO EMPLOYERS STUDY, BIS (2012) SCIENCE, ENGINEERING AND TECHNOLOGY TECHNICIANS IN THE UK ECONOMY, GATSBY TRUST (2012) JOBS AND GROWTH: THE IMPORTANCE OF ENGINEERING SKILLS TO THE UK ECONOMY, ROYAL ACADEMY OF ENGINEERING (2012) THE SUPPLY AND DEMAND FOR HIGH LEVEL STEM SKILLS, UKCES (2011) MANUFACTURING IN THE UK: AN ECONOMIC ANALYSIS OF THE SECTOR, BIS (2010) EMPLOYER OWNERSHIP OF SKILLS: BUILDING THE MOMENTUM, UKCES (2013) LOW SKILLS EQUILIBRIUM AND THE IMPORTANCE OF INNOVATION, UNIVERSITY OF WARWICK (2008) BARRIERS TO INVESTING IN TRAINING UK COMMISSION S EMPLOYER SKILLS SURVEY 2011, UK RESULTS (2012) IMPORTANCE OF GENERATION Y TO ADVANCED MANUFACTURING, DELOITTE REPORT (2004) SUMMARY OF LITERATURE REVIEW DEFINITION OF THE SECTORAL FOOTPRINT AND SIZE OF THE ADVANCED MANUFACTURING AND ENGINEERING SERVICES SECTOR INTRODUCTION RSM McClure Watters is a member of the RSM International network. The RSM International network is a network of independent accounting and consulting firms, each of which practice in their own right. The RSM International network is not itself a separate legal entity in any jurisdiction. Table of Contents

3 5.2 DEFINING THE SECTOR SIZE OF THE SECTOR CONTRIBUTION OF ADVANCED MANUFACTURING AND ENGINEERING SECTOR TO NI ECONOMY GVA AND EMPLOYMENT ADVANCED MANUFACTURING AND ENGINEERING SALES AND EXPORTS 2011/2011 FOR NORTHERN IRELAND GROWTH POTENTIAL BY SUB-SECTOR SUMMARY SURVEY ANALYSIS INTRODUCTION METHODOLOGY PROFILE OF RESPONDENTS FINDINGS ACCESSING SKILLS TRAINING SKILLS GAPS ACTIONS REQUIRED THE CURRENT DEMAND FOR ADVANCED MANUFACTURING AND ENGINEERING RELATED SKILLS INTRODUCTION SKILL PROJECTIONS BASED ON SURVEY FEEDBACK HARD TO FILL VACANCIES PROJECTED DEMAND FOR RESOURCES AND SKILLS: WORKING FUTURES MODEL REPLACEMENT DEMANDS AND NET REQUIREMENT SUMMARY REGIONAL SALARY INFORMATION ACROSS THE ADVANCED MANUFACTURING/ENGINEERING SERVICES FOOTPRINT IN UK AND IRELAND INTRODUCTION SALARY INFORMATION FOR MANUAL AND TECHNICAL EMPLOYEES SALARY INFORMATION FOR MANAGERS AND PROFESSIONAL ENGINEERS GENERAL SALARY LEVELS IN NORTHERN IRELAND SALARY INFORMATION FOR ENGINEERING ROLES IN THE REPUBLIC OF IRELAND NORTHERN IRELAND GRADUATE SALARY INFORMATION SUMMARY THE SUPPLY OF SKILLS INTRODUCTION SECONDARY EDUCATION APPRENTICESHIPS FURTHER EDUCATION (FE) COLLEGES HIGHER EDUCATION (HE) INSTITUTIONS QUALIFICATIONS IN ADVANCED MANUFACTURING AND ENGINEERING UP-SKILLING IN THE ADVANCED MANUFACTURING SECTOR SUMMARY RSM McClure Watters is a member of the RSM International network. The RSM International network is a network of independent accounting and consulting firms, each of which practice in their own right. The RSM International network is not itself a separate legal entity in any jurisdiction. Table of Contents

4 10 ANALYSIS OF SKILLS SUPPLY AND DEMAND INTRODUCTION SUMMARY OF SUPPLY SUMMARY OF DEMAND FACTORS DRIVING DEMAND COMPARISON OF SKILLS SUPPLY VERSUS SKILL DEMAND CONSULTATIONS AND FOCUS GROUPS INTRODUCTION DEL CAREERS SERVICE SECTOR SKILLS COUNCILS FOCUS GROUPS WITH PUPILS AT GCSE AND A LEVEL CAREERS TEACHERS (X4) STEMNET COMPANIES UNIVERSITIES SUMMARY DEVELOPING THE SUPPLY SIDE INTRODUCTION INCREASING THE CAREER ATTRACTIVENESS OF THE SECTOR UPSKILLING THE CURRENT WORKFORCE SUMMARY KEY FINDINGS AND EVIDENCE BASED ACTION PLAN INTRODUCTION DEFINITION OF THE ADVANCED MANUFACTURING AND ENGINEERING SERVICES SECTOR IMPORTANCE TO THE ECONOMY OF THE ADVANCED MANUFACTURING AND ENGINEERING SERVICES SECTOR AND AREAS OF GROWTH POTENTIAL PROJECTED DEMAND FOR EMPLOYMENT SURVEY FINDINGS ON DEMAND ANALYSIS OF SUPPLY SUMMARY OF DEMAND AND SUPPLY SALARY ISSUES CONSULTATION FINDINGS ACTION PLAN Appendices APPENDIX 1: TERMS OF REFERENCE APPENDIX 2: CONULTATIONS APPENDIX 2: SURVEY RESULTS RSM McClure Watters is a member of the RSM International network. The RSM International network is a network of independent accounting and consulting firms, each of which practice in their own right. The RSM International network is not itself a separate legal entity in any jurisdiction. Table of Contents

5 1 EXECUTIVE SUMMARY 1.1 Introduction The Executive Summary sets out the terms of reference, the methodology, the findings and recommendations. 1.2 Background RSM McClure Watters was appointed by the Department for Employment and Learning in April 2013 to complete research into the supply of skills required for advanced manufacturing and engineering sectors, both at present and forecasting the future requirement for these skills. 1.3 Terms of Reference The research objectives were set by DEL as follows: define the sectoral footprint and size of the advanced manufacturing and engineering services sector; highlight the economic and statistical value of the sector and its importance to the Northern Ireland economy; assess the current skills profile of the current workforce (by qualifications) for the sector and highlight the current demand of these skills; analyse regional salary information across the advanced manufacturing/engineering services footprint in UK and Ireland including a review of salary information by skill level, particularly at the level of graduate and post graduate; assess the supply of skills (lower, intermediate and higher levels) for the sector from our schools, Further Education (FE) and Higher Education (HE); determine the future skill requirements for the workforce in the sector in Northern Ireland; highlight any skill imbalances which currently exist or are forecast to exist; identify what actions are needed to ensure that the supply of these skills in Northern Ireland is sufficient for the sector; and Provide an evidence base for the development of an Action Plan for the advanced manufacturing and engineering sector. (Source: Department for Employment and Learning Research into Advanced Manufacturing and Engineering Services Skill Needs Terms of Reference 2013) 1

6 The specific requirements included: Review current research studies and evidence (from SSCs, UKCES, Invest NI, DETI, CBI, Royal Society of Engineering) on the advanced manufacturing and engineering services sector; Develop an economic and statistical model to examine the demand for skills (at lower, intermediate and high level skills) under a range of scenarios, over the short, medium and longer term; Identify the trends and drivers of change which will have the greatest impact on the future skill requirements for the sector; Determine the implications of these trends/drivers of change for the skills requirements for the industry and any associated impact for training provision; Consult with relevant stakeholders within the industry including employers, their representative organisations, schools, FE and HE institutions; Identify examples of best practice (locally, nationally and internationally) in relation to skills training, delivery of research, industry engagement and collaboration. It should be highlighted how this could be tailored to Northern Ireland; and Identify existing advanced manufacturing and engineering services programmes, niches and research competencies in Northern Ireland s Higher and Further Education Institutions. (Source; Department for Employment and Learning Research into Advanced Manufacturing and Engineering Services Skill Needs Terms of Reference 2013) 2

7 1.4 Methodology A seven stage approach was developed to meet the requirements set by the terms of reference. These stages were; Stage 1: Project Planning and Initiation; Stage 2: Secondary Research Desk Research and Literature Review; Stage 3: Consultations and Interviews with Key Stakeholders; Stage 4: Survey; Stage 5: Additional Stakeholder Interviews; Stage 6: Modelling/Forecasting of Future Requirements for Skills and Recommendations; and Stage 7: Reporting and Dissemination of Findings. 1.5 Findings Definition of the Advanced Manufacturing and Engineering Services Sector Throughout the report, the advanced manufacturing and engineering services sector has been defined by the SIC codes listed below which were finalised with the assistance of SEMTA, Colleges NI and MATRIX 1 : 10.0 Manufacture of food products; 11.0 Manufacture of beverages; 12.0 Manufacture of tobacco products; 13.0 Manufacture of textiles; 16.0 Manufacture of wood and of products of wood and cork, except furniture; 18.0 Printing and reproduction of recorded media; 20.0 Manufacture of chemicals and chemical products; 21.0 Manufacture of basic pharmaceutical products and pharmaceutical preparations; 22.0 Manufacture of rubber and plastic products; 23.0 Manufacture of other non-metallic mineral products; 24.0 Manufacture of basic metals; 1 The use of Standard Industrial Classification (SIC 2007) codes are necessary to adequately assess the footprint of the advanced manufacturing and engineering sector. However, limitations do exist from using SIC codes as key contributing sectors to the Northern Ireland economy such as aerospace are categorised as 30.0 Manufacture of other transport equipment. This has made it difficult to access specific data related to these sectors which leads to their importance being under-valued 3

8 25.0 Manufacture of fabricated metal products, except machinery and equipment; 26.0 Manufacture of computer, electronic and optical products; 27.0 Manufacture of electrical equipment; 28.0 Manufacture of machinery and equipment n.e.c.; 29.0 Manufacture of motor vehicles, trailers and semi-trailers; 30.0 Manufacture of other transport equipment; 35.0 Electricity, gas, steam and air conditioning supply; 36.0 Water collection, treatment and supply; 37.0 Sewerage; 38.0 Waste collection, treatment and disposal activities; materials recovered; and 39.0 Remediation activities and other waste management services Importance to the economy of the Advanced Manufacturing and Engineering Services sector and Areas of Growth Potential The advanced manufacturing and engineering sector currently employs approximately 79,580 people in Northern Ireland. It makes a significant contribution to export levels and research/development in Northern Ireland, both of which are central to wealth generation. Evidence from DETI s Manufacturing Sales and Export survey 2 highlights the importance of the sector to the Northern Ireland economy. The survey shows that the total sales from manufacturing companies in Northern Ireland in 2011/12 were billion which represented a 6.5% increase from the previous year. Exports from the advanced manufacturing and engineering sector totaled approximately 4.2 billion which represented a 7.7% increase from 2010/2011. Forecasts show that the sector is expected to marginally contract up to 2020 with 78,624 jobs forecast (down from 79,580 in 2013). Although some subsectors will contract over this period, there are also areas within the sector that are expected to grow substantially over the next few years including aerospace, agri-food and sustainable energy. The other sub-sectors expected to contribute to the growth of the advanced manufacturing and engineering sector include manufacture of electrical equipment (SIC code 27.0), water, sewerage and waste management (SIC codes 36.0, 37.0 and 38.0) and manufacture of machinery and equipment n.e.c. (SIC code 28.0). However, there are pressures on the advanced manufacturing and engineering sector to contract as result of, for example, an increasing emphasis on low cost 2 Northern Ireland Manufacturing Sales & Exports Survey 2011/12, DETI (2012) 4

9 production in overseas sites from global companies. Northern Ireland cannot compete with the labour rates in the Far East and the only way to be competitive is by adding value such as producing customised products and adding on services and/or developing new products. Managers within the sector need to be able to plan strategically and be able to take advantage of business opportunities as they develop. It is also critical that those managers faced with ensuring they have a strategy in place which will ensure the long term survival and growth of their companies, have access to information and market intelligence on where the long term opportunities lie for the sector within which they operate. ICT is now playing a greater role in manufacturing due to the need to share information with customers and suppliers in the most efficient and secure way. This impacts on the skills required as engineers need to have ICT capabilities. Changes in consumer demand are also impacting on the demand for skilled employees. For example, the aerospace sector is expected to grow over the next few years due to increased demand for air travel. Northern Ireland s aerospace sector is well placed to take advantage of this global opportunity and will increase the demand for highly skilled employees. The growing demand for sustainable energy and environmentally-friendly products and processes will also affect the skill requirements of the advanced manufacturing and engineering workforce. Another driver of demand is government policy. An example of this is the potential implementation of a lower corporation tax by 2020 which will stimulate foreign direct investment in high skilled sectors such as advanced manufacturing and engineering. This will promote faster economic growth as well as leading to higher demand for people with higher education qualifications. This is also likely to lead to a decline in the proportion of those in employment with low or no qualifications Projected demand for employment The Working Futures 3 model projects 3,000 net additional jobs approximately per annum for Northern Ireland over the next 7 years for all industries that 3 Working Futures is fourth in a series of labour market assessments completed by the Institute for Employment Research and Cambridge econometrics, that provide detailed projections for the UK labour market. It focuses on a ten year horizon, giving a picture of the labour market for 2020; including employment prospects for industries, occupations, qualification levels, gender and employment status for the UK and for nations and English regions. Working Futures concentrates primarily on a quantitative, economic based approach. This focuses on sectoral and occupational employment structures, 5

10 use advanced manufacturing and engineering skill sets and 1,300 per annum for industries directly involved in advanced manufacturing and engineering. The net requirement for workers is calculated by working out the total number of additional workers needed due to the expansion or contraction of the sector and added to this then the number needed to replace those leaving the sector. The Working Futures Model projects a decline of 2,410 in the demand for new jobs, based on a projected contraction overall in the sector. However, when replacement demands are factored in, there will be a need for an additional 16,070 people up to Approximately a quarter of these roles (24.5%) are expected to be corporate managers and directors or other managers and proprietors which indicates an increase in the need for more skilled and experienced advanced manufacturing and engineering workers. The net requirement will be particularly high for the following occupations: Corporate managers and directors (3,330); Science, research, engineering and technology professionals (2,400); Science, engineering and technology associate professionals (1,130); Skilled metal, electrical and electronic trades (3,610); Process, plant and machine operatives (2,240); and Transport and mobile machine drivers and operatives (2,480). The sector therefore, whilst playing an important role in the local economy, faces a number of challenges in relation to the attraction, development and retention of skilled resources Survey Findings on Demand The survey of advanced manufacturing and engineering companies highlighted that almost half (47.8%) of respondents had experienced difficulties in filling skilled positions over the last two years. The common themes arising from companies who provided details on the difficulties they had experienced were 4 : Systems design engineers and stress engineers; qualifications, and general workforce trends (including replacement demand). The projections for this report have been developed by the Institute for Employment Research at Warwick University. 4 Note: Only 36 respondents provided details on difficulties they had in filling advanced manufacturing and engineering vacancies. 6

11 CNC programmers/ engineers; R&D Engineers; Production managers/ engineers, Plant Engineers, Project Managers; Manufacturing Systems Engineers ; Electrical technicians; Fitters; Welders; and Skilled fabricators. A number of companies felt that the quality of graduate engineers coming out of university did not meet their needs, given their lack of experience and lack of skills around problem solving; organisational skills and project management. Respondents were asked what actions need to be taken by the government and others to ensure that the skilled resources in Northern Ireland meet the needs of the advanced manufacturing and engineering sector. Of the 53 responses, the majority of responses focused on: Increasing the quality of engineering training at HE and apprenticeship training sites (with more practical training needed); Providing more financial support to make recruitment of apprentices more viable i.e. fund the salaries for apprentices and not just training; Providing more incentives to businesses to run properly funded graduate schemes; Promoting career opportunities in advanced manufacturing and engineering to children and young people at schools. Ensuring that careers teachers understand what opportunities exist in manufacturing; and Promoting the STEM subjects among females and promoting work experience to young people in schools and colleges Analysis of Supply The analysis of the supply of young people into the sector shows mixed results. The number of A-level entries to Mathematics and Design and Technology has increased by 13.7% over the last three years. However the number of entries in STEM related GCSE subjects has decreased 2.5% over the same period. The qualifications being achieved at Secondary Education level shows a difference at A Level and GCSE. Students achieving grades A-C in STEM related A-levels showed a positive trend between 2008/09 to 2010/11 with a 12.3% increase. The number of GCSE entries achieving A-C in STEM related subjects over the 2008/09 to 2010/11 period for Northern Ireland has indicated a 1.5% decline. 7

12 The number of enrolments in Higher Education courses relevant to advanced manufacturing and engineering has remained relatively consistent over the last three years. There were 2,640 graduates 5 in courses relevant to advanced manufacturing and engineering from Higher Education Institutions (HEIs) in Northern Ireland over the last three years equating to an average of 880 people graduating per year. Of the 815 engineering 5 and technology graduates from HEI s in Northern Ireland in 2011/12, over a quarter (25.2%) were civil engineers. 11.7% obtained qualifications in mechanical engineering, 6.1% in chemical engineering and only 3.7% in aerospace engineering. The numbers enrolling in STEM related FE courses have declined by 15.5% over the last three years and now stand at 17,053 enrolments in 2011/12. Data on the number of FE students coming from STEM related courses going into advanced manufacturing and engineering occupations is not available. The 2013 ApprenticeshipsNI figures show there were 996 participants 6 in 2013 for STEM related apprenticeships, which indicates a 12.2% increase in total participants since Summary of Demand and Supply An analysis of current trends in numbers being trained in advanced manufacturing and engineering areas 7, along with responses from the survey 8 indicate that there will be a need for more skilled and experienced employees over the next 7 years. There are sufficient numbers of young people coming through the education/training systems but there is a mismatch between the skills and experience required by employers and what is being produced. Overall, the projected supply of people with STEM related qualifications from Further Education (8,640) 6, Higher Education (880) 9 and Apprenticeships (1,006) 10 is 10,526 per year. The demand for people entering the advanced manufacturing and engineering sector is projected at 3,000 per year. We can therefore state 5 Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Educaiton Institutions: Northern Ireland Analysis 2009/ /12 6 Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2012/13 7 See Section 5 8 See Section 6 9 Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2009/ /12 10 Average number of ApprenticeshipsNI participants per year since

13 that the overall projected demand for advanced manufacturing and engineering occupations in the next 7 years is not likely to exceed the overall supply of people obtaining qualifications relevant to the sector. Over a quarter (28.5%) of those gaining STEM related qualifications will be required to enter employment in the advanced manufacturing and engineering sector to meet the demand projected by the Working Futures Model. The skills mismatch relates to insufficient numbers of people coming through with professional, associate professional, skilled trades and managerial skills Consultation Findings Consultations were held with Invest NI, DEL Careers Service, the Sector Skills Councils, STEMNET and the Universities Attractiveness of the Sector The meetings with DEL Careers Service, the Sector Skills Councils and STEMNET 11 highlight that a lot of work has been delivered to promote the sector to young people in schools. DEL has over Careers Advisers across Northern Ireland who visit schools and ensure all 14 year olds have at least one session with a Careers Adviser. The Careers Advisers also provide advice and guidance to the schools Careers Teachers and promote practical support including web sites containing useful links and data on careers. The DEL Careers Service provided the opportunity for staff to spend a week in a company work placement over the summer 2013, in order to build awareness of other roles and to build networks with private employers. SEMTA highlighted that work is needed to ensure that careers teachers are providing pupils and their parents with information on the opportunities within apprenticeships as well as degree and other courses. Both SEMTA and Energy and Utility (EU) Skills felt that there is insufficient information available to set out the different career paths for young people. EU Skills are working closely with SEMTA on GreenSTEM which will be a new online platform of integrated career tools, specifically for Energy and Utility Skills industries. Both Sector Skills Councils feel that many parents/careers 11 The Science, Technology, Engineering, Mathematics Network (STEMNET) 12 Approximately 118 (Source: Careers Service Northern Ireland, Department for Employment and Learning) 9

14 teachers are confused or unaware of the opportunities that exist for apprenticeships and are unaware where to access this information. SEMTA questioned whether careers teachers are the best point of information dissemination for pupils and parents and suggested the use of subject knowledge experts such as the STEM teachers. They also highlighted that more work is needed to increase the attractiveness of the sector to young people and parents need to be provided with information to help them understand the opportunities. The focus groups with young people at schools confirmed the feedback from the Sector Skills Councils and highlighted that: A great deal of work has gone into to raising the profile of engineering in schools with young people. All were aware that there were work opportunities and many had been at talks at which engineering companies presented on their opportunities. Many young people felt that their parents were not convinced that engineering was the best option for them. Engineering was perceived by many parents to be an unattractive profession for young people (it is often perceived to involve dirty work less than favourable working conditions/unsociable hours). Girls in particular equate engineering to needing to be very good at maths and if they feel at all weak at maths they do not consider it. Careers teachers and young people at focus groups were clearly aware that opportunities exist in the sector, however a number raised questions about what subjects they should study to get the best jobs in engineeringi.e. should they take technology type GCSEs or keep to the traditional route of 4 sciences indicating that there is some confusion about the best pathway to take. Also questions were asked about apprenticeships and there was a lack of awareness/knowledge about the timings and exact opportunities in this area. More recently universities have been working to promote the opportunities in engineering/advanced manufacturing to young people. For example, Queen s University hold an evening in November every year specifically aimed at promoting opportunities in engineering to parents. When the event started out 5 years ago, approx. 400 parents and young people attended and now over 1,200 parents and young people attend. This demonstrates the growing demand from parents for information. This also came out through the focus groups and interviews with young people and Careers teachers at schools- as 10

15 they highlighted that many parents were not aware of the job/career opportunities that existed Apprenticeship Training and Upskilling Existing Employees SEMTA highlighted a number of areas for action that were supported by company feedback through the survey findings. These were, the need for: Improved apprenticeship training which would deliver apprentices with the skills and experience needed by companies. Many companies complain to them that the training doesn t equip apprentices with the right skills and practical experience. Small firms need help to invest in apprenticeship training as they cannot afford the time and money needed to provide the infrastructure needed to implement the training. The apprenticeship training landscape needs to be simplified as at present there are programme led apprenticeships and Employer led apprenticeships. The apprenticeship brand needs to be simplified as there have in the past been programme led apprenticeships (PLA) which have confused employers. Companies need to consider what more they can do to upskill those in employment and ensure that they are availing of government programmes such as Invest NI Skills Growth programme and the DEL Customised Training support to do so. Larger companies should consider how they can help companies in their supply chains; develop the skills and expertise of their engineering employees. A strong collaborative network between Government and training providers, other key stakeholders to simplify support provision to employers. It is recognised that the Minister for Employment and Learning is conducting a Review of Apprenticeships and that these issues are being looked at in more detail in this work Summary In summary the main areas for development highlighted from the consultations were: Information on education/career pathways for advanced manufacturing jobs is needed so that parents/young people can be aware of the subjects to study and the different paths to be taken to increase chances of success in getting employment in the different specialisms across engineering. Salary 11

16 information and progression data should also be available. This information should be provided well before decisions are made on GCSEs. Further work is needed to promote the sector to girls. This should continue to include female role models, but it should also include detail on female career options/pathways. Students and their parents should be provided with information on the route to apprenticeships and given information and contacts as to how to apply. SMEs need help to invest in apprenticeship training and encouragement to get involved in joint initiatives with other companies to share the costs involved. Supply chains should be used by the larger companies to encourage the smaller companies to invest in training and get involved in shared training. Collaboration is needed between Government and training providers, other key stakeholders to simplify training support provision to employers Salary Issues A key issue in the attractiveness of any sector to new entrants and a factor in retaining employees is the remuneration available and the comparison with other occupations and in other regions. The analysis of salary data for engineering jobs has identified a variance in salary levels between Northern Ireland, the UK and the Republic of Ireland for a number of roles. The basic median pay of those in clerical and technical roles is 19, for Northern Ireland, which is 13% less than the average UK basic median pay. Manual workers in Northern Ireland are also earning salaries which are 7% less than their counterparts in the rest of the UK. The salary levels for the operative, skilled trade, associate professional and technical roles in the advanced manufacturing and engineering sector are all lower than the general salary levels for similar occupations in Northern Ireland, with the exception of maintenance fitters 14. Professional occupations within the advanced manufacturing and engineering sector including process, project, quality and maintenance engineers also receive lower salaries than the general salary levels for professional occupations in Northern Ireland 14. This increases the risk of Northern Ireland s advanced manufacturing and engineering sector losing potential employees who are at an operative, skilled 13 Workforce Pay Benchmark #08 Manual, Clerical & Technical Employees, EEF: Manufacturers Organisation 14 Results from the Northern Ireland Annual Survey of Hours and Earnings (Department of Finance and Personnel, 2012) 12

17 trade, associate professional or professional level to other sectors that pay higher salaries. Median pay was also lower in Northern Ireland than the Republic of Ireland for a number of advanced manufacturing and engineering occupations. Whilst it is expected that salaries in the Republic of Ireland are higher as the cost of living is higher, the differential in some cases was very significant. For some occupations, such as Process Engineers, the salary levels in the Republic of Ireland were 66% higher than those in Northern Ireland. Other occupations where Northern Ireland had significantly lower salaries included Project Engineers, Quality Engineers, Maintenance Engineers and Maintenance Managers. This will make it difficult for companies based in or close to the border areas to attract and retain engineers. The salaries of graduates vary significantly depending on the area they are involved in. In the electronics, electrical engineering and computer sciences sector; software engineer graduates can earn between 18,000 and 25,000 per year. Supplier quality assurance engineer graduates salaries earn between 22,000 and 27,000. For civil engineer graduates there is a variance of 9,000 between the highest ( 24,000) and lowest earners ( 15,000). A similar margin ( 15,000-22,000) is also evident for graduate civil design engineers in Northern Ireland. Design engineer graduates in the aerospace sector can earn between 15,000 and 24,000 per year. A starting salary of 15,000 would appear to be relatively low for an occupation that is deemed high in demand and could possibly be a reason for the difficulties experienced in filling engineering positions as it is unlikely to attract potential entrants to the sector. Companies with graduate engineering vacancies and salaries of 15,000 per year based in the border areas will find it particularly difficult given that salaries in the South of Ireland are much higher generally than in Northern Ireland. 1.6 Action Plan Actions are needed in a range of areas, including increasing attractiveness of the sector to young people, increasing the number and quality of apprentices, and investing in upskilling existing staff ACTIONS NEEDED TO INCREASE ATTRACTIVENESS OF THE SECTOR TO POTENTIAL EMPLOYEES There is evidence that the work of the DEL Careers Advisers, School Careers Teachers, SEMTA, Sentinus, W5 and those businesses involved with schools 13

18 is having an impact in raising the awareness of young people about opportunities in the sector. The research has highlighted that there is a growing interest in STEM related careers including engineering. This interest is evident through the feedback received from pupils in the focus groups. Many parents and guardians however are not aware of the opportunities and see a career in engineering involving working in dirty and non-family friendly environments. This is a view shared by some girls at schools and needs to be addressed through the promotion of more female role models to help address this issue. Whilst interest in STEM careers has grown, further work is needed at the stage prior to young people choosing their GCSEs as Northern Ireland has not seen the increase in young people studying STEM GCSEs that other parts of the UK has experienced. There is also evidence from pupils and school careers teachers that short work placement type activities are a very effective way to allow young people the opportunity to check out the work and test whether it is what they are interested in doing. Many careers teachers at schools in Northern Ireland are now much more aware of engineering job opportunities and have built relationships with local employers. It is however not practical to assume that schools careers teachers will be able to stay up to date with all the areas of engineering and it is essential that they continue to build their relationships with employers and that they use managers/staff in these businesses, who have already signed up with W5 to be STEM Ambassadors to support/act as e-mentors for young people. These people are already in place through the STEMNET contract. They should be working with teachers as well as pupils to ensure the whole system is connected. Just over half of businesses from our survey are involved in promoting their business through schools and colleges. Feedback from schools is that this work is welcomed and essential to building awareness of the opportunities, but that companies should get involved from one off annual events through to ongoing regular contact with both inviting students into their companies for site visits and completing talks at the schools. The ongoing personal contact between companies and students is seen as essential to stimulating interest in the young people and this type of activity needs to be encouraged and helped as much as possible. 14

19 Actions: The sector should work with primary schools to increase awareness and interest in engineering as part of the STEM activities. Primary Schools could be provided with kits/activities that teachers can use to excite children about engineering design and production. Sector Skills Councils, FE and HE with employers need to tackle the image of engineering held by many parents/guardians by providing information to support existing career evenings with parents. These should inform them on the range of careers available within the sector and the opportunities that exist including information on the whole life time earnings that can be generated through an engineering career in comparison to other professions. Many of the parents of students with top GCSEs will be keen to see their children follow recognised pathways to professions such as medicine and they need information that shows that a career in engineering can be just as rewarding as other professions. These sessions should also include information on the education pathways needing to be followed to pursue the different type of careers in engineering and they should highlight the importance of gaining practical experience as well as academic qualifications. Parents have questions on apprenticeships that Careers teachers are not up to date on, and these should be incorporated into the sessions. There is a need to ensure that the promotion of engineering starts with relevant activities from the first year of second level school, rather than waiting until students are aged 14 or over. This way there can be continuity of support from primary schools through to second level education. A good example which stimulated interest in engineering in schools is the UK Aerospace Youth Rocketry Challenge. Consideration should be given to expanding the programme in NI to ensure more schools and students are exposed to the programme and the principles of engineering and manufacturing. Consideration should be given by the business sector to regularly invite and showcase their industry/business to primary, secondary and grammar school pupils. This will provide business with an opportunity to promote their business/sector and to stimulate an early 15

20 interest in engineering amongst students. See Inside Manufacturing (SIM) was highlighted as a useful example to consider. SIM is a partnership model between government (BIS) and industry has been created to transform students perception of manufacturing in strategic sectors. SIM is an effective initiative where manufacturers are asked to open their doors to interact with students, teachers and career advisors to visit their manufacturing facilities and change the sceptical perceptions of manufacturing and get behind the scenes of success. Thought should be given to developing a promotional tool (film, advert, etc.) which could be utilised by key stakeholders to act as an early mechanism to attract and encourage interest in the manufacturing and engineering sector. Sentinus should consider expanding their short workplace engineering activities e.g. Insight into Engineering programme 15 but ideally a version of it should be available to pupils in the summer before they choose their GCSE subjects, in order to help young people decide on their potential career options and therefore help with their GCSE choices. Stakeholders should consider working together to promote careers in their business/sector with schools and colleges (particularly at KS3 and KS4). The industry fact sheets already provide the facts on the whole life earnings. This needs to be used more in sessions with parents and young people to compare with other professions. The information that is important to young people includes: Nature of Work; Salary levels in comparison to other jobs; Hours of work; Travel; Conditions in which they are expected to work; the subjects to study/education pathways and different routes that exist to getting into engineering and finally what they can do now if they are interested. School Careers Teachers should have access through W5 (Provider of the STEMNET contract) to the STEM ambassadors from advanced manufacturing/ engineering businesses that are available in their local 15 This is a 5 day programme run for ALEVEL students to give them an insight into careers in engineering. 16

21 area. These are people that they can contact and ask specific questions regarding their sector, so that the information they provide to pupils is up to date ACTIONS NEEDED TO BUILD SKILLS OF POTENTIAL ENTRANTS TO THE SECTOR TO MEET NEEDS OF BUSINESSES The projected supply of people with STEM related qualifications from Further Education, Higher Education and Apprenticeships in Northern Ireland is 10,088 per year 16. The demand for people entering the advanced manufacturing and engineering sector is projected at 3,000 per year 17. The projected demand for advanced manufacturing and engineering occupations can therefore be met by the projected supply of people obtaining qualifications relevant to the sector, assuming that at least a quarter of those gaining qualifications will enter employment in the sector. The focus however should be on ensuring the sector can attract the top talent from FE and HE colleges and that they have the skills needed for the advanced manufacturing and engineering sector. Whilst there is a lot of information available on the different education pathways they are not all connected up and there is no one overall source of this information. The literature review and the RSM survey have shown that employers have concerns about the quality of graduates/apprentices coming out of Higher Education/Further Education Institutions and training providers and are now favouring those who have proven practical experience. Employers spoke through the survey of the need to ensure that potential applicants have already developed the ability to communicate with others, problem solve and work as part of a team. Their feedback is that too many young people lack these specific basic skills. Companies have highlighted their concerns with the apprenticeship training provided by a number of external training providers including FE colleges. Their feedback was that the training provided was not always responsive to their needs and that training providers needed to ensure that the training provided was business led. Many larger employers in particular support employer led apprenticeship schemes, and by developing their own provision they can tailor their programmes to meet their needs. 16 See Section See Section 7.4, Table

22 The Foundation Degree has been set up to provide students with the opportunity to access qualifications and work based experience. The degree is being delivered by FE working in conjunction with HE and the test of its success will be in the extent to which it has produced graduates that meet employers skills needs. It is being piloted this year and the results will be available in Smaller employers find it particularly difficult to invest the time and money needed to manage and deliver apprenticeship training. The level of administration associated with delivering on apprenticeships as well as the costs involved in management time being diverted from production is a burden many felt they couldn t cover. A separate Review of ApprenticeshipsNI Provision is underway and due to report in Actions: A co-ordinated information central source should be used to detail the different education/career pathways that can be taken by students pursuing engineering careers. Apprenticeship training needs to meet the requirements of business and this should be actioned through the implementation of the recommendations which will come out of the Ministerial Review of ApprenticeshipsNI. The Foundation Degree 18 should be evaluated at the end of its first year to assess whether it has addressed employers needs. The business community and education providers (further and higher education) should investigate the possibility of establishing a curriculum group (specifically for advanced manufacturing and engineering) which would regularly meet to ensure that courses and qualifications remain relevant to business needs. Consideration should be given to expediting the process which it takes to develop and fund specific courses relevant to growing the manufacturing and engineering sector. 18 HLA Engineering pilot 18

23 1.6.3 ACTIONS NEEDED TO ENSURE THAT SUFFICIENT SKILLED RESOURCES ARE RETAINED IN NORTHERN IRELAND TO SUPPORT THE SECTOR A comparison of the salaries offered to engineers in Northern Ireland compared to the South of Ireland shows that Northern Ireland is paying below the levels that can be obtained from working south of the border. This is a particular problem for SMEs that operate close to the border and makes it difficult for them to attract and keep resources. As well as this, organisations in Northern Ireland are paying as little as 15,000 salaries for graduates which will create difficulties in attracting potential entrants to the sector. Companies need to be able to pay market rates if they are going to attract the resource they need and it is particularly important that they attract resources with sufficient expertise to help the Senior Managers consider product/market opportunities which will increase their potential of profit so that they can afford to pay market rates or above in the longer term. In the short term government support is needed to help these companies particularly SMEs afford the talented resource they need to grow and develop profitably. There is a smaller but still significant salary difference between NI and the rest of the UK. Therefore whilst it is projected that Northern Ireland will produce sufficient resource to meet the needs of the local sector, the rest of the UK market will most likely have a gap. In particular the Royal Academy of Engineering has estimated that there will be a shortfall of over 100,000 STEM graduates per annum ( ) across the UK. If this situation arises, Northern Ireland could experience a brain drain with its engineering talent being attracted to better paid positions in the UK. This is an area that needs to be kept under review. Actions: Invest NI to provide top up salary support to SMEs that are unable to afford to pay market rates for engineers in key positions within the companies that have the potential to contribute more to the economy. Key positions are those that require specialist technical skills to help the company develop new products/new markets and to increase their exporting levels. Northern Ireland companies should prepare for the potential risk of engineers being attracted to positions outside of Northern Ireland and 19

24 develop plans for ensuring they have sufficient resources coming through from HE/FE to meet their needs. Companies should consider setting up scholarships, bursaries and summer placements to attract top talent from HE/FE to them. The development of close working relationships between employers and FE and HE institutions will allow the latter to promote the local opportunities to their students. Universities should provide companies seeking to employ graduates, information on the salaries being paid to graduates. Companies should use the market salary information for graduates to inform their pay strategies for these positions. It is important that companies seek to recruit the best talent for the local economy APPRENTICESHIPS The survey and interview findings highlight a need for more apprentices to be trained in the skills and experience needed by companies. SMEs in particular lack the time or resource to support apprenticeship programmes and there is a need to simplify the apprenticeship programmes so that they can be more easily understood by companies. Actions: Larger companies should be encouraged to support SMEs in their supply chain and to take on apprenticeships. SMEs not involved in a supply chain with larger companies should be provided with more incentives to take on apprenticeships. DEL should consider the need to provide support with apprenticeship costs ACTIONS NEEDED TO UPSKILL THE SECTOR The Working Futures Model shows that people in the professional, associate professional, skilled trades and managerial jobs with a large STEM content will be in highest demand across the sector. The supply of 10,526 individuals with STEM related qualifications is predominantly made up of those coming from 20

25 Further Education Institutions (82.1%) 19. The lower numbers of Higher Education qualifications is a concern; particularly for the annual demand for 394 director and managerial vacancies (including other managers and proprietors) projected by the Working Futures Model - which is where demand is highest. Managers are crucial to ensuring that the sector remains competitive and is up to date with new technologies/developments. There are pressures on the sector locally to contract through the competition to move operations to low cost overseas sites. The response to remain competitive is to add more value to the product through for example producing customised products and adding on services and/or developing new products/technologies. ICT is playing a greater role in manufacturing as the sharing of information with customers and suppliers in the most efficient and secure way becomes essential. These changes will have an impact on the skill requirements of the local workforce as increasing global trade will put pressure on lower skill activities. Invest NI through the Skills Growth programme and DEL through Customised Training and Management Development programmes already have the support processes in place to provide funding to the sector. The RSM survey 20 shows that there is a need to promote these interventions to the sector and to encourage further uptake and therefore investment in management development. The management programmes should include: Strategic Management; Cost Reduction/ Resource Efficiency; Project Management; and Business Development. Given the opportunities through Horizon 2020, some Managers may need development in putting together bids to the European Commission. The RSM survey highlighted a number of immediate skills shortages within the sector, including CNC machining and welding. Work is underway with NRC and SERC to deliver a CNC academy, which will produce skilled resources within one year. If this joint industry/fe college approach is found to be effective in meeting the needs, then it is an approach which should also be taken to actioning the skills shortages in welding. The Agri-Food, Aerospace and Sustainable Energy sectors have identified specific skills issues and associated actions, which need to be implemented to 19 See Section See Section 6.4.4, Table

26 deliver on the strategies 21. The common requirement across all three sectors is that the training delivered should be employer/demand led and specific to each of the specialisms within each of their sectors. In terms of the skill requirements, there is a strong need for individuals with skills equivalent to levels 4 and 5 in science, technology and engineering qualifications 22. The Aerospace Strategy states that current skill levels of existing staff are below what is required and there is a major challenge in upskilling a large percentage of the workforce. There is a need to increase the number of apprentices with higher levels skills to support the growth. Further higher skill levels are required to support the Agri-Food and Sustainable Energy sectors. Actions: DEL/Invest NI should increase awareness of their training supports to client companies in the advanced manufacturing and engineering services sector, highlighting the need to build capacity within both existing managers and those likely to take up management positions in the future. Management succession programmes should be encouraged within those companies with a cadre of junior managers. These programmes will require the identification of employees with the talent and ambition to be future leaders within the company. These employees should be provided with the development needed to ensure they will have the required skills and competencies to manage and lead the companies in the future. DEL/Invest NI should work with businesses/training providers to ensure that the management training provided is tailored to the advanced manufacturing/engineering services sector. The support should develop future leaders with the ability to lead strategically and to ensure NI companies develop a competitive edge. The support provided should ensure it provides access to knowledge of business opportunities on a global scale. DEL/Invest NI should work with advanced manufacturing companies operating with low profit margins to provide access to strategic 21 See Section Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector 22

27 support that will help them identify value add opportunities which will allow the companies to grow profitably. This could be actioned through the provision of international advanced manufacturing/engineering mentors, working with local companies, to help them develop strategically. The approach taken to CNC machining should be reviewed within a year and if it is has delivered on industry needs then it is an approach which should be taken to dealing with the shortages in skilled welders/design engineers. The skills actions set out in the strategies for Aerospace, Agri-Food and Sustainable Energy should be implemented. The delivery of these supports should be business-led and employers should be incentivised to work with FE/HE as required to deliver higher quality vocational learning. Larger employers should consider the opportunity to involve trainees from their SME supply chains, in any training programmes they have established to provide apprenticeships, thereby reducing the time/ cost to the SMEs ACTIONS NEEDED TO RETAIN SKILLS WITHIN THE SECTOR The workforce in Science, Engineering and Technology occupations is ageing with 31% of skilled workers and 23% of associate professionals aged 50 or over (based on 2010 data) 23. This growing older workforce could mean high replacement demand levels and therefore greater emphasis will need to be placed by employers on how they can attract new workers, if they are to avoid skills shortages and/or how they retain their older workforce longer than might normally have been expected. The human resource policies and practices of companies with regard to training/development for new workers and flexible work patterns for existing workers will play a large role in attracting and retaining workers. Action: Invest NI should provide advice and guidance to companies on how to retain talent through the development of relevant HR policies and procedures. 23 Source: Working Futures Model 4 (Institute for Employment Research, University of Warwick) 23

28 1.6.7 ISSUES SPECIFIC TO SMALL-MEDIUM ENTERPRISES (SMEs) SMEs are much less likely to invest in training for their employees compared to medium-sized firms, with 38% of SMEs providing no training at all 24. The main reason 25 cited by 66% of employers who had not provided any training in the previous 12 months was that there was no need, predominantly because their staff were fully proficient. Other issues cited related to the expense of training, time issues, training supply issues (e.g. relating to the availability and quality of courses available locally). Action: SMEs need external support to identify the training needs within their companies. Given that a high proportion of SMEs do not feel they need training, it is important this assessment is carried out independently, but by specialists who understand the sector NEED FOR SECTORAL SUB-GROUPS Given the diverse nature of the advanced manufacturing and engineering sector there is a wide range of issues affecting each sub-sector. Action: DEL should therefore consider establishing a range of sectoral sub groups to analyse and take forward specific work programmes unique to their sub sector. This will ensure that tailored support can be developed to address specific issues facing identified sub sectors. From the analysis four potential sub-sectors could be considered: Aerospace/Advanced Manufacturing; Energy & renewables; General Manufacturing; and Education. 24 See Section 4.12, Table Identified in NESS09 for not providing training 24

29 2 BACKGROUND 2.1 Introduction This section sets out the background to this research, as well as the terms of reference and the methodology used to meet these. The structure of the remainder of this report is detailed in Section Background RSM McClure Watters was appointed by the Department for Employment and Learning in April 2013 to complete research into the supply of skills required for advanced manufacturing and engineering sectors, both at present and forecasting the future requirement for these skills. The research also needs to highlight gaps in existing and predicted skills supply and provision, and make recommendations to address any issues identified. 2.3 Terms of Reference The research objectives are as follows: define the sectoral footprint and size of the advanced manufacturing and engineering services sector; highlight the economic and statistical value of the sector and its importance to the Northern Ireland economy; assess the current skills profile of the current workforce (by qualifications) for the sector and highlight the current demand of these skills; the analyse regional salary information across the advanced manufacturing/engineering services footprint in UK and Ireland including a review of salary information by skill level, particularly at the level of graduate and post graduate; assess the supply of skills (lower, intermediate and higher levels) for the sector from our schools, Further Education (FE) and Higher Education (HE); determine the future skill requirements for the workforce in the sector in Northern Ireland; highlight any skill imbalances which currently exist or are forecast to exist; identify what actions are needed to ensure that the supply of these skills in Northern Ireland is sufficient for the sector; and Provide an evidence base for the development of an Action Plan for the advanced manufacturing and engineering sector. (Source: Department for Employment and Learning Research into Advanced Manufacturing and Engineering Services Skill Needs Terms of Reference 2013) 25

30 The specific requirements included: Review current research studies and evidence (from SSCs, UKCES, Invest NI, DETI, CBI, Royal Society of Engineering) on the advanced manufacturing and engineering services sector; Develop an economic and statistical model to examine the demand for skills (at lower, intermediate and high level skills) under a range of scenarios, over the short, medium and longer term; Identify the trends and drivers of change which will have the greatest impact on the future skill requirements for the sector; Determine the implications of these trends/drivers of change for the skills requirements for the industry and any associated impact for training provision; Consult with relevant stakeholders within the industry including employers, their representative organisations, schools, FE and HE institutions; Identify examples of best practice (locally, nationally and internationally) in relation to skills training, delivery of research, industry engagement and collaboration. It should be highlighted how this could be tailored to Northern Ireland; and Identify existing advanced manufacturing and engineering services programmes, niches and research competencies in Northern Ireland s Higher and Further Education Institutions. (Source; Department for Employment and Learning Research into Advanced Manufacturing and Engineering Services Skill Needs Terms of Reference 2013) 26

31 2.4 Methodology A specific seven stage approach was developed to meet the requirements set by the terms of reference. These stages were; Stage 1: Project Planning and Initiation; Stage 2: Secondary Research Desk Research and Literature Review; Stage 3: Consultations and Interviews with Key Stakeholders; Stage 4: Survey; Stage 5: Additional Stakeholder Interviews; Stage 6: Modelling/Forecasting of Future Requirements for Skills and Recommendations; and Stage 7: Reporting and Dissemination of Findings. 2.5 Structure of This Report The remainder of this report is structured as follows: Section 3: Literature Review; Section 4: Definition of the Sectoral Footprint and Size of the Advanced Manufacturing and Engineering Services Sector; Section 5: Survey Analysis; Section 6: Economic and Statistical Value of the Sector and its Importance to the Northern Ireland Economy; Section 7: The Current Skills Profile of the Workforce (by Qualifications) and the Current Demand of these Skills; Section 8: Regional Salary Information across the Advanced Manufacturing and Engineering Services Footprint in the UK and Ireland; Section 9: The Supply of Skills; Section 10: Analysis of Skills Supply and Demand; Section 11: The Future Requirements for the Workforce in the Sector in Northern Ireland; and Section 12: Evidence Base for the Development of an Action Plan for the Advanced Manufacturing and Engineering Sector. Due to the size of the appendices list these are contained within the Appendices Report, which is a standalone document: Appendix 1: Terms of Reference; Appendix 2: Consultations; and Appendix 3: Surveys and Results. 27

32 3 POLICY CONTEXT AND DRIVERS FOR CHANGE 3.1 Introduction This section demonstrates the importance of the advanced manufacturing and engineering sector to the Northern Ireland economy. It also sets out why this research is needed and the key drivers impacting on the sector. 3.2 Government Policies Evidence from our forecasts estimate that the advanced manufacturing and engineering services sector currently employs 79,580 people, 10.0% 26 of the total NI workforce. Additional evidence from the Department of Enterprise, Trade and Investment (DETI) shows that in 2011 the sector contributed GVA of 3.98bn and exports worth 4.29bn, providing further statistical evidence on the importance of this sector to the Northern Ireland economy. It also involves a number of companies that invest in research and development. These are detailed further in section 5. As a result, the sector makes an important contribution to the Northern Ireland economy. Table 3.1 outlines the relevant government policies and strategic documents related to advanced manufacturing and engineering that demonstrate the strategic importance of this sector to the Northern Ireland economy. Table 3:1: Advanced Manufacturing and Engineering services linked to Government Policies in Northern Ireland and other Relevant Reports Strategy Programme for Government (PfG) Northern Ireland Economic Strategy Action Plan 2012 Link to the Research Priority 1 of the PfG, Growing a Sustainable Economy and Investing in the Future has its chief purpose to increase the value of manufacturing exports by 20%. To do this, the PfG states that the labour market must be rebuilt in the wake of the global economic downturn and the economy rebalanced to improve the wealth and living standards of individuals. Key to this is upskilling the workforce. One of the four overarching economic goals in the Strategy is competing in the global economy. Specific targets relating to advanced manufacturing and engineering include: 26 See section 5: Definition of the sectoral footprint and size of the Advanced Manufacturing and Engineering services sector 28

33 Strategy Link to the Research Increasing the value of manufacturing exports by 20% and the value of exports to the emerging economies by 60% by 2014/15; Engaging with a future study of the UK manufacturing sector, and, through MATRIX 27, conduct a NI specific analysis of future opportunities and requirements; Increase the value of manufacturing exports to emerging economies by 60%; and Developing an agri-food strategy and action plan to drive export led growth in the agri-food sector. Success through Skills Transforming Futures Northern Ireland Skills Strategy 2011 Success through Skills Transforming Futures is the Skills Strategy for Northern Ireland. According to the strategy, the skills of the people joining the workforce from education will only meet approximately half of the demand for skills in One of these challenges therefore is the need to up-skill and re-skill those already in the workforce in Northern Ireland. As over 75% of the 2020 workforce have already completed their compulsory school education, the up-skilling of the existing workforce must be viewed as an important element of the changing workforce structure and, as such, is identified as an important theme in the skills strategy. This strategy includes a number of long term strategic goals (up to 2020) to ensure there are sufficient skills available over the next decade to address the productivity gap with the rest of the UK. The specific targets are as follows: Strategic goal 1: Increase the proportion of those people in employment with Level 2 skills and above to 84-90% by 2020, from a baseline of 71.2% in 2008; Strategic goal 2: Increase the proportion of those people in employment with Level 3 skills and above to 68-76% by 2020, from a baseline of 55.43% in 2008; and Strategic goal 3: Increase the proportion of those people in employment with Level 4-8 skills and above to 44-52% by 2020, from a 27 Matrix is the Northern Ireland Science Industry Panel who report to DETI on matters pertinent to the exploitation and commercialisation of science, technology, research and development. 29

34 Strategy Graduating to Success Higher Education Strategy for Northern Ireland 2011 Link to the Research baseline of 33.2% in The Higher Education Strategy sets out the direction of higher education in Northern Ireland to The strategy has an emphasis in being more responsive to the needs of the economy, improving the quality of education, improving access to education, and being more flexible in terms of delivery and funding. Also included within the strategy is the commitment to leverage the potential of further education colleges to facilitate the up-skilling and reskilling of the workforce. Additionally, knowledge transfer and innovation is highlighted as an area for development, and iterates a commitment to increase knowledge transfer activity and improve links with small and medium enterprises (SMEs). In relation to advanced manufacturing and engineering, the Department will encourage the higher education sector to rebalance the current academic profile, with a greater emphasis on STEM and economically relevant subjects. Northern Ireland Agri-food Strategy (Agri-Food Strategy Board, 2013) This strategy sets out a strategic vision and targets for Agri-Food and develops seven major themes that impact across the entire industry and act as drivers, enablers or barriers to growth. The strategy also details the specific strengths, challenges and priority recommendations for individual sectors. The strategy outlines what actions need to be taken in relation to developing the innovation, entrepreneurship and skills of the agri-food sector including: Develop a programme to introduce food into the education curriculum at pre-school, primary and secondary level to enhance the understanding of agriculture and food, and examine the scope for development of primary and secondary level curriculum based training in agriculture and food to GCSE exam level; and Resource and expedite implementation of the Food and Drink Future Skills Action Group (FSAG) Action Plan. 30

35 Strategy Horizon 2020: Northern Ireland Action Plan 2013 The Framework Programme for Research and Innovation Northern Ireland Innovation Strategy (Draft ) Link to the Research Horizon 2020 provides the opportunity for advanced manufacturing companies to work in partnerships across Europe with other companies and HE/ FE institutes to access collaborative funding to develop new products and/or processes. Northern Ireland s Innovation Strategy is in draft form and sets out its aim to stimulate a step change in innovation, R&D and creativity across the economy and in doing so deliver a vision that: Northern Ireland, by 2025, will be recognised as an innovation hub and will be one of the UK s leading high-growth, knowledge-based regions which embraces creativity and innovation at all levels of society. In tangible terms this sort of transformation by 2025 will mean: Many more companies engaging in innovation, collaboration and exporting; Doubling the number of knowledge economy businesses and increasing their employment by 15,000; Expenditure of 1billion per annum on R&D; Greater numbers of young people achieving graduate and post-graduate qualifications in STEM; and Innovation covers not just R&D but skills, leadership, design, branding, training or marketing they are investing in innovation. The actions that will be taken to support this strategy include: Encourage more businesses to innovate and carry out R&D; Increase focus on companies who are not innovation active; Prioritise support in areas ensuring the greatest potential economic impact for NI; Use foresight activity to inform government of emerging technologies and future markets ensuring the necessary skills base is in place to exploit opportunities; Continue to embed ICT as a cross-curricular skill in schools and colleges; 28 Source: Draft Innovation Strategy for Northern Ireland ( ) 31

36 Strategy Link to the Research Continue to promote research excellence and meet the needs of industry; Promote the benefits of design; Develop and hone the skills to support innovation; and Support R&D and innovation infrastructure in HSC organisations. Preparing for a Lower Corporation Tax Environment The Impact of a Lower Corporation Tax in Northern Ireland on the demand for Skills, Employability and R&D Capacity, 2012 MATRIX This report gives evidence that, going forward to 2020, the proportion of people in employment with higher education qualifications will be significantly higher than at present. Similarly, the report also demonstrates that the proportion of those in employment with low or no qualifications will significantly decline. MATRIX, the Northern Ireland Science Industry Panel, was born out of the Regional Innovation Strategy (RIS) for Northern Ireland. In February 2007 it was tasked with bringing forward-focused advice on the future policies necessary for Northern Ireland to ensure economic growth and wealth creation through greater commercial exploitation of its science and technology capabilities. The first MATRIX report, a Technology Capability report and five overarching Horizon Panel reports were launched by the DETI Minister on 8th October These reports focussed on the following five sectors: Advanced Manufacturing; Advanced Materials; Information and Communications Technology (ICT); Agri-Food; and Life and Health Sciences. 32

37 3.3 Drivers of Change across the Sector This section covers the terms of reference requirements to: Identify the trends and drivers of change which will have the greatest impact on the future skill requirements for the sector There are a number of drivers of skill demand in the advanced manufacturing and engineering sector including: Technical change; Competition and globalisation; Environmental change; Consumer demand; Firms strategic choices; and Demographic change Technical/Technological Changes: Technology is playing a key role in increasing the efficiency of the sector. For example the development of ICT technologies makes it increasingly possible for a producer/manufacturer to control a system which has design and final assembly located in one country, whilst having the components and subassemblies produced in another. Advanced manufacturers need ICT alongside engineering skills to take advantage of these changes and stay competitive. There are however a whole range of other technology related skills which are expected to become much more important in the longer term. Sectors such as Aerospace, Agri-Food and Sustainable Energy, which are covered later in this sector, will require skills which are specific to the employer. Skills Implications: It is important that engineers are developed with the ability to use ICT to support the manufacturing in Northern Ireland Competition and Globalisation: In recent decades UK manufacturing has experienced pressure from countries such as Taiwan, Korea and many others. The last decade alone has seen the massive growth of manufactured goods from countries such as China with the probability that over the next decade there will be more competition from countries including India and Brazil. There are two main considerations for global companies- costs and R&D. Cost is a key driver for manufacturers in deciding where to locate different activities within the value chain. The main trend has been to move relatively low 33

38 value added activities offshore to take advantage of lower production costs (e.g. labour costs). Increasingly, however, there is evidence that more high value-added activities are being developed offshore too, such as the internationalisation of R&D. On the other hand, there is also evidence that some manufacturers have been repatriating manufacturing activities related to the difficulties of operating in some countries, e.g. the enforcement of Intellectual Property Rights (BIS, 2010b). The availability of skilled and competent professional resource is recognised as being key to retaining R&D functions. The University of Sheffield Advanced Manufacturing Research Centre (AMRC) with Boeing is a world-class centre for advanced machining and materials research for aerospace and other high-value manufacturing sectors. It is a partnership between industry and academia. The centre received the Queen's Anniversary Prize for Higher and Further Education in The AMRC has also been named Boeing Supply Chain Company of the Year, the first time such an award has been given to a UK company. The AMRC grew out of an initiative within the University's Faculty of Engineering, which put postgraduate engineering students into local supply chain companies to work on live manufacturing challenges. This developed into a collaborative vision of leading researchers working with businesses and major international companies to become more efficient, sustainable and competitive. It employs 250 highly qualified researchers and engineers, and brings together over 70 partner companies supporting aerospace and high-value manufacturing, and over 35 partner companies involved in the manufacturing required to support the development of civil nuclear energy plants. Skills Implication: NI needs to ensure it has a sufficient supply of the higher level value add skills to support both the needs of local businesses and those who are internationally mobile. To be recognised as world class the HE sector needs to work with businesses so that the students access real life engineering experience as well as academic skills/ education. It also needs to ensure that engineers coming out of HE and FE are equipped with the skills needed to reduce costs such as the materials and/ or labour used in production. Access to world class manufacturing methods and systems will be crucial in this regard and the institutions will need to ensure they are at the forefront on this work. 34

39 3.3.3 Environmental Change The green agenda is expected to have a significant influence on the sector. The trend towards tougher environmental standards and the likely increase in international agreements will drive demand for low carbon goods and services, including green energy generation. Global renewable energy is forecast to grow by 4-5% per annum to 2015 and in the UK by 6-7% per annum. There has also been a broader increase in environmental awareness across the UK and companies are becoming increasingly focused on investing in resource efficiency measures. Skills Implications: The Environmental agenda will drive up the demand for new and emerging technological skills in the renewable energy sector. The pace of change in the sector will dictate the changing skills profile needed and FE/ HE need to be collaborating with businesses to plan for the longer term opportunities as well as meeting the existing skill needs. The growing focus on saving energy and reducing costs will also require employers to have managers in place with skills and competencies in managing resources efficiently. Table 3.2 highlights previous research commissioned by the Department for Employment and Learning which shows projected annual growth rates for the sustainable energy sector in Northern Ireland. The projected growth rates range from high to low, indicating the high degree of uncertainty in the sector. Table 3:2: Projected growth rates for the Sustainable Energy Sector by 2020 for each sub-sector Sub-sector Annual Growth of Market Size to 2020 (%) Low Central High Integrated Building Technology 5.5% 10.0% 15.0% Offshore wind 17.0% 27.0% 32.0% Offshore wave, tidal 7.0% 26.5% 40.0% Bioenergy electricity 5.7% 6.7% 29.0% Bioenergy heat 3.9% 9.4% 22.0% Bioenergy transport 6.2% 9.5% 13.8% Energy storage 3.0% 4.0% 6.0% Source: Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector (Department for Employment and Learning, 2011) 35

40 3.3.4 Consumer Demand: Aerospace and Agri-Food Customisation of products/added Services Consumer demand has impacted on a number of areas within the advanced manufacturing sector. For example, there has been an increase in demand for air travel over the last few years and this has led to rising demand for new aircraft. The UK aerospace industry is expected to grow at a rate of 6.8% over the next few years. This is driven by a global increase in air traffic, which is expected to be sustained at a rate of 4.7% per annum between now and 2030, meaning a doubling in air traffic in the next 15 years 29. The food processing sector has also seen a significant increase in demand for added products. The projected GVA for the sector by 2020 is 1.04billion, almost double what it is currently 30. Skills Implications: The economy needs to have sufficient skills coming out of the education sector to meet the industry demands, with regard to numbers and quality of resource available. The School, HE and FE sectors therefore need to be focused on ensuring that sufficient additional resources are being attracted into those areas where there is greatest potential for growth in the future. Careers teachers in schools need to be aware of the future job opportunities and ensure that pupils and parents/guardians are made aware of these and the education pathways needed to support them Strategic Management A major challenge for companies of all sizes is the ability to look for and recognise the longer term trends and drivers of change that could impact upon their businesses, the implications that those trends have for them, and the expected timescales over which change of one kind or another will need to be completed. Skills Implications: Companies therefore need to invest in foresight type activities in order to anticipate change and develop responses accordingly. Larger companies often invest in these types of foresight activities but smaller companies are much less likely to possess these types of strategic management skills 31. The challenge is for SMEs to gain access to the professional development and training which will allow them to predict change so that they position themselves to best respond to the future 29 Lifting Off: Implementing the Strategic Vision for UK Aerospace (ADS, 2013) 30 Going for Growth, Agri-food strategy board: A Strategic Action Plan in Support of the Northern Ireland Agri-Food Industry (2013) 31 The UK Commission's Employer Perspectives Survey 2010 (UK Commission 2010d)

41 needs of their markets and customers. Other challenges include developing financial modelling skills and good economic justification skills in a financially driven world. SMEs are focused on cash flow and keeping costs low so that they find it difficult to spend on training/development and in particular in areas which are not focused on the short term Demographic change an ageing population and migration As people live longer, the UK along with many other countries has seen a process of population ageing. The mean age of the population has risen and the proportion of the population in older age groups has increased. This has led to an ageing of the workforce. Employers thus face a labour market with fewer young people and older employees. The flow of young people joining the labour market may not be sufficient any longer to be the principal means of meeting demand for higher skills levels among the workforce. Evidence from the Royal Academy of Engineering highlights 32 that, overall, the UK will have a shortfall of engineers and that twice as many engineers are needed by 2020 as exist currently. This could mean that Northern Ireland finds it increasingly difficult to retain its graduate resource, if more opportunities become available on the mainland. Skills Implications: This implies a greater focus will be needed on retaining skilled workers and re-training the existing workforce. In addition, ageing populations will tend to need to care for elderly parents and employers will need strategies in place to allow flexible working to support this. The impact of population ageing has been mitigated by net in-migration, as immigrants are typically younger and have larger families than the resident UK population. Studies also predict an increase in overseas competition for highly qualified staff and a lack of mobility in the local skills base 33. All of these drivers, suggest that employers are going to need to have Human Resource policies in place that provide flexible working practices for staff and that they will need to be able to attract mobile highly qualified staff through appropriate remuneration packages and benefits. 32 Jobs and Growth: the importance of engineering skills to the UK economy, Royal Academy of Engineering (2012) 33 The Technology Strategy Board: 'A landscape for the future of high value manufacturing in the UK'

42 3.3.7 Government Policy- Horizon 2020 EU Commission Funding Opportunities Finally, it is worth mentioning that the European Commission has recognised the importance of the advanced manufacturing sector and has written it into the new funding programme for Horizon 2020 will be the EU Commission Framework Programme for Research and Innovation between 2014 and 2020 and the successor to the current programme (FP7) which will run until the end of Horizon 2020 will bring together all existing EU research and innovation funding currently provided through the Framework Programme for Research and Technological Development (FP7), the Competitiveness and Innovation Framework Programme (CIP) and the European Institute of Innovation and Technology (EIT). The Commission has set the Advanced Manufacturing and Processing sector as one of its priority themes and the proposed areas of funding under Horizon 2020 are: Technologies for factories of the future; Technologies enabling energy-efficient buildings; Sustainable and low-carbon technologies in energy intensive process industries; and New, sustainable business models. A further funding theme is the Space sector and the proposed areas of funding are: Enabling European competiveness, non-dependence and innovation in space activities; Enabling advances in space technologies; Enabling exploitation of space data; Enabling European research in support of international space partnerships; and Funds are available to support advanced manufacturing companies identify and develop technologies for the future. Skills Implications: To be successful in these funding opportunities companies need to build collaborative research partnerships across EU countries. Managers therefore need to have the networks across the EU to help them and the skills/ knowledge in preparing bids into Europe as well as managing collaborative networks. Traditionally Northern Ireland has not had significant success in accessing EU funds under FP7 so work is needed to build the motivation and capacity of companies to do so. 38

43 3.4 Summary The Northern Ireland Economic Strategy sets out a vision to both rebuild and rebalance the local economy, to ensure it is modern, knowledge intensive and export driven. In February 2012, the Minister for Employment and Learning classified advanced manufacturing and engineering as priority sectors given their importance to rebalancing the economy. The advanced manufacturing sector employs 10.0% 34 of the total NI workforce. It also invests in research and development and exports and therefore has a significant role to play in delivering on the economic strategy. Specific targets are set to increase manufacturing exports by 20% by 2014/15 and to increase the level of investment in business research and development. It therefore is central to the delivery of the Innovation Strategy and to meeting export targets. To do this there is a recognition that firms need to invest in the skills of their employees. The Skills Strategy Success through Skills highlights that as 75% of our 2020 workforce are already in employment, there needs to be a strong focus on upskilling our existing employees. In addition the Higher Education Strategy recognises the need to place greater emphasis on STEM related subjects to rebalance the academic profile with economically relevant subjects. Increasing the skills in the workforce is directly linked to economic prosperity of a region. It is therefore very timely that this research reviews the supply of skills against the demand and identifies any actions to ensure these are both aligned in order to support the delivery of the economic vision. 34 See Section 5: Definition of the sectoral footprint and size of the Advanced Manufacturing and Engineering services sector 39

44 4 LITERATURE REVIEW 4.1 Introduction This section includes a review of recent academic research into the supply and demand of skills in the advanced manufacturing and engineering sector in the UK and Northern Ireland. The sector has been the focus of a number of very recent pieces of research- all of which add to the overall context for the demand for skills. 4.2 Sector Skills Insights: Advanced Manufacturing, UKCES (2012) This report was produced in 2012 by the UK Commission for Employment and Skills (UKCES) and outlines the performance challenges faced in the advanced manufacturing sector 35. The report uses data from several sources; the Employer Perspectives Survey 36, the UK Commission s UK Employers Skills Survey 37, the Working Futures Database 38 and the Labour Force Survey 39. It highlights that the sector in the UK will continue to have a high demand for those with a Science, Technology, Engineering and Mathematics (STEM) background. It is also noted that the sector will have an enduring demand for people trained to Level 3, usually via apprenticeships. The number of STEM graduates has been rising in the UK, with 285,000 science graduates in 2010/11, (an increase of 14% since 2006/07), and 46,000 engineering and technology graduates (an increase of 28% since 2006/07). The main issue however, is attracting STEM graduates to employment in the advanced manufacturing sector, as individuals with these qualifications are in high demand elsewhere, such as in the financial sector; it is noted that 40% of STEM graduates in the UK are not working in STEM roles. 35 This is the area of the manufacturing sector which: is intensive in the use of capital and knowledge; requires long term investment decisions to develop processes and buy equipment; uses high levels of technology and R&D and intangible investments (such as training) to support innovation; requires a flexible workforce with strong flexible skills; and competes in international and domestic markets. 36 The Employer Perspectives Survey (2010) sampled 14,500 employers, and was used to provide evidence to stakeholders operating in the system across the four UK nations to inform policy and improve service delivery , provides UK-wide data on skills deficiencies and workforce development across the UK on a comparable basis. It involved over 87,500 interviews, as well as a follow-up survey of over 11,000 employers , a comprehensive forecast of the UK labour market. 39 A quarterly sample of privately addressed UK households which provides information on the UK labour market. 40

45 Skills mismatches in the sector have been noted, such as the ability of professionals and managers in adequately researching drivers of change in order to develop effective market strategies. This report suggests that companies will be able to overcome the various skill insufficiencies they face by engaging in training at all levels of the workforce, with 82% of manufacturing employers reporting that they had increased training as a response to skill gaps, compared to 62% for the UK as a whole. 4.3 The labour market value of STEM qualifications and occupations, Institute of Education / Royal Academy of Engineering (2011) This report by the Department of Quantitative Social Science at the Institute of Education in 2011 addresses whether STEM qualifications are really valued above other skills in the UK. Data for this report is taken from the UK Labour Force Survey (March 2004-December 2010). The report concluded that many qualifications, but not all, have an increased value for the individual (i.e. increased wages) and for the labour market, if they are in a STEM subject area, and more so in engineering. It also states that most low/intermediate STEM occupations attract additional wage premium, and some, but again not all, STEM qualifications have a significant additional value in the labour market if they are used in an STE (Science, Technology, and Engineering) occupation. It highlights the fact that it is not enough to encourage young people to study in a STEM area; they must also understand that some STEM qualifications have additional value in the labour market over others; engineering related qualifications are valued more than science related qualifications. 41

46 4.4 Employer Investment in Apprenticeships and Workplace Learning: The Fifth Net Benefits of Training to Employers Study, BIS 40 (2012) This study, undertaken by the Department for Business, Innovation and Skills, aimed to identify the costs and benefits employers can derive from apprenticeships and workplace learning, and was conducted through the completion of 79 employer case studies across eight sectors. As this is a small number however, the results from the study should only be regarded as indicative. The report found that whilst employers can encounter substantial costs in delivering training to their employees, there are a number of benefits that can be obtained from a training investment: Skills supply benefits - An inflow of new skills, resulting from the completion of a Framework or NVQ; - A need to maintain a steady stream of young people who are being trained in the occupations on which the organisation is dependent; - The provision of a group of employees who, with time, could be recruited internally as mangers or supervisors; and - A more effective method of meeting current and future skills demand than recruiting from the external labour market. Recruitment benefits - A method for attracting the best quality of recruits as a result of offering training which culminates in a widely recognised qualification; - The realisation that those who complete training with a given employer are more likely to stay with that employer; and - A means of retaining current staff by providing training that will enhance their current skills. It is also noted that while most of the costs involved in apprenticeships and workplace learning would be met by the employers, the investment can be recouped on average after 3 years and 7 months in the engineering sector. This is based on the costs of a Level 3 apprenticeship, and assumes that the employer receives an additional monetary gain as a result of increased productivity due to the provided training. 40 Department for Business, Innovation and Skills 42

47 The research identified that the net cost to the employer over the training period is 36,292 which increases to 39,582 once the costs of drop-out are accounted for. The average disguises considerable variation in training costs. Apprenticeships can cost from 30,000 to 45,000 per apprentice; the modal range appears to be around 30,000 to 40,000 per trainee. In many respects the differences are accounted for by the duration of training (whether it lasts for three or four years) and the amount of off-the-job training where the apprentice is unable to make a productive contribution. High cost employers tend to have more block release to local colleges during the first year of training leading up to the award of the Level 2 qualification, whereas the lower cost employers tend to rely more on day-release and learning on the job. The costs also relate very much to what constitutes the end of the Apprenticeship with some employers being reluctant to sign-off on the Apprenticeship until the apprentice is near 100 per cent productive relative to the fully experienced worker. One of the principal differences which can affect the costs of training is the salary paid to the apprentice which can vary considerably, for example, the researchers found that the first year salary can be from 7.8K to 12K and for year 3 can vary from 13k to 20k. 4.5 Science, Engineering and Technology Technicians in the UK Economy, Gatsby Trust (2012) This report, conducted by the National Institute of Economic and Social Research, explores some of the key issues surrounding technician employment, education and training, focusing on those involved in science, engineering and technology. The authors used statistical analysis, a literature review and case study evidence to answer the following questions: Where are SET (Science, Engineering and Technology) technicians employed in the UK economy, and what are their roles? How well does the combination of graduates and those with vocational qualifications meet the skills requirements of employers? What are the skill gaps identified by SET employers (if any)? How well do training methods in SET areas prepare trainees for employment? What are the main factors that encourage or discourage individuals in participating in SET education or training? 43

48 Labour Force Survey 41 data for 2010 shows that there were just over 1.5 million SET technicians employed in the UK, with 30% in associate professional occupations and 70% in skilled trade occupations. It is also noted that the SET workforce was ageing fast, with 31% of skilled trade workers and 23% of associate professionals aged 50 or older, at that time. Case study evidence and employer interviews suggested that employers are considering a re-evaluation of the mix of graduate and intermediate level personnel in technician jobs. This is due to a notable lack of practical experience in graduates, as most of their knowledge and skills were developed via study, as opposed to training. Therefore graduates were felt by employers to lack the necessary practical experience that would have been present in other employment training methods e.g. apprenticeships. With regards to the supply of skills, in the last 20 years the combination of occupations and qualifications in SET sectors has changed greatly due to an increased supply of university graduates, and the departure of many individuals with low-level qualifications. The number of graduates in SET technician 42 employment has seen an increase, with 27% of associate professionals and 16% of skilled trades having a degree qualification. 4.6 Jobs and Growth: the importance of engineering skills to the UK economy, Royal Academy of Engineering (2012) Commissioned by the Royal Academy of Engineering, this report focuses on providing evidence of the value of engineering skills to the UK economy, and addressing the concern over the current lack of such skills. It states that a variety of sectors are dependent on engineering skills to some degree, including electricity production, water and sanitation, transportation, process manufacture, nuclear engineering, electronics, food manufacture, software and healthcare services. The report highlights that the demand for employees in the SET sector exceeds the supply, with this demand set to increase with the return of economic growth 43. Evidence for this was derived from econometric research in five key areas: 1. The number of working-age people self-declaring in the Labour Force Survey as working in SET occupations; 2. An analysis of 20 broad economic sectors to identify the concentration of SET occupations in each; 41 Labour Force Survey (2010) data. 42 The main occupation groups which include technician level jobs are associate professional and technical occupations, and skilled trades occupations. 43 UKCES Working futures , UKCES, December

49 3. An analysis of the labour market returns to SET occupations and STEM qualifications; 4. An analysis of the signals of demand for SET occupations in the economy and forecasts of future demand for engineering skills in particular; and 5. An analysis of the supply of STEM qualified people in England and the UK more widely. The research examines the structure of the UK economy, comparing it to competitor nations, and inspects the evidence for connections between education, skills, productivity and growth. The study concludes that SET occupations and STEM qualifications are of significant value to those who have them, as the demand is universal across the economy. This is shown via a persistent wage premium, which has increased in value over the past 20 years for those who have an engineering degree. There is also a high demand for STEM graduates, and in some cases, this demand again exceeds the supply. Previous analysis of the UKCES forecasts (UK) suggests that the combined replacement/expansion demand for SET occupations throughout will total 830,000 professionals and 450,000 technicians. Therefore there is a requirement of over 100,000 STEM graduates per year during , and with approximately 90,000 currently graduating per year, this target will not be met. 4.7 The Supply and Demand for High Level STEM Skills, UKCES (2011) This paper, compiled by the UKCES, reviews the supply and demand for STEM skills in England in It considers evidence from Oxford Economics and Consulting Inplace, as well as results from the National Employers Skills Survey 2009 (NESS09) 44. With regard to the demand for STEM skills, the report shows that there were almost 3.9 million people in STEM occupations in , and 2.4 million in graduate occupations in the UK. The number of STEM degree holders in 2010 exceeded the number of STEM graduate jobs. One reason given for the difference in supply and demand is that many STEM graduates do not enter into a STEM occupation upon completion of higher education (40% did this in 2008/09). 44 National Employer Skills Survey 2009, conducted by the UKCES and surveying over 79,000 employers. 45

50 Evidence from the NESS09 shows that 12% of employers across all sectors felt that their graduate recruits were not well prepared, citing a lack of specific skills, such as life experience, technical or job-specific skills, and poor attitude and motivation as reasons for this. Recommendations for combating the unmet demand for graduates include a more articulate skills dialogue between research and development businesses and universities, and increased business involvement in, and collaboration with, higher education. Several initiatives have been set up in schools and HE institutions in order to promote science and STEM subjects, respectively, including: National Science Learning Centres: These centres provide continuous professional development (CPD) opportunities for science teachers and technicians, with the aim of making science subjects more interesting for the pupils; and STEMNET 45 : a programme which aims to inspire young people by providing them with enrichment activities in STEM subjects, including afterschool societies and a STEM Ambassadors programme. 4.8 Manufacturing in the UK: An economic analysis of the sector, BIS (2010) This report, compiled by BIS, analyses the manufacturing sector in the UK, including a review of skills capabilities across the sector. It notes an improvement in education levels, with 17.1% of manufacturing workers having a degree, compared with only 9.7% in Similarly, 53.5% of employees held an NVQ Level 3 or above in 2009, which is an increase from 45.8% in This can be attributed to an upskilling of individuals across all occupational groups, and a focus on more highly skilled occupations. Skills and training may also cause externalities, meaning that other firms may benefit from investment in an individual s skills by a firm. For example, companies in a collaborative arrangement may all benefit from the decision of one partner to hire a skilled worker, or the poaching of highly skilled workers from one firm to another may cause R&D knowledge spill overs. This type of externality is notably more common in knowledge intensive industries, such as high tech manufacturing. Therefore benefits to the wider economy from investment in skills may exceed private benefits to individuals and firms. 45 This programme operates across the UK including Northern Ireland see section BIS calculations based on ONS Labour Force Survey data 46

51 Due to the unpredictability of modern manufacturing, it is difficult for employers to forecast employment opportunities that will arise in future, and therefore the knowledge and skills that will be required. This uncertainty may discourage employers from investing in skills and training, as the costs for training may result in it being wasted. 4.9 Employer Ownership of Skills: Building the Momentum, UKCES (2013) In this report, the UK Commission for Employment and Skills highlights the importance of building employer ownership into designing any upskilling programme. It is based on the learnings from 37 pilot projects set up in 2011 to encourage employers to take the lead in improving skills and employment in their sectors, and from this are the principles that need to be followed to promote employer ownership. These are as follows: Employer ownership and responsibility drives jobs and growth: Creating the conditions that encourage the best employers to step up and work with their employees, trade unions, colleges and training providers to take end to end responsibility for workforce development in their industry will drive ambition, quality and better utilisation of skills. Customer focused and outcome driven ensures that businesses and people are at the heart of how the skills system operates: Designing services with a relentless focus on customers will create a responsive system that uses outcomes as the measure of success - more and better jobs for people and jobs better done for business. Alignment of strategy and investment leverages more and better outcomes: Routing the public contribution through the employer will create a single market for skills where supply responds to genuine demand and public investment leverages greater private investment. Simple and transparent systems engage customers: Developing accessible and simple structures will give customers confidence to engage with the skills system and transparent public investment enables employers and employees to value government s contribution to developing people. Collaboration delivers relevant skills for jobs and growth: Incentivising greater collaboration between employers, unions, colleges/ training providers and business networks will deliver higher quality vocational learning. Through such collaboration we are better able to reach and engage with small and medium enterprises. Colleges become key stakeholders within local economies, and teaching and learning is a core driver of local growth and prosperity. 47

52 The report makes it clear that it is essential to ensure there is employer ownership of any skills issue and of the proposed solutions if they are to be successful. This is clearly an issue with regard to tackling sales and marketing skills/ resources gap Low skills equilibrium and the Importance of Innovation, University of Warwick (2008) 47 This report was produced by the University of Warwick after reviewing the Manufacturing sector and the different approaches used by companies to skills development and investment. They developed the term Low Skills Equilibrium (LSEq) to describe a situation in which companies are involved in a vicious circle of producing low value add goods and services with low profit margins and there is insufficient cash to train the employees to move out of the situation. LSEq describes a situation where an economy becomes trapped in a vicious circle of low value added, low skills and low wages 47. In contrast high skills equilibrium is characterised by a strong demand for the product/ services which in turn require enhanced skills levels. The term LSEq has been used to describe a macro scale phenomenon (as across a national or regional economy or a sector) or a micro scale situation (in terms of the position facing a particular company or organisation). Both are relevant in this study as certain food products/services have experienced low demand and then high demand/ high supply in other sectors leading to different training outcomes. The report highlights that for companies experiencing LSEq simply improving the supply of skills is unlikely to be a solution. For an organisation to successfully adopt innovative products/services and organisational practices that could help break out of such a situation, an increase in the demand for skills would be required. In order to break out of the LSEq it is necessary to raise employers demand for skills. The demand for skills is a derived demand, depending on the overall level of economic activity and the profile (in sectoral and occupational terms) of that activity. The demand for skills can be increased by companies moving up the value chain through enhancing the specification of goods and services produced and in doing so increasing their value add and profit margins. As increasing 47 Reproducing but Potentially Challenging the Low-skills Equilibrium: A Study of Small Food Manufacturing Firms in the UK by Paul Edwards University of Warwick, Sukanya Sengupta Cardiff Business School and Chin-Ju Tsai Royal Holloway London

53 numbers of businesses adopt high value added skill intensive patterns of behaviour, so the demand for skills is raised. The report states that government policy is critical to supporting development of clusters and promoting innovation in order to help organisations adopt business strategies that involve moving up the value chain Barriers to Investing in Training Skills development is one of the ways in which to support innovation in companies but there are a number of barriers to training. The main reason 48 cited by 66% of employers who had not provided any training in the previous 12 months was that there was no need, predominantly because their staff where fully proficient. Other issues cited related to the expense of training, time issues, training supply issues (e.g. relating to the availability and quality of courses available locally). Hogarth et al 49 cite issues indicative of a lack of ambition as key to the lack of training, including: Management skills it is highly skilled managers who are more likely to develop higher value-added product/service strategies which in turn have implications for skills and training; Management capacity a lack of management time to devote to strategic issues; and a related issue of: Short-termism a focus on immediate requirements and/or only on that training that is immediately available; Influence of staff on training claims that staff may be unwilling to undertake training; and Imperfect information on the nature and quality of training available and the value of that training to the employer. NESS09 reveals that approximately half of employers would have liked to have provided more training over the previous 12 months than they in fact undertook. The main reasons for not doing so were related to expense (i.e. the cost of training/lack of funds) and that they could not spare staff time, cited by 60% and 28% of respondents, respectively. 48 Identified in NESS09 for not providing training. 49 Hogarth, T.; Gambin, L.; Hasluck, C.; de-hoyos, M. & Owen, D.W. (2009a). Maximising Apprenticeship Completion Rates. Coventry: Learning and Skills Council, Hogarth, T.; Bosworth, D.; Gambin, L. & Wilson, R. A. (2009b). Review of Collective Measures: Empirical Review. Wath-upon-Dearne: UK Commission for Employment and Skills. 49

54 4.12 UK Commission s Employer Skills Survey 2011, UK Results (2012) The UK Commission s Employer Skills Survey 2011 is the key UK data source on employer demand for and investment in skills. This report provides the 2011 results from Northern Ireland s employers on their skills challenges, recruitment and training activities and looks back at the earlier Northern Ireland Skills Monitoring Surveys (NISMS) allowing time-series comparisons from 2005 and Table 4.1 below highlights the type of training funded or arranged by organisations in the manufacturing sector. Nearly half of organisations (46%) in the sector provide no training at all for employees. Only one in four (24%) of manufacturing organisations provide both on and off-the job training for employees. Table 4:1: Percentage of Manufacturing organisations funding or arranging training in Northern Ireland, 2011 Training type provided Off and On-the-job training 24.0% % of Manufacturing organisations funding or arranging training Off the job training 14.0% On-the-job training 16.0% No training provided 46.0% Source: UK Commission s Employer Skills Survey 2011: UK Results (2012) Table 4.2 below highlights the fact that manufacturing SMEs (with less than 50 members of staff) invest less in training than larger organisations. 38% of SMEs provided no training at all to employees while medium sized enterprises provide some form of training for 95% of their employees. Medium sized firms provide both on and off-the-job training for 3 out of every 4 employees (75%) while SMEs only provide on and off-the-job training for less than one in three employees (31%). 50

55 Table 4:2: Percentage of Organisations funding or arranging training by Size of Organisation in Northern Ireland, 2011 Training type provided 1-49 staff 50+ staff Off and on-the-job training 31% 75% Off the job training 14% 7% On-the-job training 16% 13% No training provided 38% 5% Total 100% 100% Source: UK Commission s Employer Skills Survey 2011: UK Results (2012) The smaller the employer, the less likely it is to have delivered any training in the last 12 months. Where smaller employers have provided training during the last 12 months it is much less likely to have involved both on-the-job and offthe-job training than was the case for larger establishments. It is also evident that smaller employers who trained tend to train a smaller proportion of their workforce than is the case for larger establishments. There is a negative association between training expenditure per trainee and employer size, with smallest establishments spending most per trainee and larger establishments the least per trainee. The economies of scale that larger employers can command and the fact that they are more likely to have access to internal training facilities and dedicated training staff are probably part of the explanation for these differences by size. Smaller employers were more likely than larger employers to believe that there was no need for training because their staff members were fully proficient. All other issues cited are much less significant. Time issues are somewhat more pressing amongst the smallest than the largest employers. The proportion of employers citing issues relating to the expense of training and to training supply are similar across different size bands Importance of Generation Y to Advanced Manufacturing, Deloitte Report (2004) According to a 2004 study 50, the needs of Generation Y can be very different from those of existing workforce generations (Veterans, Baby Boomers, and Generation X). The study s findings indicate that manufacturing firms need to consider the following needs of Generation Y: 50 Managing the Talent Crisis in Global Manufacturing Strategies to Attract and Engage Generation Y, Deloitte (2004). 51

56 Long-term career development and multiple experiences within a single organization; Sense of purpose and meaning in work; Availability and access to mentors across the company. (The focus should not only be on making senior staff mentor younger associates, but also ensuring that people connect and share experiences across all levels of the organization, and across relevant departments and areas of expertise.); Work-life flexibility; Tech-savvy work environment (for example, access to online problemsolving and learning tools); and Open social networks that embrace open and honest Communication Summary of Literature Review The literature that has been reviewed in this section of the report highlights the following key areas for the advanced Manufacturing and Engineering Services sector: Value to the Economy: The literature covered in this section highlights the importance of STEM skills to any growing economy, and particularly those in engineering. Employees with STEM qualifications can earn more if they are working in Science, Technology or Engineering occupations, rather than other occupations. There is however an issue of the attractiveness of careers in advanced manufacturing and engineering as approximately 40% of UK STEM graduates work in Financial Services and other careers. Gaps and Skill Mismatches: The Royal Academy of Engineering has estimated that there will be a shortfall of over 1,000 STEM graduates per annum ( ) across the UK. If this is the case, then Northern Ireland could experience a brain drain of its best engineering talent to other parts of the UK, where they do not have sufficient numbers of graduates being produced. Actions to minimize this risk are contained in section 11: consultations and focus groups. Whilst demand for STEM graduates is expected to outstrip projected supply across the UK, there are concerns that there are skills mismatches- between the skills graduates have and those needed by industry. UK Employers have raised concerns about the quality of graduates coming out of Higher Education Institutions regarding the lack of practical experience. Replacement Demand: Research on the supply of skills to the sector, shows that the workforce in Science, Engineering and Technology occupations is ageing with 31% of skilled workers and 23% of associate professionals aged 50 52

57 or over (based on 2010 data). This growing older workforce could mean high replacement demand levels and therefore greater emphasis will need to be placed by employers on how they can attract new workers, if they are to avoid skills shortages and / or how they retain their older workforce longer than might normally have been expected. The human resource policies and practices of companies with regard to training / development for new workers and flexible work patterns for existing workers will play a large role in attracting and retaining workers. Investment in Training: Company training and development is seen as key to attracting talent to any company and particularly so for advanced manufacturing and engineering companies where there is a high demand for these skills. There are benefits to the companies involved as they get skilled personnel that meet their needs and often find it easier to recruit people. Also other more public benefits include the spillover impacts generated for companies involved in collaborative working in that they may get access to the skills of other companies in the group. Small-medium enterprises (SMEs) are much less likely to invest in training methods for their employees compared to medium-sized firms, with 38% of SMEs providing no training at all. The firms ability to generate profit is crucial to their ability to invest in their employees training / development. Many advanced manufacturing companies have seen their margins squeezed and some have moved into customized production to survive against cost competition from the Far East. To do so they will need staff with not only engineering but also IT systems knowledge and experience and the ability to network and collaborate with others across their supply chains. Other companies in the sector have high value products which allow them to generate higher profits, which can be used to develop the skills base. Innovation is therefore central to the sector s ability to grow and develop its employee base. Companies therefore need senior managers with the ability to think and plan ahead, identify business opportunities, reduce costs, manage IT and work collaboratively. 53

58 5 DEFINITION OF THE SECTORAL FOOTPRINT AND SIZE OF THE ADVANCED MANUFACTURING AND ENGINEERING SERVICES SECTOR 5.1 Introduction In order to adequately assess the footprint of the sector, it is necessary to define which industries are included within the umbrella term advanced manufacturing and engineering services. For the purposes of statistical modelling and comprehensive analysis, the Standard Industrial Classification (SIC 2007) codes will be used to demonstrate which industry groups are relevant. Using SIC codes is necessary in order to make use of published data however there are difficulties in using them. In Northern Ireland, the Aerospace sector makes up a significant contribution to our economy but this is masked through the fact that the aerospace and automotive sectors fall under the SIC codes 30.0 Manufacture of other transport equipment and 29.0 Manufacture of motor vehicles, trailers and semi-trailers respectively. To take account of this issue, we have included detailed information in the most relevant sectors that have strategies developed setting out how they can contribute to the local economy in section Defining the Sector Standard Industrial Codes (SIC) The industries listed in Table 5.1 are based on the SIC codes of sectors which relate directly to the advanced manufacturing and engineering sector. The list was finalised with assistance from SEMTA, Colleges NI and MATRIX 51. The SIC codes of these industries have been used throughout the report and by the Working Futures Model 52 which projects the demand for skills as measured by occupations and qualifications. 51 Northern Ireland Science Industry Panel 52 Developed by Warwick Institute for Employment Research (IER) and Cambridge Economics (CE). 54

59 Table 5:1: Standard Industrial Classification SIC (2007) Description 10.0 Manufacture of food products 11.0 Manufacture of beverages 12.0 Manufacture of tobacco products 13.0 Manufacture of textiles 16.0 Manufacture of wood and of products of wood and cork, except furniture 18.0 Printing and reproduction of recorded media 20.0 Manufacture of chemicals and chemical products 21.0 Manufacture of basic pharmaceutical products and pharmaceutical preparations 22.0 Manufacture of rubber and plastic products 23.0 Manufacture of other non-metallic mineral products 24.0 Manufacture of basic metals 25.0 Manufacture of fabricated metal products, except machinery and equipment 26.0 Manufacture of computer, electronic and optical products 27.0 Manufacture of electrical equipment 28.0 Manufacture of machinery and equipment n.e.c Manufacture of motor vehicles, trailers and semi-trailers 30.0 Manufacture of other transport equipment 35.0 Electricity, gas, steam and air conditioning supply 36.0 Water collection, treatment and supply 37.0 Sewerage 38.0 Waste collection, treatment and disposal activities; materials recovered 39.0 Remediation activities and other waste management services 55

60 The report, Analysis of the Engineering Sector in Northern Ireland, utilises a definition from the Sector Skills Council for Science, Engineering, and Manufacturing Technologies (SEMTA) to define the footprint for the sector 53. It should be recognised that advanced manufacturing and engineering services have the potential to be cross-cutting in scope. For example, the sectoral footprint defined by SEMTA excludes advanced engineering in important industries such as the manufacture of food products (SIC 2007 code 10). Therefore, for the purposes of this research, the broad profile of advanced manufacturing and engineering industries in Table 5.1 will be used throughout the remainder or the report. In order to facilitate a detailed analysis of the sector in Northern Ireland and its skill needs, quantitative analysis will focus on occupations. The Standard Occupational Classification system 2010 (SOC 2010) will be used for this. However not all of these occupations will relate directly to the advanced manufacturing and engineering SIC codes we have defined in Table 5.1. As such, analysis of the sector will focus initially on employment and trends for the SOC codes directly involved in the advanced manufacturing and engineering sector (based on Table 5.1). These SOC codes include: 11 Corporate managers and directors; 12 Other managers and proprietors; 21 Science, research, engineering and technology professionals; 31 Science, engineering and technology associate professionals; 52 Skilled metal, electrical and electronic trades; 54 Textiles, printing and other skilled trades; 81 Process, plant and machine operatives; and 82 Transport and mobile machine drivers and operatives. We will then focus on employment and trends for the broader occupation groups covered in Table 5.2 overleaf: 53 Sector Skills Assessment for Science, Engineering and Manufacturing Technologies (The National Skills Academy for Manufacturing, 2010) 56

61 Table 5:2: Standard Occupational Classification (SOC) 2010 (SOC) Standard Occupational Classification (SOC) 2010 Sub-Major Groups 11 Corporate managers and directors 12 Other managers and proprietors 21 Science, research, engineering and technology professionals Health professionals 23 Teaching and educational professionals 24 Business, media and public service professionals 31 Science, engineering and technology associate professionals 32 Health and social care associate professionals 33 Protective service occupations 34 Culture, media and sports occupations 35 Business and public service associate professionals 41 Administrative occupations 42 Secretarial and related occupations 51 Skilled agricultural and related trades 52 Skilled metal, electrical and electronic trades 53 Skilled construction and building trades 54 Textiles, printing and other skilled trades 61 Caring personal service occupations 62 Leisure, travel and related personal service occupations 71 Sales occupations 72 Customer service occupations 81 Process, plant and machine operatives 82 Transport and mobile machine drivers and operatives 91 Elementary trades and related occupations 92 Elementary administration and service occupations Source: Working Futures 4 (Institute for Employment Research, University of Warwick) 57

62 5.2.2 The Working Futures Model The Working Futures model projects the demand for skills as measured by occupations and qualifications. In developing the Working Futures Model, Institute for Employment Research (IER) and Cambridge Economics (CE) developed a detailed employment database covering all the main employment dimensions. This was based on the 41 SIC (2007) based categories used in the CE multi-sectoral macroeconomic model RMDM 54. These were cross-classified by the 25 sub-major occupational groups of SOC2010, and by the 12 nations and regions of the UK, plus gender and status. This database has been developed over many years and is as consistent as possible with all the official published sources upon which it is based. When the model was published, the Working Futures evidence report articulated some of the key macroeconomic factors which represent risks and uncertainties in the forecasts. Amongst these are: The general economic stability of the UK; Global economic stability; Inflation rates; Sovereign debt crisis in the Eurozone; Value of currency; and UK Financial policy. In developing the Working Futures projections, a number of assumptions were made which are embedded in the regional macroeconomic model. These included assumptions based around the following areas: Prospects in the world economy; Government policy including taxation and expenditure; UK competitiveness including the exchange rate and relative inflation rates in the UK and the rest of the world; and Demographics. 5.3 Size of the Sector The size of the advanced manufacturing and engineering sector in Northern Ireland is detailed in Table 5.3. This shows the levels of employment from 2007 and the project levels of employment until 2020 for all of the SOC codes included in Table Regional Macroeconomic Model 58

63 The advanced manufacturing and engineering workforce currently employs approximately 79,580 people. Overall the level of employment in Northern Ireland s advanced manufacturing sector is projected to decrease by 10.6% between 2007 and Despite the recent increase in employment figures from 77,000 in 2009 to 79,580 in 2013, there is generally a small downwards trend (down 1.2%) in employment figures for advanced manufacturing from 2013 to This declining trend does not correlate with Northern Ireland employment figures for all industries, as Table 5.3 indicates a 4.3% increase in total employment figures in all industries between 2013 and Table 5:3: Number of Employees in the Advanced Manufacturing and Engineering Sector in Northern Ireland compared to Number of Employees in all Northern Ireland Industries Year Employment in Advanced Manufacturing 55 Employment in all industries , , , , , , , , , , , , , , , , , , , , , , , , , , , Source: Working Futures Data 2010 and 2020 % of employment in Advanced Manufacturing 55 Includes SIC codes in Table 5.1 for all SOC groups. 56 Includes all industries in Northern Ireland. 59

64 Table 5.4 below shows the composition of the advanced manufacturing sector by each sub-sector in 2010 and the projected change for In 2010, the Food manufacturing sector employed almost a quarter (23.4%) of the advanced manufacturing sector in Northern Ireland. Other major contributing sectors include metal and basic metal products (11.0%), rubber and plastics (8.6%) and other transport equipment (i.e. aerospace. 8.4%). The projected composition changes for the sector identify no major changes for 2020, with the waste management sub-sector experiencing the most growth (1.9%). The employment for the other non-metallic sub-sector is projected to decrease by 1.6% which is the largest projected decline in the advanced manufacturing and engineering sector. Advances in technology are likely to be the key reasons for the decline in these sectors. Table 5:4: Sub-sector Composition of the Advanced Manufacturing and Engineering Sector in Northern Ireland and Projected Composition Change Sub-Sector Waste management Numbers in employment for Advanced Manufacturing and Engineering Sector (2010) Composition % of Advanced Manufacturing and Engineering Sector (2010) Numbers in employment for Advanced Manufacturing and Engineering Sector (2020) 4, , Projected Composition % of Advanced Manufacturing and Engineering Sector (2020) Sewerage Water Electricity and gas Other transport equipment (e.g. aerospace) Reproduction recorded media and printing 1, , , , , , Machinery n.e.c 4, , Electrical equipment 3, , Pharmaceuticals 1, ,

65 Sub-Sector Computer equipment Metal products / Basic metals Other nonmetallic Rubber and plastics Motor Vehicles etc. Numbers in employment for Advanced Manufacturing and Engineering Sector (2010) Composition % of Advanced Manufacturing and Engineering Sector (2010) Numbers in employment for Advanced Manufacturing and Engineering Sector (2020) 3, , , , , , , , Projected Composition % of Advanced Manufacturing and Engineering Sector (2020) Wood 3, , Chemicals 1, , Textiles 2, , Beverages and Tobacco 1, , Food products 18, , Total 78, , Source: Working Futures Data Contribution of Advanced Manufacturing and Engineering sector to NI economy GVA and Employment Table 5.5 overleaf identifies the Gross Value Added (GVA) and turnover within specific SIC code ranges related to advanced manufacturing and engineering 57 for 2010 and GVA is the value generated by any unit engaged in a production activity. It is measured at current basic prices, excluding taxes (fewer subsidies) on products. GVA plus taxes (fewer subsidies) on products is equivalent to Gross Domestic Product (GDP) See Table 5.1: Standard Industrial Classification.Table 5:1: Standard Industrial Classification 58 Office for National Statistics, (2012). 61

66 Overall there was a turnover of 17.9 billion from the sectors related to advanced manufacturing and engineering for This indicates a 6.5% increase from the previous year. The total GVA for the three industries was 4.5bn which indicates a 5.9% decrease from the previous year ( 4.8bn). It is evident that Manufacturing has been a key driver in this reduction with its contribution to GVA falling from 4.32bn to 3.98bn. It is likely that the reduced international demand for products and the recession over this period has been a key factor in explaining this reduction. The water supply, sewerage, waste management and remediation activities industry experienced the greatest improvement in GVA between 2010 and 2011 with a 24.6% increase despite a fall in turnover of 3.4%. The electricity, gas, steam and air conditioning supply industry experienced a 3.6% increase in turnover during The industry also improved the GVA for 2011 by 3.2%. 62

67 Table 5:5: Turnover, GVA and Employment for Advanced Manufacturing by Standard Industrial Classification (2011) Standard Industrial Classification Turnover ( million) Gross Value Added (GVA, million) % change % change Manufacturing 59 15,306 16, % 4,322 3, % Electricity, gas, steam and air conditioning 1,119 1, % % supply 60 Water supply, sewerage, waste % % management and remediation activities 61 Total 16,885 17, % 4,876 4, % Source: Results from the Northern Ireland Annual Business Inquiry 2011, Department of Finance and Personnel (2013) 59 Note: this data for Manufacturing will include each of the SIC codes Note: this covers the data for SIC code Note: this covers the data for SIC code

68 5.5 Advanced Manufacturing and Engineering Sales and Exports 2011/2011 for Northern Ireland The DETI survey 62 completed in 2012 shows that the total sales by manufacturing and engineering companies in Northern Ireland were estimated at billion which indicated a 6.5% increase from the previous year ( billion) 63. Total exports from the advanced manufacturing and engineering sector was approximately 4.2 billion which represented a 7.7% increase from 2010/2011. Table 5.6 gives a summary of the share of sales and exports by industrial division and the annual change in exports by industrial sector, respectively (note that the figures may not add exactly due to rounding). 62 Results from the Northern Ireland Manufacturing Sales & Exports Survey 2011/12, DETI (2012) 63 Note this data was adapted to include only the sectors that comprise advanced manufacturing and engineering. The sector SIC codes from 35 to 39 are not included. 64

69 Table 5:6: Share of Sales and Exports by Industrial Division 2011/12 Industrial Sector Total Sales (provisional) Total Sales ( m) % Total Sales External Sales (provisional) External Sales ( m) % External Sales Exports (provisional) Exports ( m) % Exports 10.0 Food, beverages and tobacco 8, % 6, % 1, % 0.0% 13.0 Textiles % % % 83.5% % change in exports from 2010/ Wood and products of wood and cork 18.0 Printing and reproduction of recorded media % % % 15.2% % % % 7.5% 20.0 Chemicals and chemical products % % % 1.0% 21.0 Pharmaceutical % % % 15.3% 22.0 Rubber and plastics % % % 1.7% 23.0 Non-metallic minerals % % % -25.3% 24.0 Basic metals % % % 41.3% 25.0 Fabricated metal products % % % 55.3% 26.0 Computer, electronic and optical % % % 18.2% 27.0 Electrical equipment % % Disclosed Disclosed Disclosed 65

70 Industrial Sector Total Sales (provisional) Total Sales ( m) % Total Sales External Sales (provisional) External Sales ( m) % External Sales Exports (provisional) Exports ( m) % Exports 28.0 Machinery and equipment n.e.c. 1, % % % 15.3% 29.0 Motor vehicles and trailers % % % 2.0% % change in exports from 2010/ Other transport equipment (e.g. aerospace) % % % -5.6 Other manufacturing % % % 14.3% Total 15, % 12, % 4, % 7.7% Source: Results from the Northern Ireland Manufacturing Sales & Exports Survey 2011/12, DETI (2012). 66

71 3 Table 5.6 identifies the Food, Beverages and Tobacco sector as the largest sector in terms of sales ( 8,579, 53.8%) in 2011/12. The same sector also contributed almost a quarter (24.4%) of the total advanced manufacturing and engineering exports. The other main exporters by sector included Other Transport Equipment 64 (16.7%), Machinery and Equipment N.E.C (15.9%), Computer and electrical equipment (11.8%) and rubber and plastics (9.5%). In terms of growth in exports, the Textiles sector has experienced the most growth between 2010/11 and 2011/12 (+83.5%). The Basic Metals and Fabricated Metals sectors have also experienced growth in exports of 41.3% and 55.3% respectively. Despite being the largest sector in terms of sales and exports, the Food, Beverage and Tobacco sector has remained the same in the 2010/ /12 period. The Non-metallic minerals sector has experienced the greatest decline in exports, with a fall of 25.3% in total. 5.6 Growth Potential by Sub-Sector There are a number of sub-sectors which are recognised as being particularly important in employment and growth prospects and these are detailed below Aerospace The Aerospace sector is crucial to the Northern Ireland economy providing more than 8,000 direct high value jobs and an estimated further 9,600 indirect jobs to the advanced manufacturing and engineering industry 65. The aerospace sector is classified under the SIC code Other transport equipment which makes up 8.4% of the advanced manufacturing and engineering sector. The sector currently contributes 900m in revenues per year to the Northern Ireland economy, making it one of the top aerospace regions in the UK 65. There are currently 62 employers in the aerospace engineering sector 66. The Northern Ireland Growth Partnership report aims to more than double Northern Ireland sector revenues for the sector to over 2bn per year and to grow direct employment from 8,000 to 12,000 high value positions over a 10 year period from October This includes Aerospace engineering. 65 Together Growing NI Aerospace, Defence, Security and Space Industry (Northern Ireland Growth Partnership, 2013). 66 Aerospace Northern Ireland, Invest NI. 67

72 3 The UK aerospace sector has a 17% global market share, making it the number one aerospace industry in Europe and globally second only to the US. The sector creates annual UK revenues of over 24bn. Northern Ireland contributes around 900m to this total and therefore in scale is one of the top aerospace regions. Bombardier, B/E Aerospace, Aero Engine Controls, RLC Group, Magellan Aerospace and Survitec all have substantial operations in Northern Ireland that supply many aerospace programmes worldwide. There is also a very strong aerospace supply chain cluster with over 40 companies supplying components to programmes like the Bombardier CSeries, Airbus A320 and Boeing 737. Other sub-sectors related to aerospace include space, defence and security. The UK's space sector contributes 9.1 billion a year to the UK economy and is growing at rate of almost 7.5% each year. This is a new and exciting sector for Northern Ireland. Invest NI recently commissioned a survey of the sector which showed that 13 companies are already doing business directly in the space sector. Queens University and the University of Ulster are both creating world class research in application of space technologies. Also many Northern Ireland companies are developing 'downstream' applications from data received from space satellites. Northern Ireland manufactures and supplies the defence sector with a variety of products ranging from missiles to military clothing. Thales, with a major facility in Belfast specialising in short range complex weapons and launcher systems, is the largest company in the defence sector. Northern Ireland has a strong reputation for security products with 75 companies providing a wide range of public security equipment and services including access control, protective armament, cyber security, covert technologies and security training. The UK Aerospace Industrial Strategy 67 sets out a programme of action, including increased investment in the sector. The Aerospace Growth Partnership (AGP), Government and industry have developed a shared vision for UK s aerospace industry to: 67 Lifting Off: Implementing the Strategic Vision for UK Aerospace (Aerospace Growth Partnership, 2013) 68

73 3 Ensure that the UK remains Europe s number one aerospace manufacturer and that it remains second only to the United States globally. This is an ambitious and challenging goal, given intensifying international competition and the rapid pace of innovation in the sector; Support UK companies at all levels of the supply chain to broaden and diversify their global customer base. This will be critical given the entry into the market of new manufacturers of large civil aircraft across the world; and Provide long-term certainty and stability to encourage industry to develop the technologies for the next generation of aircraft in the UK. To this end, Government and industry have agreed to fund jointly the creation of a UK Aerospace Technology Institute. This brings the opportunity to secure up to 115,000 jobs in aerospace and its supply chain in the long term. The UK Strategy states that current skill levels of existing staff are below what is required and there is a major challenge in up-skilling a large percentage of the workforce. Currently 40% of the aerospace sector workforce are qualified to N/SVQ level 4+; however, the sector s target is to raise this to 50% by Reaching this target will not be possible through the employment of graduates alone and will therefore require an increase in higher apprenticeships to raise the skills of existing workers. Northern Ireland has developed a Draft Northern Ireland Strategy and the areas identified for action are set out as follows: Identify key skills e.g. CADCAM, Stress Engineers, Aerodynamics etc.; Review of the Northern Ireland apprenticeship programme; Implement CNC Machining conversion course; Develop University STEM Scholarships and Industry Placements programme; Determine the barriers that impact employers from recruiting apprentices and graduates; Engage young people in the sector in a coordinated programme including the Schools Rocket Challenge, STEM Ambassadors, Bombardier Flight Experience and engaging with Careers and Science & Technology teachers; Northern Ireland to be the first region to launch a GCSE specifically for the sector. Space, Science and Technology Qualifications and Credit Framework (QCF) Level 2 approved by OFQUAL to be piloted in Northern Ireland starting in September 2013; and Ascertain the demand and appropriate model for an Aerospace Academy. 69

74 3 Work has progressed on all of the above, with all in the process of development Agriculture and Food The food and drink manufacturing sector accounts for approximately 25% 68 of the total manufacturing workforce employed and contributes 529m 69 to Northern Ireland s GVA. There are over 400 food and drink processing organisations and the sector is a key contributor to Northern Ireland trade balances as it is a net exporter of finished meat products and milk. Almost a quarter (24.4%) of Northern Ireland s exports are from the food, beverages and tobacco sector. The Going for Growth agri-food strategy 70 has projected a total of 25,000 employees to be working directly within the agri-food sub-sector by The projected GVA by 2020 is 1.04billion, almost double what it is currently. The strategy also projects increased numbers of higher skilled occupations such as managers and professionals will be needed in the future. In order to harness the enhanced skill levels that will be required to fill these higher skilled occupations, the Going for Growth strategy has highlighted a number of recommendations to reduce any skill gaps in the sector by 2020: All Agri-Food skills and entrepreneurship development must be the responsibility of a single dedicated group which must match provision to requirements; Introduce a programme which includes food in the education curriculum at pre-school, primary and secondary level to enhance the understanding of agriculture and food and examine the scope for development of primary and secondary level curriculum based training in Agriculture and Food to GCSE exam level; There should be a significant increase in training places in Agri-Food at all levels. Industry will commit to provide placements for all industry trainees including farm apprenticeships and farm management development 68 Approximately 19,000 employed directly and 80,000 indirectly by the agri-food sector. 69 Identification of Priority Skill Areas for Northern Ireland, NIAES (2011) 70 Going for Growth, Agri-food strategy board: A Strategic Action Plan in Support of the Northern Ireland Agri-Food Industry (2013) 71 Note: this includes the whole agri-food sub-sector, not just occupations relating to advanced manufacturing and engineering. 70

75 3 opportunities for those currently being trained in CAFRE, as an integral part of their development; Industry will commit to provide training to careers staff on Agri-Food training opportunities; and Industry will provide ICT skills development and infrastructure on farms to support the implementation of revised business models. The agri-food sector will require individuals with skills in physical sciences, ICT, food technology and safety, environmental technology, biotechnology and human nutrition. There will also be a need for a broad base of engineering skills (mechanical, electrical and computing) to ensure efficient design, operation and maintenance of many of the machines required by the industry. The Food and Drink Manufacturing Action Plan 72 targeted three main areas: To coordinate existing resources and activities within the sector to meet current and future skills needs; To advise, design, develop, test, trial and evaluate new interventions which are able to meet existing and future skills needs within the sector; and To act as a Champion for the sector. Through the Future Skills Action Plan, employers from the sector, education representatives and government will work together to develop and implement solutions to address the skills gaps of the existing workforce and to raise the skills levels of new entrants. In addition, the group will work with schools, colleges and universities to ensure that young people are aware of the many career opportunities available within this sector. In order to improve the skill provision in Northern Ireland s food and drink sector the Group will: Utilise existing training to improve the management and leadership skills of staff at all levels of management; Develop a management programme for junior managers with the potential to become future leaders within the food and drink industry; Employers and education providers working together to ensure that appropriate levels of science-based technical knowledge are included in degree courses; and Employers encouraging their workforce to avail of Essential Skills training. 72 Future Skills Action Plan for Food and Drink Manufacturing and Processing (DEL, 2012) 71

76 Sustainable Energy The sustainable energy sector employs 3,906 (5.2%) 73 of the total manufacturing workforce and contributes a gross value of 175m. There are estimated to be 1,040 employers in the sector in Northern Ireland. The Department of Enterprise, Trade and Investment has established a strategic goal of increasing the amount of electricity from renewable sources to 40% by This is a considerable increase as currently only 10% of electricity is produced through green technology. Activities in relation to wind, marine, and carbon capture make up the renewable energy sector. Each of these sub-sectors is in the early stages of development and the key occupations within these sectors involve designing and developing products and undertaking research and development to engineer and manufacture products. There is a strong overlap of the skills required within these industries and those required within the manufacturing industry, indicating that Northern Ireland possesses the strengths to make the renewable sector a key contributor to the economy. In terms of the skill requirements, there is a strong need for individuals with skills equivalent to levels 4 and 5 in science, technology and engineering qualifications 73. Across the UK there are approximately 4,000 jobs (400 within Northern Ireland) associated with the wind sector, however it has the potential to create up to 60,000 jobs 74 in the UK. The 2011 report commissioned by DEL on the Sustainable Energy (SE) Sector provides the estimates of skills demand which indicate a diverse array of needs across the Northern Ireland SE Sector over the next 5 years. The specific needs and drivers of demand are in many cases unique to that specific sector. In total, DEL suggest that for all SE sub-sectors, approximately 860 skilled workers will be required a year by 2015 as the growth in the sector accelerates. Overall, some 86% of the demand is for new skills, as opposed to replacement skills, although the demand for replacement skills is significant in the Energy Storage sub-sector, reflecting the ageing profile of workers in the electricity distribution industry. Operating in this sub-sector requires a fusion of existing electrical and electronic engineering skills with communication and IT skills. 73 Potential Economic Growth in the NI Sustainable Energy Sector, Department for Employment and Learning (2011). 74 The State of Engineering, Engineering UK (2011) 72

77 3 The bioenergy sub-sector has projected increased skill demand for professional engineers, managers and consultants as well as skilled workers in associate professional, skilled trades and process and plan operatives. The nature of these skills needs will mostly entail up-skilling; this is particularly the case for the associate professional, skilled trades and process and plant operatives. Managers and professionals have however little existing experience in the management, installation and operation of AD 75 or other biomass facilities, and therefore they will need significant development. AD plants require the correct functioning of living biomass and as such cannot be operated solely on engineering principles without reference to the controlling chemical and biological limitations of the process. 5.7 Summary The use of Standard Industrial Classification (SIC 2007) codes are necessary to adequately assess the footprint of the advanced manufacturing and engineering sector, however, limitations do exist from using SIC codes as key contributing sectors to the Northern Ireland economy such as aerospace are categorised as 30 Manufacture of other transport equipment. This has made it difficult to access specific data related to these sectors which leads to their importance potentially being under-valued, unless qualitative evidence is also taken into account as in this report through for example the inclusion of the Aerospace Strategy. The sector has been defined based on the SIC codes which relate directly to advanced manufacturing and engineering 76. The list we have used was finalised with assistance from SEMTA, Colleges NI and MATRIX. The SIC codes of these industries have been used throughout the report and by the Working Futures Model which projects the demand for skills as measured by occupations and qualifications. Based on this definition, the current size of the advanced manufacturing and engineering workforce is approximately 79,580 for DETI s Manufacturing Sales and Exporting survey completed in 2012 shows that the total sales by manufacturing companies in Northern Ireland were estimated at billion which indicated a 6.5% increase from the previous 75 Anaerobic digestion (AD) is a collection of processes by which microorganisms break down biodegradable material in the absence of oxygen 76 See Table 5:1: Standard Industrial Classification 73

78 3 year. Exports from the advanced manufacturing and engineering sector totalled approximately 4.2 billion which represented a 7.7% increase from 2010/2011. The agri-food sector employs almost a quarter (23.4%) of the advanced manufacturing sector in Northern Ireland. Other major contributing sectors include metal products (11.0%), rubber and plastics (8.6%) and other transport equipment (i.e. includes aerospace. 8.4%). Sectors which have been identified as key contributors to the Northern Ireland economy over the next decade include the aerospace and renewable energy sector. These sectors all have specific skills requirements which are very specific to their specialisms; however there are a number of areas which are common: The general need to upskill the workforce and create more managers and professionals; The need for engineering skills for the agri-food sector (mechanical, electrical and computing) to ensure efficient design, operation and maintenance of many of the machines required by the industry; The need for specialist resource for the Aerostructure sector - CADCAM, Stress Engineers, Aerodynamics; CNC machining; Increase the number and quality of apprenticeship programmes for all companies in the advanced manufacturing and engineering sector; and Introduce advanced manufacturing courses into the education curriculum to increase the awareness and opportunities in the sector. 74

79 3 6 SURVEY ANALYSIS 6.1 Introduction This section details the findings of the survey of companies in the manufacturing and engineering sector in Northern Ireland. 6.2 Methodology A questionnaire was designed and distributed in August 2013 via to 550 companies who are members of SEMTA. In addition to this, there were a number of follow-up telephone consultations conducted in order to maximise the response rate. The survey was designed to gather information relating to: Background: number of employees (at each level), description of their sector, company turnover, salary information etc.; Projected skills needs of the company: information on the need for manufacturing engineering employees in the future; Employee demographics: apprentice level, graduate, post-graduate, training of current staff; and Skills gaps: details on any known skills gaps in the company general skills gaps across the sector. Eighty-eight responses in total were received from relevant companies. 6.3 Profile of Respondents The sector spread of respondent companies 77 is detailed in Table 6.1 below: Table 6:1: Sector Profile of Company Survey Respondents Sector Frequency Percentage Aerospace % Bus and automotive products 7 8.9% Other transport products and services 2 2.5% Electrical and optical equipment: photonics 4 5.1% Sustainable energy 1 1.3% 77 9 respondents failed to provide an answer for this question 75

80 3 Sector Frequency Percentage Polymer products 0 0% Food, beverage and tobacco products 7 8.9% Mechanical equipment and machinery 7 8.9% Textiles and textile products 0 0% Wood and wood products 1 1.3% Publishing and printing 1 1.3% Chemicals and chemical products 0 0% Other non-metallic metal products 0 0% Basic metal and fabricated metal products % Other, including: % Civil engineering; Construction; Waste management; Packaging; and Medical/pharmaceutical Total % Respondents were most commonly from the basic metal/fabricated metal products sector (12.7%), closely followed by aerospace (10.1%), and bus and automotive products, food, beverage and tobacco products and Mechanical equipment and machinery (8.9% each). The majority of surveyed companies have been trading for 25 years or more (56.4%), followed by 6 to 10 years (14.1%). Only 3.9% of companies were no more than 5 years old. Table 6.2 gives a breakdown of responses by company size. It can be seen that most respondents were from enterprises employing people (42.5%) respondents failed to provide an answer for this question 76

81 3 Table 6:2: Size of Companies Number of Employees Frequency Percentage < % % % % % % Total % 6.4 Findings Resources, Skills and Education Profile Respondents were asked to provide information on the profile of their workforces which is illustrated in Table

82 Table 6:3: Profile of Workforce Occupation Number of employees Skilled trades Operatives Professionals Associate professionals/ technicians Managers Table 6.3 indicates the size of organisations that took part in the survey and the number of employees they have at the different levels. Respondents most commonly had one to five Professionals (n = 21), Associate Professionals (n = 15) and Managers (n = 31). This would suggest that the majority of the respondents to the survey were SMEs. Respondents were also asked to provide details on the level of education possessed by staff over a number of occupations. Table 6.4 gives an overview of the responses. 79 Note: Not all respondents provided an answer to this question. 78

83 Table 6:4: Average level of qualification of advanced manufacturing and engineering staff for each occupation 80 Occupation Secondary Education Further Education Apprenticeships Bachelor s Degree/BTEC Advanced Professional Diploma Post-graduate Level Other Professional Qualification Skilled trades 23.7% (n=14) 39.0% (n=23) 35.6% (n=21) 0% (n=0) 0% (n=0) 1.7% (n=1) N = 59 Operatives 80.0% (n=40) 10.0% (n=5) 8.0% (n=4) 0% (n=0) 0% (n=0) 2.0% (n=1) N = 50 Professionals 0% (n=0) 33.3% (n=15) 2.2% (n=1) 53.3% (n=24) 8.9% (n=4) 2.2% (n=1) N = 45 Total 81 Associate professionals / technicians 8.3% (n=3) 58.3% (n=21) 0% (n=0) 22.2% (n=8) 11.1% (n=4) 0% (n=0) N = 36 Managers 1.5% (n=1) 19.4% (n=13) 1.5% (n=1) 56.7% (n=38) 19.4% (n=13) 0.5% (n=1) N = 67 The majority of employees in skilled trades possess qualifications in further education (39.0%) or have completed an apprenticeship (35.6%), with a further 23.7% currently holding secondary education qualifications. 80% of operatives are educated at secondary level, while just over half (53.5%) of professionals have a Bachelor s degree or BTEC advanced professional diploma. Similarly 56.7% of managers have this level of qualification, as well as 19.4% who classify as postgraduate. 80 Note: 71 respondents answered this question, 17 respondents did not provide an answer. 81 Note: The percentages used in table 6.4 have been calculated as a percentage of the row total for each occupation. 79

84 6.4.2 Accessing Resources and Skills and Projected Skills Needs Almost half (47.8%) of respondents said they experienced difficulties in filling skilled trades positions over the last two years. 40.4% of respondents also experienced difficulties in filling vacancies for professionals while almost a third (30.6%) had problems filling associate professional vacancies. However, nearly three-quarters (74.6%) of respondents did not experienced difficulties in filling operative vacancies, 59.2% had no difficulties filling associate professional and technical roles and 70.2% of respondents experienced no difficulties in filling managerial vacancies. Table 6.5 gives an overview of the responses to this question across all occupations. Table 6:5: Have you experienced difficulties in filling advanced manufacturing and engineering vacancies over the last two years? Occupation Yes No Don t Know Skilled trades 47.8% (n=32) 46.3% (n=31) 6.0% (n=4) Operatives 23.7% (n=14) 74.6% (n=44) 1.7% (n=1) Professionals 40.4% (n=23) 49.1% (n=28) 10.5% (n=6) Associate professionals/ technicians 30.6% (n=15) 59.2% (n=29) 10.2% (n=5) Managers 22.8% (n=13) 70.2% (n=40) 7.0% (n=4) The common themes arising from companies who provided details on the difficulties in filling advanced manufacturing and engineering have been highlighted below 82 : Difficulty finding potential employees with the sufficient skills (63.4%, n = 23): - Systems design engineers and stress engineers are hard to source in Belfast due to lack of availability or sufficient skills; - Limited skills base in Northern Ireland has resulted in the company having to provide training to prepare people for work on the shop floor; 82 Note: Only 36 respondents provided details on difficulties they had in filling advanced manufacturing and engineering vacancies. 80

85 - Many of the candidates we need are based in GB and are reluctant to relocate to Northern Ireland; - Lack of specific skill sets to support niche sector CNC programming skills, production management related to the sector etc. Core topics are not being taught at university and softer skills being taught are out of date. We overcome skilled trade shortages by having an extensive apprenticeship programme; - Lack of skilled CNC engineers. The quality of operatives available is fairly poor with a poor level of education. A lot of young people do not want to put in the effort with their own time to try and upskill their own ability; - Difficult to find suitable electrical technicians; - It has proved difficult to recruit skilled fabricators who can adapt to the variety of fabrications and time restraints that we are involved in; - Engineering and scientific skills along with project management have been hard to fill; - Extreme difficulties in filling all R&D Engineer type posts (Hardware Design, Verification, Systems and Mechanical); - Difficult recruiting for Production Engineer posts such as Development Engineers (spec manufacturing equipment), Plant Engineer (Facilities development), Manufacturing Systems (Equipment optimising software management); - There is a dearth of engineer s skills right now for fitters, sparks, production and engineering supervisors and managers. We have had up to three attempts to recruit in each of these categories; - Difficulty filling gaps for all R&D Engineer type posts; - Difficult to find specialist trades such as welding; and - Have been trying to employ a design engineer since February but have been unsuccessful to date despite using various sources, including using 10 agencies. 81

86 Difficulty finding potential employees with the right amount of experience (19.4%, n = 7): - Very few experienced CNC machinists prepared to move between companies; - Limited pool of experience in manufacturing and design and programming of CNC machinery; - What is learnt in university is very different to what is used in work; - Young engineers (26-30 years old) lack experience in systems engineering. Graduate level employees (less than 24 years old) are very far away from the level required to be presented to clients for work; and - The average age of the engineering team is now above 60 and we are unable to find suitable people. We are currently trying the apprentice route, with mixed results. Lack of interest from potential employees (8.3%, n=3): - Lack of apprentices over the last 10 years has led to fewer young people being available/willing to work in the Manufacturing sector; and - First of all school leavers do not want to work or need to. We contacted the Engineering Council Newtownards in the Spring 2013 and out of 15 contacts put forward when contacted none of them were interested in working in manufacturing or achieving an NVQ in manufacturing Drivers impacting the need for Resources Companies were asked what were the main drivers impacting on their need for engineering and advanced manufacturing resources over the next 2-3 years. The following themes were provided 83 : New technologies being developed (43.9%, n= 25); Business growth (40.4%, n= 23); and Replacing ageing workforce (8.8%, n = 5). When asked how they thought their need for engineering or manufacturing resources would change over the next three years, 73.1% of respondents predicted an increase in the need, and only 1.3% thought that that they would need fewer resources. A further 19.2% felt that demand for resources would 83 Note: There were 57 responses to this question and respondents could suggest more than one driver. 82

87 remain the same. The remaining 6.4% did not know how resources would change over the next three years. The following are a selection of reasons given for the projected increase in resources: The engineering sector is becoming more technology focused. There is a need to employ and develop engineers in all areas to remain competitive (Manufacturer of basic metals); We are investing more in R&D activity (Manufacturer of fabricated metal products, except machinery and equipment); We need to deliver on increased manufacturing targets as a result of new and upgraded equipment and bigger facilities, which all require a greater focus on business improvement (Manufacture of computer, electronic and optical products); We have experienced growth over the past 10 years and we have plans for new divisions to deliver new markets and new products; (Manufacturer of fabricated metal products); We believe that we need to service a wider range of clients / industries in the future (Manufacturer of fabricated metal products); There are always newer and efficient processes available, and to be competitive we always need to be updating our machinery. Especially for cost reasons. (Manufacturer of rubber and plastic products); The expected greater level of R&D activity, increased manufacturing targets, new and upgraded equipment requirements, greater facility requirements (Manufacturer of computer, electronic and optical products); Provision of services to a wider range of clients / industries in the future (Manufacturer of fabricated metal products, except machinery and equipment); and Increased production rates, advances in CNC technology, advances in cutting technology and further global competition driving efficiency and cost effectiveness (Aerospace sector). 83

88 6.4.4 Accessing Skills Respondents were asked to rate the calibre of new entrants into their company via a number of sources (apprenticeships, further education colleges, higher education institutions). Table 6.6 summarises the ratings received. Table 6:6: How would you rate the caliber of new entrants to your company from each of the following sources over the last three years? (1=very poor, 5=very good) 84 Source 1 (very poor) 2 3 (average) 4 5 (very good) Apprenticeships (n = 38) 13.2% (n=5) 13.2% (n=5) 28.9% (n=11) 23.7% (n=9) 21.1% (n=8) FE Colleges (n = 31) 12.9% (n=4) 6.5% (n=2) 51.6% (n=16) 19.4% (n=6) 9.7% (n=3) HE Institutions (n = 37) 8.1% (n=3) 0% (n=0) 35.1% (n=13) 37.8% (n=14) 18.9% (n=7) Overall employers were most satisfied with employees who graduated from HE institutions (56.7% rated them as 4 or 5), followed by apprentices (44.8%) and FE colleges (29.1%). Apprentices were also however most commonly rated as very poor (13.2%), and have the lowest percentage of employers rating them as average or above (73.7%). Where respondents selected a rating or 3 or below, the following are a selection of reasons given for this: Apprenticeships: - Young people immature when starting apprenticeship. Trouble with behaviour, timekeeping, work ethic; and - Apprentices lack hands on experience, good at book learning, but practical experience is virtually non-existent. Further Education colleges: - Education must be designed to be jobs and work focused; and - Not enough practical experience, any practical skills were general, not specific enough. 84 Note: These percentages have been rounded to 1 decimal place and therefore may not add to exactly

89 Higher Education institutions: - Lacking industrial experience; and - Coming in with degree, but lacking in understanding of consultation and problem solving. Over half of respondents stated that they collaborate with educational institutions (56.9%). The nature of these collaborations was described as follows: Apprenticeships: - Employer led apprentices; - Engineering Training Council NI; and - Day release to Further Education colleges on apprenticeships. Further Education colleges: - Skills development; - Strategic industrial partnership with NRC; and - Careers fair. Higher Education institutions: - Recruitment for graduates; - Bursary schemes; and - Partnership promoting STEM. Companies were asked to specify their awareness of several government programmes, which exist in order to help train/ upskill staff, and also whether they had availed of any of these programmes. Each of these programmes is explained in more detail in Table Table 6.7 provides a summary of the responses. Table 6:7: Awareness of DEL or Other Government Programmes, and Usage Programme Yes aware No not aware DEL: ApprenticeshipsNI Yes have used No have not used 83.9% (n=52) 16.1% (n=10) 45.5% (n=25) 54.5% (n=30) DEL: Essential Skills DEL: Management and 66.1% (n=37) 33.9% (n=19) 28.3% (n=15) 71.7% (n=38) 56.6% (n=30) 43.4% (n=23) 26.4% (n=14) 73.6% (n=39) 85

90 Programme Yes aware No not aware Leadership Yes have used No have not used DEL: Skills Solutions Others: YES Scheme and Invest NI BITP % (n=24) 56.4% (n=31) 6.3% (n=3) 93.8% (n=45) 16.7% (n=3) 83.3% (n=15) 16.7% (n=3) 83.3% (n=15) Respondents were most aware of DEL s ApprenticeshipsNI programme (83.9%), with 45.5% stating that they had used it. Companies were least aware of DEL s Skills Solutions programmes, (43.6% aware). The Essential Skills programme and the Management and Leadership programme by DEL were used by just over a quarter of respondents (28.3% and 26.4% respectively). 93.8% had not used use DEL s Skills solutions programme. 6.5 Accessing Skills Organisations were asked whether they employed advanced manufacturing and engineering apprentices, graduates and post-graduates. 61.5% (n = 48) of respondents stated that they do take on apprentices. However one in five (22.9%, n = 11) organisations claimed that they had experienced difficulties recruiting apprentices. The most common (n = 5) reason given for these difficulties was that the apprentice lacked the relevant skills or qualifications; and 58.4% (n = 45) of respondents stated they employ advanced manufacturing and engineering graduates and 39.0% (n= 30) stated that they employed post-graduates. 10.9% (n = 5) of organisations had experienced difficulties in recruiting graduates while only 1 respondent (3.13%) had experienced problems with recruiting post-graduates. 85 BITP has been replaced by the Skills Growth Programme. 86

91 6.6 Training 82.1% (n = 64) of respondents trained or developed their existing advanced manufacturing and engineering employees. Companies were asked what percentage of their training costs were spent on training for advanced manufacturing and engineering employees. The responses are shown in table 6.8 below: Table 6:8: What percentage of your training expenses was spent on training for advanced manufacturing and engineering (n = 39) 86 % of training budget spent on advanced manufacturing and engineering employees Frequency % 0-10% % 11-30% % 31-50% % 51-80% % % % Table 6.8 shows that over a quarter (25.6%) of the respondents spend between 51-80% of their training budget on advanced manufacturing and engineering employees. 15% (6 respondents) spend between % of their training budget on this group. Respondents were asked what methods they use to deliver their training (respondents could provide more than one answer so the percentages will add not add up to 100) % (n = 51) of organisations used on the job training while 60.2% (n = 35) opted for a Private Provider. 29.3% (n = 17) of respondents used Further Education institutions and 19.0% of respondents used Higher Education institutions. The majority (94.6%, n = 53) of these organisations used their own funds for training while just over half (51.8%, n = 29) also utilised external grants provided to the company through Invest NI or DEL.10.7% (n = 6) of respondents did not provide an answer for this question. 87 Note: Only 58 respondents answered this question. 87

92 organisations funded their training through external grants that were provided to training organisations. 6.7 Skills Gaps When asked if they were experiencing skills gaps at present in their organisation, 44.2% (n = 34) of respondents who answered the question stated that skill gaps did exist. Of these 34 respondents, the most common skills gaps existed within skilled trades and in particular CNC machinists (n = 8). Other common skills gaps included welders (n = 4). The remaining respondents did not provide details on the skill gaps that existed. Respondents were asked if they had any other views on the supply side provision (FE, HE and skill training) to support growth in the advanced manufacturing and engineering services sector. Of the 11 responses, 5 respondents (45.5%) referred to the importance of FE and HE colleges adapting their courses to the needs of organisations: These providers need to ensure that they understand the employers requirements and develop programmes and courses which meet those needs (Manufacture of fabricated metal products, except machinery and equipment); The ability to adapt to the needs of organisations and more importantly be responsive is crucial. It takes months to get a funded plan to be agreed and it is often then delivered after need due to the delay (Manufacture of other transport equipment); and Training providers are more flexible to adapt courses etc. to business needs, from what they were in the past. This should continue to develop as business grow and adapt to the ever changing economic climate as businesses adapt products and processes to meet changing and more demanding customer requirements (Manufacture of computer, electronic and optical products). Other responses varied including: Support for training and engineering software would be more useful as it is essential to any role we work at. HE seem to use basic packages like solid works but more training is required to be at a level a client will require. Also project management training has been very useful for us (Aerospace Engineering); 88

93 As some companies only recruit reasonably small numbers each year it can be difficult to influence policy at college level. The alternative is bespoke training which is very expensive (Manufacture of basic metals); Focus should be on the delivery from FE Colleges (Printing and reproduction of recorded media); Massive gaps for stainless steel welders and skill-coded welder skills (Manufacture of basic metals); Very keen on bringing in apprentices but we are struggling to find ones with the correct hands on skills (Manufacture of fabricated metal products, except machinery and equipment); SME s are at a distinct disadvantage when it comes to in-house training compared with larger organisations as little or no assistance is available. SME s do not have the time or the money to send skilled employees out to external training. This is the reason they use in-house training (Manufacture of machinery and equipment n.e.c); and Wider range of courses needs to be provided for the sector (Manufacturing of food products). Respondents were asked for their views on any specific gaps in current education, training or skills provision concerning the advanced manufacturing and engineering services sector. Of the 21 responses, 4 (19.0%) made comments related to apprenticeship schemes. These included: I feel there should be more emphasis on apprenticeship schemes; Apprenticeships and training are difficult for SMEs to commit to and to provide adequate structured and broad ranging training. One option is for a small group of SMEs to provide periods of training within their organisation leading to an overall apprenticeship or training period; A better selection of skilled apprentices is required; and The apprenticeship training is weak, lack of core skills, lack of facilities, too much expectation on the employer to provide the training. Other responses included: Work experience should be an essential element of HE to get real life exposure to an engineering company like our design consultancy. Final projects should incorporate a company to prepare graduates for actual real life engineering; 89

94 The major burden falls on employers to provide training. The demand-led approach results in a lack of reserve talent to respond quickly to increased demand and potential to new investment; Training programmes need to be matched better to current needs and market demands; SMEs find it particularly difficult to spend time and money on training; The colleges are lagging behind in the manual skills department; Lack of skilled resources in business improvement techniques, management and leadership skills and selling skills; Specific gaps in training include- the ability to read drawings, resource gaps with regard to coded welders, specific metal welders types such as stainless or aluminium; It is very difficult to find skilled welders; and Very difficult to find design engineers. Some of the respondents provided positive feedback in relation to the skill gaps in their sector, including: Good to see some recent apprentice applicants who have completed technical qualifications as part of their school curriculum. 6.8 Actions Required Respondents were asked what actions need to be taken by the government and others to ensure that the skilled resources in Northern Ireland meet the needs of the advanced manufacturing and engineering organisations. Of the 53 responses, the respondents stated that the following actions needed to be taken by the government: Increase in government funding (n = 8): - More financial support to make recruitment of apprentices more viable e.g. funding of salaries for apprentices and not just training ; and - More grants being made available for companies to address skills gaps. Enhance the quality of courses, training and apprenticeships being delivered (n = 12): - Engineering at HE level needs to include basic and soft skills as part of the study. An engineer obviously understands process but also needs to understand problem solving, how to consult, lead teams, and manage projects etc. ; 90

95 - Increase hands on training - theory and practical work must be combined. Tradesman and engineers cannot learn all the necessary skills in a classroom; and - Businesses should be given incentives to run properly funded apprenticeships and graduate schemes. More focus on advanced manufacturing and engineering at schools and FE colleges (n = 9): - Focus and investment needs to be placed on the STEM subjects at the school, higher and further education stages to encourage young people to take and do well on these vital subjects, to pave the path for careers in engineering/manufacturing. ; and - Keep the focus on manufacturing, support schools in getting out into manufacturing companies. Career teachers not fully understanding what our business can offer their students. Promote career opportunities in advanced manufacturing and engineering (n = 4): - There is a lack of communication and information available regarding the scope of careers available within the engineering and manufacturing sectors; - People need to be encouraged to pursue a career in engineering ; and - Promote the STEM subjects among females and promote work experience. We had two 16 year old students this summer for 2 weeks and they left very happy and confident of their career paths as they saw real life engineering. 91

96 7 THE CURRENT DEMAND FOR ADVANCED MANUFACTURING AND ENGINEERING RELATED SKILLS 7.1 Introduction This section aims to determine the demand for advanced manufacturing and engineering skills and resources in Northern Ireland through the combined analysis of the survey results and the Working Futures Model. 7.2 Skill Projections based on Survey Feedback Both the desk research (see section 4) and the qualitative survey data (see section 6) have identified the skills gaps present in advanced manufacturing and engineering organisations. Data from the advanced manufacturing and engineering services survey identified that 44.2% (n = 34) of respondents felt that skill gaps existed at present. Of these 34 respondents the most common skills gaps existed within skilled trades and in particular CNC machinists (n = 8). Other common skills gaps included welders (n = 4). The remaining respondents did not provide details on the skill gaps that existed 88. Respondents were asked if they had any other views on the supply side provision (FE, HE and skill training) to support growth in the advanced manufacturing and engineering services sector. Of the 11 responses, 5 respondents (45.5%) referred to the importance of FE and HE colleges adapting their courses to the needs of organisations 88. Table 7.1 outlines the responses to the RSM advanced manufacturing and engineering services survey in relation to the number of additional employees respondents are expecting to require over the next three years for each position. As our survey responses only represent a small proportion of the advanced manufacturing and engineering sector, data pro rata based on the total number of advanced manufacturing and engineering is provided. 88 See Section

97 Table 7:1: Expected number of new recruits over the next 3 years for different occupations in Advanced Manufacturing and Engineering Occupation Skilled trades (e.g. welders, electricians, CNC machinist, sheet metal worker, etc.) Operatives (e.g. process operatives, plant, machine and assembly operator) Professionals (e.g. mechanical, electrical, design and development engineers, etc.) Associate professionals/technicians (e.g. production, electrical and science, engineering and production, etc.) Managers (e.g. production engineer managers and directors Expected number of recruits over the next 3 years 89 (Survey Responses N=88)- Expected number of recruits over the next 3 years (Pro-Rata) in Advanced Manufacturing and Engineering Sector (Total Employers = 4,420) new recruits 35,267-35,605 new recruits new recruits 24,957-25,487 new recruits new recruits 13,345-13,827 new recruits new recruits 8,816-9,058 new recruits new recruits new recruits Source: RSM McClure Watters Survey, Note: The expected number of recruits for the next 3 years was taken from the RSM Survey results (88 responses). This was calculated by adding together the total number of expected recruits together for each position. Some responses included an estimated range of expected recruits (i.e. 5-10) 90 Characteristics of VAT or PAYE registered businesses in Northern Ireland (Department of Finance and Personnel, 2013). Note: (4,420 / 88) multiplied by the total expected number of recruits for each occupation. As this data is based on 88 responses from the RSM Survey results, the data should be treated with a degree of caution. 93

98 Respondents to the survey highlighted a number of areas where there are skills shortages at present and these are: Business Development skills at management level; Project Management skills; Engineering Software skills- specific to company needs; Graduates with real life engineering skills; Design Engineers; Welders (coded welders and stainless steel or aluminium welders); and Skilled apprentice. The survey respondents also highlighted concerns from SMEs that they could not afford to access the training and development they needed for their employees. There were two reasons for this: 1. Companies could not afford the training and development infrastructure; and 2. Companies could not afford the time or money to train. 7.3 Hard to Fill Vacancies 91 The Department for Employment and Learning s Analysis of the Engineering Sector in Northern Ireland (2012) 92 identified a number of current and future skill issues. The report identified that over the last five to ten years, the sector has become increasingly focused in high value-added areas including innovation and design and development. This has resulted in the need for individuals with higher skill levels within various sub-sectors. Specific hard-to-fill vacancies that were identified included welding, CNC machine operations, mechanical engineering, metal working, electrical engineering and computer-aided design (CAD). The UK Commission Employer Skills Survey 2011: Northern Ireland National Report also focused on the skills gaps faced by Northern Ireland s employers. The report conducted a time-series analysis of the data collected from the Department for Employment and Learning s Northern Ireland Skills Monitoring Surveys (NISMS) from 2005 and The data from this report is broken down by sector and includes information on the hard-to-fill vacancies for the manufacturing sector. Data was also included on the hard-to-fill vacancies 91 Vacancies which are proving difficult to fill, as defined by the establishment (Source: UK Commission Employer Skills Survey 2011: Northern Ireland National Report) 92 Analysis of the Engineering Sector in Northern Ireland (DEL, 2012) 94

99 broken down by occupation and region for the Northern Ireland economy as a whole. Table 7.2 identifies the change in hard-to-fill vacancies between 2008 and 2011 for the manufacturing sector. For the manufacturing sector, the percentage of hard-to-fill vacancies has fallen by 2% over the three year period with an estimated 400 hard-to-fill vacancies in Table 7:2: Hard-to-fill vacancies by Sector for Northern Ireland 2008 and 2011 Sector 2008 Hard-to-fill vacancies 2011 Hard-to-fill vacancies N % N % Manufacturing 93 n/a 6% 400 4% Source: UK Commission Employer Skills Survey 2011: Northern Ireland National Report Table 7.3 shows the hard-to-fill vacancies in Northern Ireland for the different occupation levels for 2008 and It should be noted that hard-to-fill vacancy data by occupation broken down by each sector was not available and the data below relates to all of Northern Ireland s sectors. The table shows that hard-tofill vacancies have declined for skilled trades (by 25% 94 ), associate professionals (by 19%) and managers (by 7%) between 2008 and However the proportion of hard-to-fill vacancies for professionals has more than doubled (34%). Table 7:3: Hard-to-fill vacancies by Occupation for Northern Ireland 2008 and Occupation 2008 Hard-to-fill vacancies 2011 Hard-to-fill vacancies % % Skilled trades 55% 30% Machine Operatives 23% n/a Professionals 29% 63% Associate Professionals 33% 14% 93 This incorporates all of the hard-to-fill vacancies for each of the sectors listed in Table I.e. 55% in 2008 fallen to 30% in

100 Occupation 2008 Hard-to-fill vacancies 2011 Hard-to-fill vacancies % % Managers 38% 31% Source: UK Commission Employer Skills Survey 2011: Northern Ireland National Report Summary The data collected from the survey showed that 44.2% of respondents felt that skill gaps existed in their organisation. Of these responses, specific gaps that were mentioned included CNC machinists and welders. CNC machine operatives and welders were also mentioned in the Department for Employment and Learning s Analysis of the Engineering Sector in Northern Ireland (2012) as being hard-to-fill vacancies along with mechanical engineers, electrical engineers and computer-aided designers (CAD). The main drivers impacting the need for more advanced engineering and manufacturing resources from the survey data included technological advancements, enhanced levels of research and development activity and the expansion into new industries. 73.1% of the respondents expected these drivers to result in the need for more resources over the next 2-3 years. 7.4 Projected Demand for Resources and Skills: Working Futures Model Introduction This section details the demand for advanced manufacturing and engineering skills, based on the Working Futures Model. The data collected from the Working Futures Model has been separated into two different sets of figures: Projected demand for organisations in the advanced manufacturing and engineering sectors: and Projected demand for organisations in industries that use advanced manufacturing and engineering. The Working Futures Model has been developed by the Warwick Institute for Employment Research (IER) and Cambridge Economics (CE) and use sources such as the Labour Force Survey, Office for National Statistics and BIS to construct the database. The final results by occupation and qualification are published in detailed workbooks. These can be further manipulated by users to assess the sensitivity to: 96

101 Age Structure: This relates to the percentage share in various age categories of those in employment; Retirements rates; Mortality rates; Inter-occupational flow rates; and Geographical flow rates. The default values in the Working Futures Model for Northern Ireland for each of these categories were used during calculations. It is likely that there have been minor changes since the model was constructed but there is no more upto-date and robust data available at this stage. The Working Futures Model projects the expected impact of the above factors on the number of jobs, but cannot accurately account for externalities such as major political upheaval or natural disasters. It should also be noted that the current results were published in 2011, when the full extent of the impact of the global economic crisis was still uncertain, and the recovery of the UK and Northern Ireland economy over the 2010 to 2020 period remained unclear. It has been noted that growth has been slower than the predictions of most analysts at the time of publication. It has been speculated that a full update to Working Futures will be commissioned during 2013 or 2014, dependent on budgetary factors. A full update to the projections would reflect a more pessimistic economic outlook to Overall Projected Skill Demand The Standard Industrial Classification (SIC) codes and Standard Occupational Classification (SOC) codes that have been used throughout the report are highlighted in section 5.2. These codes have been used to project the skill demand for the advanced manufacturing sector. Occupational change provides a measure of the changing demand for skills in the economy. Table 7.4 provides information about how the demand for skills, as captured by occupation, is projected to change over the period to

102 Final Report November 2013 Table 7:4: Occupational change in advanced manufacturing and engineering sectors to Industrial Sector Levels Change Total 62,915 48,476 46,072-16,843-2, Corporate managers and directors 12 Other managers and proprietors 21 Science, research, engineering and technology professionals 31 Science, engineering and technology associate professionals 52 Skilled metal, electrical and electronic trades 54 Textiles, printing and other skilled trades 81 Process, plant and machine operatives 5,464 5,727 6,709 1, , ,180 4,947 5, ,271 2,402 2, ,667 13,900 12,322-6, ,804 2,982 2,190-2, ,583 13,769 10,839-9, Transport and mobile machine drivers and operatives Source: Working Futures 4 (Institute for Employment Research, University of Warwick) 4,020 3,767 4, These sectors relate to the Standard Occupation Codes (See Section 5.2, Table 5.2) which relate to advanced manufacturing and engineering. 97 Note: This table does not include advanced manufacturing and engineering roles related to teaching, public sector, sales, customer service etc. 98

103 Table 7.4 identifies an overall decline of 2,404 advanced manufacturing and engineering occupations between 2010 and This is largely been driven by a projected decline of 2,930 jobs for process, plant and machine operatives. Despite this decline, there is a projected increase of 667 in the number of jobs for transport and mobile machine driver operatives during this period. However, overall this still represents a decline of 2,263 (12.9% - codes 81 and 82) in the total number of jobs at an operative level between 2010 and This decline between 2010 and 2020 is also mirrored in Skilled Trade occupational changes for advanced manufacturing and engineering. Overall there is a projected 2,370 (14.1%) decline in the number of Skilled Trade occupations (skilled metal, electrical and electronic trades and textiles, printing and other skilled trades codes 52 and 54). Despite the decline in the number of occupations for the Skilled Trades and Operatives between 2010 and 2020 the table does indicate Professional and Associate Professional roles will increase by The number of occupations for science, research, engineering and technology professionals is projected to rise by 773 by 2020, representing a 15.6% increase. Associate Professional occupations will similarly rise by 13.3% (319). This indicates a shift to a higher skill level for advanced manufacturing and engineering occupations. Managerial occupations will also experience an increase between 2010 and 2020 for the advanced manufacturing and engineering sector. Corporate manager and director occupations will increase by 17.1% (from 5,727 to 6,709) while other managerial and proprietor occupations increased by a similar proportion (15.1%, from 982 to 1,137). It should be noted that this refers only to the net difference in total jobs (expansion demand) which have been projected for the occupations for this period. Replacement demand is examined in section 7.6. Table 7.5 below includes the occupational change in all of the occupations within the advanced manufacturing and engineering footprint. This includes health professionals, administrative professions and sales occupations. 99

104 Table 7:5: Occupational change in sectors that use advanced manufacturing and engineering 2000 to 2020 Industrial Sector Levels Change Share of employment Total 95,800 78,300 78,624-17, Corporate managers and directors 12 Other managers and proprietors 21 Science, research, engineering and technology professionals 5,464 5,727 6,709 1, , ,180 4,947 5, Health professionals Teaching and educational professionals 24 Business, media and public service professionals 31 Science, engineering and technology associate professionals 32 Health and social care associate professionals ,651 1,526 1, ,271 2,402 2, Protective service occupations Culture, media and sports occupations

105 Industrial Sector Levels Change Share of employment Total 95,800 78,300 78,624-17, Business and public service associate professionals 4,593 4,540 5, Administrative occupations 5,607 5,182 5, Secretarial and related occupations 51 Skilled agricultural and related trades 52 Skilled metal, electrical and electronic trades 53 Skilled construction and building 54 Textiles, printing and other skilled trades 61 Caring personal service occupations 62 Leisure, travel and related personal service occupations 1, , ,667 13,900 12,322-6,345-1, ,220 3,588 3, ,804 2,982 2,190-2, Sales occupations 1,381 1,168 1, Customer service occupations 1,098 1,133 1,

106 Industrial Sector Levels Change Share of employment Total 95,800 78,300 78,624-17, Process, plant and machine operatives 82 Transport and mobile machine drivers and operatives 91 Elementary trades and related occupations 92 Elementary administration and service occupations 20,583 13,769 10,839-9,744-2, ,020 3,767 4, ,596 4,228 4, ,062 4,274 4, Source: Working Futures 4 (Institute for Employment Research, University of Warwick) Overall the total level of employment in the advanced manufacturing and engineering sector is projected to decrease by 17,174 between 2000 and However an increase of 324 is projected between 2010 and From all of the SOC codes included in Table 7.5, the occupations projected to experience the greatest decline between 2010 and 2020 include Process, plant and machine operatives (-2,930), Skilled metal, electrical and electronic trades (-1,578) and Textiles, printing and other skilled trades (-792). Other occupations projected to decline over this period include Secretarial and related occupations (-212), Skilled agricultural and related trades (-65) and Sales occupations (-61). The occupations expected to experience the greatest increase include Corporate managers and directors (+982), Business and public service associate professionals (+895) and Science, research, engineering and technology professionals (+773). 102

107 7.5 Replacement Demands and Net Requirement The number of additional people needed between 2010 and 2020 to fill new job openings is a result of calculating the net requirement 98. Net requirement is calculated by adding expansion demand 99 and replacement demand 100. The expansion and replacement figures are calculated within the Working Futures Model. This is shown below in table 7.5. Table 7:6: Replacement demands and net requirements in advanced manufacturing and engineering sector, (000 s) Expansion demand Replacement demand Net requirement Corporate managers and directors Other managers and proprietors Science, research, engineering and technology professionals Science, engineering and technology associate professionals Skilled metal, electrical and electronic trades Textiles, printing and other skilled trades Process, plant and machine operatives Transport and mobile machine drivers and operatives All occupations Source: Working Futures 4 (Institute for Employment Research, University of Warwick) 98 Note: This table does not include advanced manufacturing and engineering roles related to teaching, public sector, sales, customer service etc. 99 This is the project number for 2010 subtracted from the projected number for Replacement Demand = Retirement + Mortality + Occupational Mobility + Migration. It excludes general labour market turnover (churn) 101 Note: The total expansion demand has been rounded down 103

108 Table 7.6 shows that over the 2010 to 2020 period, the demand for advanced manufacturing and engineering workers is projected to decline by 2,410. However, when replacement demands are factored in, there will be a need for an additional 16,070 people to work in the advanced manufacturing and engineering sector. This equates to approximately 1,607 roles per year on average. Nearly a quarter of these roles (24.5%) are expected to be Corporate managers and directors or other managers and proprietors which indicates an increase in the need for more skilled and experienced advanced manufacturing and engineering workers. The net requirement will be particularly high for the following occupations: Corporate managers and directors (3,330); Science, research, engineering and technology professionals (2,400); Science, engineering and technology associate professionals (1,130); Skilled metal, electrical and electronic trades (3,610); Process, plant and machine operatives (2,240); and Transport and mobile machine drivers and operatives (2,480). Table 7.7 indicates that the projected expansion demand for all of the sectors that use advanced manufacturing and engineering (as well as those directly included in the sector) is expected to remain the same between 2010 and When replacement demands are factored in there will be a need for approximately an additional 30,000 people to work in sectors that use advanced manufacturing and engineering. The net requirement is therefore projected to exceed the replacement demand. The projected total number of people required to fill vacancies in the sector will predominantly come as a result of people leaving the industry (98.9%) rather than the growth of the sectors that use advanced manufacturing and engineering. This analysis shows that those occupations not directly related to advanced manufacturing and engineering significantly increases the replacement demand numbers for the overall sector. 104

109 Table 7:7: Replacement demands and net requirements in occupations using advanced manufacturing and engineering, (000 s) Expansion demand Replacement demand Net requirement Corporate managers and directors Other managers and proprietors Science, research, engineering and technology professionals Health professionals Teaching and educational professionals Business, media and public service professionals Science, engineering and technology associate professionals Health and social care associate professionals Protective service occupations Culture, media and sports occupations Business and public service associate professionals Administrative occupations Secretarial and related occupations Skilled agricultural and related trades Skilled metal, electrical and electronic trades Skilled construction and building trades Textiles, printing and other skilled trades Caring personal service occupations Leisure, travel and related personal service occupations Sales occupations Customer service occupations Process, plant and machine operatives Transport and mobile machine drivers and operatives Elementary trades and related occupations

110 Elementary administration and service occupations Expansion demand Replacement demand Net requirement All occupations Source: Working Futures 4 (Institute for Employment Research, University of Warwick In relation to skilled metal, electrical and electronic trades and process, plant and machine operatives, expansion demand is projected to be negative, but the level of replacement demands is sufficiently high to offset this fall and create a relatively strong demand for additional labour (see Table 7.6). It is apparent that some of the occupations where there will be a relatively high net requirement are the occupations which are likely to have a relatively high skill content relating to science, technology, engineering and mathematics (STEM). A number of Government documents have outlined the importance of increasing the number of people working towards completion of a qualification or Apprenticeship in a STEM subject. The overall number of people who are projected to be working in professional, associate professional and skilled trades jobs indicates that there may be some change in the occupational structures of workplaces which are dependent upon STEM skills. Employer case study evidence has indicated that some employers are increasingly using Apprenticeships to train their skilled trades workers but then provide additional training to allow these workers to fill a technician role within the organisation 102. In other words, a para-professional role that falls between the skilled trades on the shop-floor and the professional engineer 103. From the data in Tables 7.6 and 7.7, we can estimate the number of roles required on average per year from 2010 to As any projection over such a time scale is heavily reliant on the assumptions iterated in section 7.4.2, these averages have been included within ranges. Tables 7.8 and 7.9 indicate the estimated number of resources required for both the core advanced manufacturing and engineering occupations and all occupations related to advanced manufacturing and engineering. 102 Lewis, P. (2012). Space for Technicians: An analysis of Technician duties, skills and training in the UK Space Industry, Department of Political Economy, Kings College London. 103 Mason, G. (2012). Science, Engineering, and Technology (SET) Technicians in the UK Economy. London: The Gatsby Charitable Foundation. 106

111 Table 7:8: Estimated number of resources/applicants demanded per industry per year for Occupations directly related to Advanced Manufacturing and Engineering Industry Number of resources per year Corporate managers and directors 300+ Other managers and proprietors Science, research, engineering and technology professionals Science, engineering and technology associate professionals Skilled metal, electrical and electronic trades 300+ Textiles, printing and other skilled trades Process, plant and machine operatives Transport and mobile machine drivers and operatives Total Estimate 1,300 Source: Data: Working Futures Model, Calculation: RSM McClure Watters 2013 Table 7:9: Estimated number of resources/applicants demanded per industry per year for all Advanced Manufacturing and Engineering Occupations Industry Number of resources per year Corporate managers and directors 300+ Other managers and proprietors Science, research, engineering and technology professionals Health professionals Teaching and educational professionals Business, media and public service professionals Science, engineering and technology associate professionals Health and social care associate professionals 0-10 Protective service occupations Culture, media and sports occupations Business and public service associate professionals

112 Industry Number of resources per year Administrative occupations Secretarial and related occupations Skilled agricultural and related trades Skilled metal, electrical and electronic trades 300+ Skilled construction and building trades Textiles, printing and other skilled trades Caring personal service occupations Leisure, travel and related personal service occupations Sales occupations Customer service occupations Process, plant and machine operatives Transport and mobile machine drivers and operatives Elementary trades and related occupations Elementary administration and service occupations Total Estimate 3,000 Source: Data: Working Futures Model, Calculation: RSM McClure Watters 2013 From Table 7.9, an average of the total expected roles over the 10 year period has been taken. In practice, it is likely that the many independent factors involved will introduce significant variation on the short and long-term scale. The above estimate of 3,000 average resources per year takes into account the resources required for all sectors that use advanced manufacturing and engineering skills over the next ten years. Table 7.8 shows that 1,300 of these projected vacancies will be for sectors directly involved in advanced manufacturing and engineering. This shows that an average of 43.3% of projected resources required every year will be for industries that are directly involved in advanced manufacturing and engineering. 108

113 7.6 Summary This section has examined, quantitatively and qualitatively, the extent to which advanced manufacturing and engineering skills will be required in the future up to The Working Futures data demonstrates the expected growth in jobs in this sector, with the net additional jobs expected to be approximately 3,000 per annum for all industries that use advanced manufacturing and engineering skill sets and 1,300 per annum for industries directly involved in advanced manufacturing and engineering. It should be noted that these estimates take account of both expansion and replacement demand. Our analysis has indicated that over the medium-term employment will become increasingly concentrated in managerial, professional and associate professional positions and that it is likely that people in the sector will become increasingly highly qualified in the period to At the same time there will be growth in employment in some lower level occupations too, consistent with a view that there has been and will continue to be a hollowing out of the occupational structure. The Working Futures data shows that skilled metal, electrical and electronic trades (3,610 net requirement) and corporate managers and directors (3,330) will be the most important in terms of demand for the future. This indicates the shift to a higher skill requirement for the advanced manufacturing and engineering sector over Despite the increase in vacancies for higher skilled occupations within the advanced manufacturing and engineering sector, the overall trend of employment indicates a decline of 2,407 between 2010 and 2020 (tables 7.5 and 7.6). A major contributor to this decline in projected employment figures is the expected fall (2,931) in the number of process, plant and machine operatives by Technological change may be partly responsible for this, as it is seen to have most impact on routine jobs which can be substituted by automation. However, due to the replacement demand (i.e. those employees leaving the sector) the net requirement for process, plant and machine operatives has been estimated at 2,

114 8 REGIONAL SALARY INFORMATION ACROSS THE ADVANCED MANUFACTURING/ENGINEERING SERVICES FOOTPRINT IN UK AND IRELAND 8.1 Introduction This section compares available salary information for the advanced manufacturing and engineering services sector in Northern Ireland in relation to the rest of the UK and Republic of Ireland. General salary information has also been included for different occupations and sectors in Northern Ireland so that the salary levels for the advanced manufacturing and engineering sector can be compared to assess the attractiveness of the sector. 8.2 Salary Information for Manual and Technical Employees The data for this section has been sourced from the Workforce Pay Benchmark 104. The data provided for Northern Ireland was based on the responses from 5 organisations and therefore cannot be relied on as being representative across the sector. The salary information has been broken down by sub-sectors for both manual and technical roles. Information on salaries for managerial and professional roles have also been detailed. Table 8.1 shows the salary information for a variety of manual roles in the advanced manufacturing and engineering sector. The basic 105 median pay of those in a manual role is 17, Table 8.1 shows that these salaries ranged from 29,802 for maintenance fitters to 16,692 for unskilled workers. 104 Workforce Pay Benchmark, EEF: The Manufacturer s Organisation (2013) 105 Basic pay does not include bonuses, benefits or perks associated with the job 106 Workforce Pay Benchmark #08 Manual, Clerical & Technical Employees, EEF: Manufacturers Organisation 110

115 Table 8:1: Salary information for a variety of manual roles in Northern Ireland (September 2011 October 2012) Job Title Median Basic Pay( ) Average Basic Pay ( ) Median Total Pay ( ) Average Total Pay ( ) Fitter Production N/A 18,950 N/A 18,950 Machinist Skilled N/A 29,579 N/A 29,579 Maintenance Electrician 23,125 26,137 23,464 26,330 Maintenance Fitter 29,802 27,662 29,802 27,770 Setter Non CNC N/A 17,488 N/A 17,488 Setter/Operator Non CNC CNC Operator Semi-Skilled 19,383 19,552 19,383 19,552 18,950 18,950 18,950 18,950 Storekeeper 17,901 17,862 17,901 17,862 Warehouse Worker 18,091 18,562 18,091 18,573 Other Semi-Skilled Worker Other Unskilled Worker 19,339 18,207 19,678 18,583 16,692 16,150 16,692 16,150 Source: Workforce Pay Benchmark #08 Manual, Clerical & Technical Employees, EEF: Manufacturers Organisation 8.3 Salary Information for Managers and Professional Engineers The following information has been provided 107 regarding the salaries of managers & professional engineers across Northern Ireland: The basic median pay of managers & professional engineers in 2012 was totalled at 42,246. This is an increase of 2% on the previous year ( 41,407) 108 ; 107 Source: Professionals Pay Benchmark Managers and Professional Engineers, EEF: Manufacturers Organisation. 111

116 The basic median pay over all relevant roles is 39,353, with the total median pay at 42,266. This is a variance of 12% on the average UK basic median pay; and Considering management roles only, the basic median pay is totalled at 43,014, with the total median pay at 49,560. There is no variance between these figures and the UK average basic median pay. A breakdown of regional pay information for Northern Ireland for different engineering roles is detailed below in Table 8.2. The data from the table has been sourced from the Brightwater Salary Survey Table 8:2: Salary Information for a variety of Engineering Roles in Northern Ireland Role Low ( ) High ( ) Process Engineer 20,000 32,000 Project Engineer 20,000 32,000 Quality Engineer 20,000 32,000 Maintenance Engineer 20,000 32,000 Maintenance Manager 35,000 50,000 Automation Engineer 30,000 40,000 Facilities Engineer 30,000 50,000 Design Engineer 20,000 40,000 Source: Brightwater Recruitment Salary Survey General Salary Levels in Northern Ireland Table 8.3 details the general salary levels for occupations in Northern Ireland. These can be compared to the salary levels for manual, technical, professional and managerial occupations in the advanced manufacturing and engineering sector in Sections 8.2 and These figures are based on matched sampling; only companies that were involved in the 2011 and 2012 surveys were counted. The unmatched sampling numbers give 39,353 as the base median pay for 2012 an increase of 9% on the previous year. 112

117 The table shows that the general median ( 19,484.40) and mean ( 20,814.40) salaries for process, plant and machine operatives in Northern Ireland are higher than all of the similar manual roles in the advanced manufacturing and engineering sector 109. The skilled machinists salary in the advanced manufacturing and engineering sector earn, on average, 29, annually. This is also less than the average general salary for associate professionals and technical occupations in Northern Ireland ( 31,309.20). Maintenance electricians in the advanced manufacturing and engineering sector earn an average salary of 26, which is also significantly less than the general salary for associate professional and technical occupations. However the maintenance fitters in the advanced manufacturing sector earn 27,770 annually which is higher than the general salary levels for skilled trades occupations ( 23,301.20) in Northern Ireland. The salary levels for professional and managerial occupations within the advanced manufacturing and engineering sector are detailed in Table 8.2. The highest salary levels for process, project, quality and maintenance engineers in the advanced manufacturing and engineering sector are all lower than the average general salary levels for professional occupations in Northern Ireland ( 38,646.40). This average salary level of for professional occupations falls within the range of salaries for automation engineers ( 30,000 40,000), facilities engineers ( 30,000 50,000) and design engineers ( 20,000 40,000). This makes it difficult to determine whether these advanced manufacturing and engineering occupations are paid less than the average salary levels for general professional occupations in Northern Ireland. Maintenance Managers in the advanced manufacturing and engineering sector earn between 35,000 and 50,000 annually. The average salary for general manager, director and senior officials in Northern Ireland ( 38,760.80) also falls within this range. Overall this shows that the salary levels for the operative, skilled trade, associate professional and technical roles in the advanced manufacturing and engineering sector are all lower than the general salary levels for similar occupations in Northern Ireland, with the exception of maintenance fitters. Professional occupations within the advanced manufacturing and engineering sector including process, project, quality and maintenance engineers also 109 This excludes skilled machinists, maintenance fitters and maintenance electricians which fall under the skilled trades, associate professional and technical Standard Occupational Codes. 113

118 receive lower salaries than the general salary levels for professional occupations in Northern Ireland. Table 8:3: Average full-time Salaries by Occupation (April, 2012) Occupation Managers, Directors and Senior Officials General Median Salary ( ) 34, , General Mean Salary ( ) Professional Occupations 36, , Associate Professional and Technical Occupations 29, , Skilled Trades Occupations 21, , Process, Plant and Machine Operatives 19, , Source: Results from the Northern Ireland Annual Survey of Hours and Earnings (Department of Finance and Personnel, 2012) Table 8.4 details the average salaries for a variety of sectors in Northern Ireland, allowing comparisons to be made to the advanced manufacturing and engineering sector. From the industries listed in Table 8.4, it is evident that the administrative and support service sector ( 21,148.40) is the only sector with a lower average salary than the manufacturing sector ( 26,686.40). The information and communication sector earn an average salary of 33, which is 26.0% higher than the average salary for the manufacturing sector. Similar differences in average salary levels are also evident for the financial and insurance sector (23.9% higher) and the education sector (28.8% higher) as they earn 33, and 34, respectively. The human health and social work sector earn on average 29, which is 3, (11.3%) more than the average manufacturing salary. From Table 8.4 it is apparent that the average salary level for the manufacturing sector is significantly lower than other sectors in Northern Ireland. 114

119 Table 8:4: Average full-time Salaries by Sector (April, 2012) Sector Median Salary ( ) Mean Salary ( ) Manufacturing 23, , Construction 23, , Information and Communication 32, , Financial and Insurance activities Administrative and support service activities 28, , , , Education 36, , Human health and Social Work activities 25, Source: Results from the Northern Ireland Annual Survey of Hours and Earnings (Department of Finance and Personnel, 2012) 8.5 Salary Information for Engineering Roles in the Republic of Ireland Table 8.3 gives salary information on a number of engineering jobs in the Republic of Ireland. The data from the table has been sourced from the Morgan McKinley Salary Survey 110 which included the responses of over 300 professionals across the Republic of Ireland to gauge their expectations of salaries and hiring over The survey focused on hiring managers who recruit for permanent full time positions and hiring managers who hire specifically for temporary/contract positions. 110 Salary Survey Ireland, Morgan McKinley Ireland (2013) 115

120 Table 8:5: Salary information for a variety of engineering roles in the Republic of Ireland Role Low ( ) High ( ) Manufacturing Engineer 35,000 60,000 Process Engineer 35,000 65,000 Project Engineer 36,000 65,000 Chemical Engineer 40,000 70,000 Electrical Engineer 32,000 54,000 Engineering Manager (>25 staff) 80, ,000 Engineering Manager (<25 staff) 60,000 75,000 Quality Engineer 35,000 60,000 Maintenance Technician 33,000 42,000 Maintenance Engineer 40,000 55,000 Maintenance Manager 53,000 80,000 Validation Engineer 40,000 60,000 Polymer Engineer 37,000 57,000 R&D Engineer 45,000 65,000 Lean Six Sigma Engineer 45,000 72,000 Automation Engineer 45,000 65,000 Facilities Engineer 43,000 58,000 Design Engineer 42,000 55,000 Source: 2013 Salary Survey Ireland, Morgan McKinley Ireland (2013) 116

121 Using tables 8.2 and 8.3, we have analysed the difference in salaries for engineering occupations in Northern Ireland and the Republic of Ireland. In order to conduct this analysis we need to convert the Republic of Ireland salaries into British Pounds 111. As the salary levels were only available for 8 engineering occupations for Northern Ireland and the Republic of Ireland, we can only provide analysis on the comparison of salaries for these occupations. It is evident that for each of these 8 occupations, the salaries for advanced manufacturing and engineering roles in the Republic of Ireland are clearly higher than salaries for the same occupations in Northern Ireland. This creates the risk of Northern Ireland losing qualified individuals in the sector to the Republic of Ireland. The comparison of these 8 occupations has been provided below in Table 8.4. Table 8:6: Salary Information for a variety of Engineering Roles in Northern Ireland compared to Engineering Roles in Republic of Ireland Role Low High Northern Ireland Republic of Ireland Northern Ireland Republic of Ireland Process Engineer 20,000 29,750 32,000 55,250 Project Engineer 20,000 30,600 32,000 55,250 Quality Engineer 20,000 29,750 32,000 51,000 Maintenance Engineer 20,000 34,000 32,000 46,750 Maintenance Manager 35,000 45,050 50,000 68,000 Automation Engineer 30,000 38,250 40,000 55,250 Facilities Engineer 30,000 36,550 50,000 49,300 Design Engineer 20,000 35,700 40,000 46,750 Source: Brightwater Recruitment Salary Survey Using an exchange rate of 1 =

122 From Table 8.4 it is evident that the largest gaps between Northern Ireland and Republic of Ireland salaries exist within the roles of Process Engineer, Project Engineer, Quality Engineer and Maintenance Engineer and Manager. The role of Facilities Engineer is the occupation whereby the salary level (upper level) is marginally higher in Northern Ireland than the Republic of Ireland. Overall the Republic of Ireland is paying more in salaries than is the norm in Northern Ireland for all positions. This will make it particularly difficult in the border areas to recruit and retain engineers given the more attractive salaries across the border. 8.6 Northern Ireland Graduate Salary Information Universities are now required to collect and analyse the salaries obtained by students graduating from each of their courses. The information in Tables 8.5, 8.6 and 8.7 was collected from the Queen s University of Belfast Salary Survey of Students (2012). It is based on participant responses and it does not contain any analysis of roles or whether previous experience is required as well as being a graduate. Therefore our analysis of the data will be limited however it does provide an insight into the variation in salaries within Northern Ireland. Table 8:7: Salary Levels in the Electronics, Electrical Engineering and Computer Science sector in Northern Ireland Role Salary levels ( ) Supplier Quality Assurance Engineer 22,000-27,000 Systems Design Engineer 25,000 Software Engineer 18,000-25,000 Technical Analyst 24,000 Associate Software Engineer 22,500-25,000 IT Engineer 20,000-23,000 Hardware Design Engineer 22,000 Graduate Configuration Engineer 21,000 Integration Engineer 20,000 Technology Consultant 18,000 Software Support Engineer 15,000 Web Developer 5,000-8,000 Source: Queen s University Belfast Student Salary Survey (2012) 118

123 Table 8.5 shows the range in salaries for roles within the electronics, electrical engineering and computer science sector. The table indicates that salary levels for specific occupations can vary greatly in Northern Ireland, with software engineers earning between 18,000 and 25,000 after graduation. Table 8:8: Salary Levels of Civil Engineering sector in Northern Ireland Role Salary levels ( ) Graduate Civil Engineer 15,000-24,000 Site engineer 22,000 Project Engineer 20,000 Source: Queen s University Belfast Student Salary Survey (2012) Table 8.6 indicates the salary levels for graduates in civil engineering in Northern Ireland. Graduates in civil engineering salaries varied by up to 9,000 in 2012, with the lowest earners receiving 15,000 per year and the highest earners receiving 24,000 per year. This is extremely low for a graduate position in a sector such as engineering which is considered a significant sector of the economy. Table 8:9: Salary Levels of Mechanical and Aerospace Engineering sector in Northern Ireland Role Salary levels ( ) Design Engineer 15,000-22,000 Design Engineer 22,000-24,000 Technical Engineer 19,000 Manufacturing Engineer 22,000-24,000 Calibration Engineer 22,000 Quality Engineer 15,000 Stress Engineer 13,000 Source: Queen s University Belfast Student Salary Survey (2012) 119

124 Table 8.7 details the salary levels for mechanical engineer graduates and aerospace engineer graduates in Northern Ireland. The table indicates that aerospace design engineers ( 22-24k) appear to earn more than mechanical design engineers (15-22k). 8.7 Summary This section has detailed the salary information for a variety of roles in the advanced manufacturing and engineering sector in Northern Ireland. The analysis of this data has identified a variance in salary levels between Northern Ireland, the UK and the Republic of Ireland for a number of roles. The basic median pay of those in clerical and technical roles is 19, for Northern Ireland, which is 13% less than the average UK basic median pay. Manual workers in Northern Ireland are also earning salaries which are 7% less than their counterparts in the rest of the UK. The salary levels for the operative, skilled trade, associate professional and technical roles in the advanced manufacturing and engineering sector are all lower than the general salary levels for similar occupations in Northern Ireland, with the exception of maintenance fitters. Professional occupations within the advanced manufacturing and engineering sector including process, project, quality and maintenance engineers also receive lower salaries than the general salary levels for professional occupations in Northern Ireland. This increases the risk of Northern Ireland s advanced manufacturing and engineering sector losing potential employees who are at an operative, skilled trade, associate professional or professional level to other sectors that pay higher salaries. This issue is also reiterated in table 8.4 which indicates that the manufacturing sector s average salary is significantly lower than a number of other sectors including education, finance, administrative and support services. This will impact the supply of potential employees to the advanced manufacturing and engineering sector as other industries and occupations with higher salaries will appear more attractive. Median pay was also lower in Northern Ireland than the Republic of Ireland for a number of advanced manufacturing and engineering occupations. For some occupations, such as Process Engineers, the salary levels in the Republic of 112 Workforce Pay Benchmark #08 Manual, Clerical & Technical Employees, EEF: Manufacturers Organisation 120

125 Ireland were 66% higher than those in Northern Ireland. Other occupations where Northern Ireland had significantly lower salaries included Project Engineers, Quality Engineers, Maintenance Engineers and Maintenance Managers. This will make it difficult for companies based in or close to the border areas to attract and retain engineers. The salaries of graduates from specific advanced manufacturing and engineering sectors detailed in tables 8.5, 8.6 and 8.7 indicate the variation in salaries in Northern Ireland. In the electronics, electrical engineering and computer sciences sector; software engineer graduates can earn between 18,000 and 25,000 per year. Supplier quality assurance engineer graduates salaries also vary by 5,000; earning between 22,000 and 27,000. For civil engineer graduates there is a variance of 9,000 between the highest ( 24,000) and lowest earners ( 15,000). A similar margin ( 15,000-22,000) is also evident for graduate civil design engineers in Northern Ireland. Design engineer graduates in the aerospace sector can earn between 15,000 and 24,000 per year. A starting salary of 15,000 would appear to be relatively low for an occupation that is deemed high in demand and could possibly be a reason for the difficulties experienced in filling engineering positions as it is unlikely to attract potential entrants to the sector. 121

126 9 THE SUPPLY OF SKILLS 9.1 Introduction In this section, the following element of the Terms of Reference is covered: Assess the supply of skills (lower, intermediate and higher levels) for the sector from our schools, Further Education and Higher Education. The number of enrolments over the three years to 2013 is examined in order to establish the average enrolments per year in courses relevant to manufacturing and, engineering and identify prominent trends. 9.2 Secondary Education GCSE Examination entry numbers, as well as the number of entrants achieving A*-C grades from 2008/09 up to 2010/ in the following relevant subjects: Mathematics 114 ; Design and Technology; Design and Technology: Electronic Production; Design and Technology: Graphic Products; Design and Technology: Resistance Materials; Design and Technology: Textiles; Design and Technology: Systems and Control; and Design and Technology: Product Design. A new Space Science Technology GCSE has also been recently added to the curriculum due to its increasing importance to the UK economy. This GCSE will involve students applying their skills in science, mathematics, engineering and ICT to real-life problems. These problems often have a local perspective, helping learners become better equipped to meet the needs of Northern Ireland's economy in an international context /12 figures are unavailable as of June Note the inclusion of Mathematics as most, if not all engineering courses will require A-level experience in the subject, e.g. Mechanical Engineering at Queen s University specifies at least a grade B in Mathematics as one of its entrance requirements (source: 122

127 The number of entrants for GCSE examinations relevant to advanced manufacturing and engineering and the grade they achieved is detailed in Table 9.1. Table 9:1: Entrants in the relevant GCSE examinations and the number of these achieving A*-C grades Subject 2008/ / /11 No. of Entries achieving grades A*- C Total Entries No. of Entries achieving grades A*- C Total Entries No. of Entries achieving grades A*- C Total Entries Mathematics 13,953 21,768 14,192 21,799 14,061 21,453 Additional Mathematics 2,873 3,170 2,903 3,147 2,921 3,174 Design and Technology 3,317 4,394 3,311 4,297 2,736 3,694 Design and Technology: Electronic Production Design and Technology: Graphic Products Design and Technology: Resistance Materials Design and Technology: Textiles Design and Technology: Systems and Control Design and Technology: Product Design Total Design and Technology , ,033 5,493 4,118 5,493 3,656 5,114 Total 17,986 27,261 18,310 27,292 17,717 26,567 Source: GCSE Entries and Performance in STEM Subjects in NI post-primary schools, 2008/ /11 Department of Education Northern Ireland Table 9.1 shows a slight decrease in the number of entrants in maths and technology subjects (a 2.5% decline from 2008/09 to 2010/11), with an even smaller reduction in the number of entrants achieving A*-C grades in the time 123

128 period (1.5%). Considering maths only, there is again a slight decrease in the total entrants over the time period; however the number of students achieving A*-C grades increased by a minor amount (0.8%). With regards to the Design and Technology based subjects, the number of entrants remained the same from 2008/09 to 2009/10, with a drop of 6.9% in the following year. The number of students achieving A*-C grades increased slightly from 2008/09 to 2009/10, with a subsequent decline of 11.2% in the following year. Over the three specified years, there were a total of 54,013 individuals who achieved an A*-C grade in the relevant subjects. This equates to an average of 18,004 per year A-level Examination entry numbers, as well as the number of entrants achieving A*-C grades from 2008/09 up to 2010/11 in Mathematics 116, and Design and Technology are detailed in the following table. Table 9:2: Entrants in the relevant A-level examinations and the number of these achieving A*-C grades Subject 2008/ / /11 No of Entries achievin g grades A*-C Total Entries No of Entries achievin g grades A*-C Total Entries No of Entries achievin g grades A*-C Mathematics Total Entries Design and Technology Total Source: Source: GCSE Entries and Performance in STEM Subjects in NI post-primary schools, 2008/ /11 Department of Education Northern Ireland Table 9.2 shows an increase in the number of entrants in maths and technology based subjects from 2008/09 to 2010/11 (13.7%, overall). The number of entrants achieving A*-C grades experienced a similar increase of 12.3% over 115 Source: GCSE Entries and Performance in STEM Subjects in NI post-primary schools, 2008/ /11 Department of Education Northern Ireland. 116 Note the inclusion of Mathematics as most, if not all, Engineering related courses will require a degree of experience in the subject, as previously stated. 124

129 the time period. Considering Design and Technology separately, it can be seen that there is an increase in the number of entrants (15.4%), as well as the number of students achieving A*-C grades (11.6%). Similarly, Mathematics showed an increase of 13.2% for total entrants over the same time period, as well as a 12.5% increase in those achieving A*-C grades. Over the three specified years, there were a total of 9,757 individuals who achieved an A*-C grade in the relevant subjects. This equates to an average of 3,252 per year 117. Overall, the relevant A-level subjects presented an increase in entrants/a*-c grade achievements from 2008/09 to 2010/11, while the GCSE subjects tended to show a small decline in these areas. 9.3 Apprenticeships ApprenticeshipsNI There are a number of apprenticeships available in Northern Ireland within the advanced manufacturing and engineering sector. Apprenticeships which are offered in Northern Ireland provide National Vocational Qualification levels 1, 2 and 3. The Apprenticeship programmes available in Northern Ireland are funded 118 by the Department for Employment and Learning. ApprenticeshipsNI is a Northern Ireland programme that offers training to 16 year olds and over, across a wide range of jobs. It provides recognised training and qualifications to new and existing employees to help meet the demands of local employers. Figures for the number of participants on programme-led apprenticeships via ApprenticeshipsNI are available for a wide range of areas. This subsection will consider only those that are relevant to the manufacturing sector, namely: Electrical Distribution and Trans. Engineering; Engineering; Engineering Construction; 117 Source: GCSE Entries and Performance in STEM Subjects in NI post-primary schools, 2008/ /11 Department of Education Northern Ireland is this footnote needed included on previous page % of external training costs for under 25 year-olds and 50% of external training costs (as of 27 th August 2013) for over 25 year olds for apprenticeships in Manufacturing and Engineering sectors 125

130 Engineering Industry; Land Based Service Engineering; Land Based Engineering; Mechanical Engineering Services (HVACR); and Mechanical Engineering Services (Plumbing). The training component of these is delivered by a number of training organisations across Northern Ireland, including Further Education Colleges, Bombardier and SEMTA. Each of the Further Education Colleges are involved in the delivery of apprenticeship training to some extent, and all are accredited to deliver training. Tables 9.3 and 9.4 detail the number of participants in each of these areas and a breakdown of participants by sex and framework (note that the data provided had been rounded slightly to prevent the identification of individuals, therefore some of the totals in the tables may not add exactly). Table 9:3: Participants on ApprenticeshipsNI in relevant areas for Electrical Distribution and Trans. Engineering Engineering Engineering Construction Engineering Industry Land-Based Service Engineering Land-Based Engineering Mechanical Engineering Services (HVACR) Mechanical Engineering Services (Plumbing) Total 888 1,021 1,092 1, Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2012/13 There are currently 996 participants on ApprenticeshipsNI which indicates a 12.2% increase in total apprentices since However, in the past year the total number of participants has fallen by 3.6%. The current apprenticeships 126

131 with the most participants include engineering (38.0% of total participants) and engineering Industry (35.9% of total participants). The main reason for the overall increase in ApprenticeshipsNI participants since 2009 has been the increase in engineering apprentices from 201 participants to 378 participants in 2013 (88.1%). Table 9:4: Participants on ApprenticeshipsNI in the relevant framework by gender (2011/12) Framework Male Female Total Engineering Industry Land-Based Engineering Mechanical Engineering Services (HVACR) Mechanical Engineering Services (Plumbing) Total Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2011/12 Table 9.4 shows that the overwhelming majority of participants in manufacturing based apprenticeships are male (98.7%). The engineering industry is the only noted framework with female participants (2.3% of the total). The total expenditure by ApprenticeshipsNI over the 2009/10 financial year was 24,635,203. The budget for 2010/11 was totalled at 18,361,998, with an anticipation of a higher expenditure at the time of writing Pre-Apprenticeships A pre-apprenticeship programme is also available for the advanced manufacturing and engineering sector. SummitSkills Sector Skills Council provides training for building services engineering. This gives participants basic employment and trade skills, which in turn provide a higher chance of acceptance onto a full apprenticeship programme in the future. The course is delivered over a 52 week period, consisting of the following: Employment training; 119 Source: Freedom of Information Response 19 May

132 Technical training; and Workplace sampling. There are no entry requirements for the course, although taking an aptitude test beforehand is recommended. Completion of the technical training element rewards participants with a recognised Vocationally Related Qualification; EAL Level 2 Intermediate Certificate in Engineering and Technology, and with conclusion of the whole framework, participants would be eligible to progress onto further related qualifications. Pre-Apprenticeships are provided by a range of suppliers including the following Sector Skills Councils: Lantra - Environmental and Land-Based Sector; People 1 st ; Habia; Skillsmart Retail; Improve Ltd for Food Manufacturing; IMI - Automotive Skills; and SEMTA ETI Evaluations of Approved Training Suppliers for ApprenticeshipsNI Table 8.5 provides details on Education and Training Inspectorate evaluations of approved training suppliers for ApprenticeshipsNI: Of the 16 ApprenticeshipsNI suppliers listed in the table, 50.0% (n = 8) were given an overall performance level of Good. One in four of the apprenticeships were Satisfactory while 12.5% (n = 2) were considered inadequate. Common weaknesses identified in these poorly rated suppliers included: Lack of quality and consistency in training, teaching and learning; Poor retention rates; Lack of effective management and effective leadership in the provision of the apprenticeships; and Lack of appropriate work placements for the majority of trainees on the programme. 128

133 The best suppliers of ApprenticeshipsNI were Impact Training (NI) Limited, Belfast who were rated Very Good and Bombardier Aerospace who were rated Outstanding. The Education and Training Inspectorate identified no weaknesses in Bombardier s apprenticeship but listed the following strengths: Outstanding leadership and management of the apprenticeship programme; Excellent standards of work achieved by almost all of the apprentices; Outstanding practical training to develop the apprentices occupational skills; Very good provision to develop the apprentices technical knowledge at the most appropriate level; Very good care, support and guidance arrangements, particularly the high levels of pastoral care; Outstanding monitoring and reviewing of the apprentices progress and achievements in both directed and in workplace training; and Retention, achievement and progression rates, which are outstanding at 91%, 100% and 100% respectively. 129

134 Table 9:5: ETI (Education and Training Inspectorate) Evaluations Inspection Reports Weaknesses Identified by the Education and Training Inspectorate (ETI) 1 st Jan 31 st Dec st Jan 31 st Dec 2013 A4e Inadequate March 2013 More effective strategic leadership and management of the ApprenticeshipsNI provision; More effective processes for self-evaluation and quality improvement planning, which are underpinned by the collation, analysis and interpretation of up to date, reliable and accurate data; 1 st Jan 31 st Dec st Jan 31 st Dec 2012 Better curricular leadership, including more effective integration of the apprentices essential skills development within their vocational learning; To review the rigour and appropriateness of the pre-entry guidance for apprentices and the purpose and effectiveness of the apprentices personal training plans; To enhance the quality and consistency of the teaching, training and learning, with a particular focus on extending and enhancing the apprentices technical knowledge and occupational skills; and To address urgently the inadequate quality of the provision in the professional and technical areas of retail and customer service, and hospitality and catering. Northern Regional College Satisfactory November 2012 The Principal and senior management team have been too slow to identify and remedy the very low outcomes on the Training for Success programme, particularly the Apprenticeship strand; The Inspectorate has limited confidence in the College s self-evaluation and quality improvement planning processes in work-based learning; In further education, the use of reliable management information by staff to monitor performance at course team level is underdeveloped; and 130

135 Inspection Reports Weaknesses Identified by the Education and Training Inspectorate (ETI) In the work-based learning provision, it ranges from very good to inadequate and is inadequate overall. Plumbing & Mechanical Services Training (NI) Limited Good February 2012 The review processes are ineffective and do not adequately inform the personal training plans; There is inconsistent monitoring of a minority of the apprentices in their National Vocational Qualification (NVQ) assessments in the workplace; and There is a requirement for further professional development for newly recruited and recently promoted staff. Rutledge Recruitment and Training Satisfactory October 2012 Self-evaluation and quality improvement planning is satisfactory. A good start has been made in the use of tutor observations to inform improvement planning and good systems are in place to support self-evaluation, including regular standardisation meetings. While the process is embedded, it is not sufficiently rigorous in identifying and addressing key weaknesses in the quality of provision or in training and learning; There is a good match between the qualifications undertaken by most of the apprentices and their job roles, though the quality of the personal training plans and of the monitoring and review process across the organisation are just satisfactory; and The retention rates on the Apprenticeship strand of Training for Success are too low, across most of the provision. 1 st Jan 31 st Dec st Jan 31 st Dec 2011 Bombardier Aerospace Outstanding October 2011 No weakness identified; Outstanding leadership and management of the apprenticeship programme; Excellent standards of work achieved by almost all of the apprentices; Outstanding practical training to develop the apprentices occupational skills; 131

136 Inspection Reports Weaknesses Identified by the Education and Training Inspectorate (ETI) Very good provision to develop the apprentices technical knowledge at the most appropriate level; Very good care, support and guidance arrangements, particularly the high levels of pastoral care; Outstanding monitoring and reviewing of the apprentices progress and achievements in both directed and in workplace training; and Retention, achievement and progression rates, which are outstanding at 91%, 100% and 100% respectively. Impact Training (NI) Limited, Belfast Very good May 2011 Modest overall retention rate; and Lack of work placements for a minority of the trainees. Seven Towers Training Inadequate January 2011 Unsatisfactory quality of the provision for engineering in Larne Skills Development; Inadequate leadership and management of the engineering provision by Seven Towers, particularly the arrangements for the monitoring and evaluation of the sub-contracted training; Shortcomings in the quality of the training and learning in a significant minority of the directed training sessions observed across the professional and technical areas inspected; Lack of appropriate work placements for a majority of the trainees on the Training for Success programme; and Modest overall retention rate (at 69%) across the professional and technical areas inspected. South Eastern Regional College Good February- March 2011 Number of participants who are waiting to access the programme and/or a work placement. Springvale Learning Satisfactory June 2011 Leadership and management of the provision, including the inadequate self-evaluation and 132

137 Inspection Reports Weaknesses Identified by the Education and Training Inspectorate (ETI) Ltd quality improvement planning processes; Inadequate use of the training review process to update personal training plans, engage employers and set training and progress targets for the trainees and apprentices; and Overall average rates of retention and progression, at 66% and 52% respectively. Larne Skills Development Limited Satisfactory November 2011 The inspection has identified areas for improvement in leadership and management, and in training and learning which need to be addressed if the needs of all the apprentices and trainees are to be met more effectively. Inadequate quality of the training accommodation in Ballymena, which adversely affects a minority of the engineering apprentices and trainees; Inadequate careers education, information advice and guidance provision, to promote all of the available progression opportunities open to apprentices and trainees; and Unsatisfactory retention rates for the Apprenticeship programme. 1 st Jan 31 st Dec st Jan 31 st Dec 2010 Coalisland Training Services Ltd Good November 2010 Low recruitment patterns across the ApprenticeshipsNI and Training for Success programmes; Further development of the careers education, information, advice and guidance (CEIAG) provision, particularly for the trainees on the Programme-Led Apprenticeship programme in order to promote and support their understanding of the available progression pathways; and Increased opportunities for the tutors to share and promote good practice in training and learning. Engineering Training Council Northern Ireland Good September 2010 Better use of Personal Training Plans to record and track the apprentices progress in the development of their occupational and essential skills; Quality of the co-ordination of the directed training for a few of the apprentices; and 133

138 Inspection Reports Weaknesses Identified by the Education and Training Inspectorate (ETI) Further embedding of the quality assurance processes across all areas of the provision, but particularly in the essential skills provision. 1 st Jan 31 st Dec st Jan 31 st Dec 2009 Belfast Metropolitan College Good February 2009 Quality assurance arrangements need to be extended, to ensure that centre managers monitor key performance indicators on a regular basis, including the trainees attendance and progress in the essential skills, to effect further improvements in retention and success rates. North West Regional College Southern Regional College Good May 2009 The need to ensure that systems are in place for the vocational tutors to work with employers in setting and monitoring training plans for the remaining trainees on Jobskills programmes. Good April 2009 Expansion of the Skills for Your Life and extended Skills for Work programmes, to make appropriate and suitable provision available throughout the region for trainees with major barriers to employment, including those with learning difficulties and disabilities; and Further design and implementation of robust quality assurance and improvement processes for the Training for Success and ApprenticeshipsNI programmes. 1 st Jan 31 st Dec st Jan 31 st Dec 2008 Oriel Training Services Good November 2008 Need to review further the timetabling arrangements for the essential skills provision to demonstrate best practice and best meet the needs of the trainees. Source: 134

139 9.4 Further Education (FE) Colleges This section details the numbers enrolling in relevant subjects in FE colleges and then details the numbers achieving relevant qualifications. There are six Further (and Higher) Education Colleges in Northern Ireland. These are: Belfast Metropolitan College (BMC); South West College (SWC); Southern Regional College (SRC); Northern Regional College (NRC); North West Regional College (NWRC); and South Eastern Regional College (SERC). Data on further education enrolments is available on the following subjects: Health, Public Services & Care; Science & Mathematics; Agriculture, Horticulture & Animal Care; Engineering & Manufacturing Technologies; Construction, Planning & the Built Environment; Information & Communication Technology; Retail & Commercial Enterprise; Leisure, Travel & Tourism; Arts, Media & Publishing; History, Philosophy & Theology; Social Sciences; Languages, Literature & Culture; Education & Training; Preparation for Life & Work; and Business, Administration & Law Belfast Metropolitan College Belfast Metropolitan College (BMC) is one of the largest Further Education Colleges in the United Kingdom with over 49,000 full-time and part-time enrolments. 135

140 Centres of Excellence The School of Electronic and Computing Technologies at Belfast Metropolitan College (BMC) has been presented with the status of Centre of Excellence by Prodigy Learning for their development and implementation of professional IT qualifications in the curriculum. BMC has also received accreditation as a Centre of Excellence for Composites and a Founder Provider of the Composite Skills Alliance. SEMTA, the Composite Skills Alliance and other independent consultants have led the development of new qualifications in this subject area with key input from Colleges such as BMC. Awarding bodies such as City & Guilds, Engineering Training Council and Edexcel have drawn up the specific criteria of delivery and as a result, qualifications across key vocational levels are now available: Level 2 NVQ in Composite Engineering; Level 3 technical certificate in Engineering Composites; and Level 3 composite specific units in other technical certificate pathways such as Aeronautical Engineering. BMC can also deliver composite units or pathways at NVQ Level 3, units as part of the Performing Engineering Operations (PEO) Level 2 programme and through various other methods Major Facilities / Services The Centre of Excellence for Composites provides a range of services and a number of comprehensive solutions and advice on: Product & prototype manufacturing; Material selection; Process selection; Process optimisation; Design for manufacture; Manufacturing testing; and Manufacturing troubleshooting Collaboration with Industry Belfast Metropolitan College have recently opened their composites workshop in their new 'e3' Campus. The e3 Campus is designed to assist businesses in the areas of employability, entrepreneurship and economic engagement. The 136

141 composites workshop provides easy access to businesses looking to develop products, materials or ideas with an 'easy-access' policy. The 'easy-access' policy promoted by the College enables use of advanced manufacturing equipment for businesses without the high initial investment costs. In many cases, the College sources grant assistance for such work, resulting in minimal expenditure to the company concerned. The College s workshop offers training courses in a wide range of areas such as accredited short courses through the Excellence Academy or customised training specific to the business needs Northern Regional College The Northern Regional College serves a large geographical area across the north-east of the Province and Mid-Ulster. The College offers over 700 courses and has 5,000 full-time and 20,000 part-time students who study across campuses in Ballymena, Ballymoney, Coleraine, Larne, Magherafelt and Newtownabbey Centres of Excellence The Northern Regional College is a recognised Centre of Excellence in Manufacturing Engineering, since it was established in Knowledge transfer is offered in the areas of computer aided design (CAD), computer numerical control (CNC), CAD/CAM, coordinate measurement (CMM), robotics, rapid prototyping, pneumatics & electropneumatics, hydraulics, programmable logic controllers (PLC) and electrical and mechanical maintenance programmes. Recently an R&D section has been established within the College to economically engage with local industry in helping to develop R&D solutions for specific manufacturing problems, both in larger companies and SME s Major Facilities / Services The Northern Regional College offers businesses the following types of support: Research and Development in the areas of expertise indicated; Bespoke training programmes in the areas of expertise indicated; Comprehensive range of part-time and full-time engineering courses; 137

142 Lecturer company placement to aid in development of in-house programmes; Access to modern Precision Engineering resources; Access to modern Robotic equipment; Access to modern Mechatronics equipment; and Access to modern fabrication technologies South West College South West College (SWC) has four campuses in Cookstown, Dungannon, Enniskillen and Omagh. The College has approximately 550 staff and 25,000 enrolments Centres of Excellence SWC has developed an InnoTech Centre with the aim of nurturing and growing innovation and technology through the creation of partnerships with other colleges, businesses and organisations outside Northern Ireland. The Centre works with local businesses through knowledge exchange and technology development Southern Regional College Southern Regional College (SRC) is the largest Further Education College outside of Belfast in Northern Ireland. With a total of six campuses across the counties of Armagh and Down and covering four district councils, they currently cater for approximately 35,000 students each year and have in excess of 1,100 members of staff Centres of Excellence GreenTEC is a new Centre of Excellence for the Construction Industry based at the SRC s Greenbank Campus. GreenTEC offers professional, technical and accredited training, seminars and demonstrations in sustainable energy areas such as RHI (Renewable Heat Incentive), Thermography, Energy Efficiency, Energy Management and the design and installation of renewable technologies such as solar thermal, heat pumps and solar PV. The facility aims to promote knowledge sharing, provide industry support by nurturing new research and development opportunities, facilitating industry testing and product development and providing a platform to launch new and innovative solutions to the construction sector. 138

143 Major Facilities / Services The i3 Centre at Southern Regional College offers practical support to start up and existing businesses via R&D projects, one to one mentoring, knowledge transfer and specialist training services. The Research and Development staff work with businesses providing knowledge transfer and specialist support North West Regional College The North West Regional College (NWRC) has around 40,000 students participating in higher and further education Centres of Excellence The Software Engineering Centre of Excellence allows the College to strengthen its partnership with local industry and provides increased work placement opportunities for students South Eastern Regional College The South Eastern Regional College (SERC) has over 30,000 annual enrolments and 1,200 staff. The College aims to build a hub for scientific and technological capabilities, professionalising the workforce and encouraging innovation, enterprise and entrepreneurship and, overall, supporting and developing careers Major Facilities / Services SERC offers support to local businesses and provides access to specialist industry equipment, knowledge and skills to research and develop new product ideas. The College can support product development from the design stage to the actual prototype and provide quality control services for material testing. SERC have worked with BT, Bombardier Aerospace, Nitronica, Canyon Europe, Red Raven, Randox Laboratories and Coca Cola in the past Enrolments in FE Institutions Enrolment figures for Science & Mathematics and Engineering & Manufacturing Technologies over the three years leading to 2013 is presented in the following tables. 139

144 Table 9:6: Enrolments in Further Education Institutions in 2009/10 Subject Full-Time Part-Time Total HE 120 Courses FE 121 Courses HE Courses FE Courses Science and Mathematics ,948 9,010 Engineering & Manufacturing Technologies 180 3, ,872 11,163 Total 248 4,083 1,022 14,820 20,173 Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2009/10 Table 9:7: Enrolments in Further Education Institutions in 2010/11 Subject Full-Time Part-Time Total HE Courses FE Courses HE Courses FE Courses Science and Mathematics ,030 7,083 Engineering & Manufacturing Technologies 243 3, ,623 10,979 Total 314 4, ,653 18,062 Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2010/ Higher Education Courses are equivalent to National Qualification Framework (NQF) & Qualifications and Credit Framework (QCF) levels 4 and above. (e.g. BTEC Higher National Diplomas (HND), Certificates (HNC) and Awards, NVQ level 4) Apprenticeships are equivalent to QCF level 4. Source: Office of Qualifications and Examinations Regulation 121 Further Education Courses are equivalent to National Qualification Framework (NQF) & Qualifications and Credit Framework (QCF) levels 3 and below. (e.g. GCSE, A-level, BTEC level 3) 140

145 Table 9:8: Enrolments in Further Education Institutions in 2011/12 Subject Full-Time Part-Time Total HE Courses FE Courses HE Courses FE Courses Science and Mathematics ,905 5,810 Engineering & Manufacturing Technologies 310 3,365 1,065 6,490 11,225 Total 390 4,055 1,195 11,395 17,035 Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2011/12 Tables 9.6, 9.7 and 9.8 demonstrate that enrolments in FE Institutes have fallen by 15.6% 122 between 2009/10 to 2011/12. Enrolments in Science and Mathematics have declined by 35.5% 123 over the past three years. For Engineering and Manufacturing Technologies, there was almost no change 124 over the same time period. The following table demonstrates a three year average for enrolments in Science and Mathematics and Engineering and Manufacturing Technologies. Table 9:9: Average Enrolments in Further Education Institutions in from Subject HE Courses FE Courses Total Science and Mathematics 219 7,080 7,299 Engineering & Manufacturing Technologies ,960 11,124 Total 1,383 17,040 18,423 Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2011/ From 20,173 total enrolments in 2009/10 to 17,035 total enrolments in 2011/ From 9,010 total enrolments in 2009/10 to 5,810 total enrolments in 2011/ There was a net increase of 0.6% in enrolments from 2009 to There was a decline of 1.6% between 2009/10 and 2010/11 and an increase of 2.2% between 2010/11and 2011/

146 Table 9:10: Average Part-time and Full-time Enrolments in Further Education Institutions in from Subject Part-time Full-time Total Science and Mathematics 4, ,915 Engineering & Manufacturing Technologies 3,542 7,581 11,123 Total 7,598 8,440 16,038 Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2011/12 Table 9.9 indicates that on average 18,423 enrolments were made into courses for Science and Mathematics and Engineering and Manufacturing technologies during the period Table 9.10 indicates that over the three year period, 7,598 students have enrolled in part-time courses related to advanced manufacturing and engineering and 8,440 have enrolled in full-time courses Collaborative FE Provision Across Northern Ireland FE colleges provide a wide range of engineering/ ICT facilities and expertise across Northern Ireland. It is important that they work together to ensure that people who wish to study these specialisms can access them across Northern Ireland not only in the regional areas. This could be actioned by the Colleges working together, rather than seeking to replicate the courses in each college Achievements in FE Institutions Table 9.11 details the professional and technical retention and achievement data for subjects relevant to advanced manufacturing and engineering for the last two years Note: This data was not available for 2009/10 142

147 Table 9:11: Achievement Data by Subject Area, 2010/ /12 Subject Number of Achievements 2010/ /12 Science and Mathematics 3,345 2,850 Engineering & Manufacturing Technologies 5,150 5,935 Total 8,495 8,785 Source: Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2011/12 Table 9.11 shows 8,495 and 8,785 individuals obtained achievements in relative subject areas to advanced manufacturing and engineering for 2010/11 and 2011/12 respectively (an average of 8,640 achievements per year). Overall there has been an increase of 3.4% in the number of qualifications obtained over the two years. 9.5 Higher Education (HE) Institutions This section details the numbers enrolling in relevant subjects in HE Institutions and then details the numbers achieving relevant qualifications. There are two Higher Education Institutions in Northern Ireland that provide courses related to advanced manufacturing and engineering. These are: University of Ulster; and Queen s University Belfast University of Ulster The University of Ulster's international reputation for research excellence has received UK-wide recognition by the Research Assessment Exercise (REA) 2008, with 86% of its research activity judged to be of international quality. The Faculty of Computing and Engineering at the University of Ulster is involved in teaching, research and enterprise in the areas of Computing and Electrical & Mechanical Engineering. The Facility is structured as four academic Schools across three campuses: Coleraine, Jordanstown and Magee. The schools are: Computing and Information Engineering at Coleraine; Computing and Intelligent Systems at Magee; 143

148 Computing and Mathematics at Jordanstown; and Engineering at Jordanstown. There is also a Research Graduate School, responsible for all postgraduate research students in the Faculty, and two Research Institutes, which oversee research in specific areas: Computer Science Research Institute; and Nanotechnology & Advanced Materials Research Institute Centres of Excellence The Engineering Research Institute (ERI) is one of a small number of high priority research areas identified as such by the University of Ulster. Over a number of years, it has had a very high profile in research and impact associated with structural and advanced functional materials, relating to medical devices, tissue engineering, nanomaterials, plasmas, photocatalysis, coatings, sensors, composites and metal forming. In particular the Institute has focused on their three research centres: The Nanotechnology and Integrated Bioengineering Centre (NIBEC); the Engineering Composites Research Centre (ECRE) and the Advanced Metal Forming Centre (AMFoR). These research Centres constitute a wide range of engineering led disciplines such as Biomaterials, Biomedical Engineering, Clean Technology, Connected Health Devices, Nanotechnology, Tissue Engineering & Regenerative Medicine and Metal Forming. The Institute has brought together a multi-disciplinary group of staff from a range of disciplines to undertake various forms of advanced materials research, including composite structures, materials characterisation, sensor fabrication, biomaterial processing, plasma processing, metal forming, nanoscience and nanofabrication. 144

149 9.5.2 Queen s University Belfast Queen s Mechanical and Aerospace Engineering School was rated as one of the top 10 Mechanical Engineering Schools in the 2008 RAE with 65% of its research deemed to be internationally excellent. 55% of the Civil Engineering School s RAE was also deemed to be internationally excellent Centres of Excellence School of Mechanical and Aeronautical Engineering The School of Mechanical & Aeronautical Engineering at Queen s University Belfast has been recognised by the Department for Employment and Learning (DEL) as a Centre for Excellence in Teaching and Learning (CETL) in Active and Interactive Learning. The Centre of Excellence is funded by Invest Northern Ireland under the PEACE II initiative with support from Bombardier Aerospace, the Northern Ireland Aerospace Consortium and the Department for Employment and Learning. It conducts strategic research in order to support the Aerospace industry both locally and internationally whilst continuing the University's research in the traditional disciplines of Aerodynamics, Structures and Materials, Manufacturing and Design. A major focus of the Centre is the integration of engineering disciplines into an overall systems framework. Such an approach seeks to introduce the best cost and performance at an early stage of design, within the context of Integrated Product and Process Development, Multidisciplinary Optimisation and Technology Transfer. School of Planning, Architecture and Civil Engineering The Environmental Engineering Research Centre (EERC) is interdisciplinary with staff backgrounds in Civil Engineering and Environmental/Earth Sciences providing engineering approaches to key environmental and sustainability issues. Two over-arching research themes have been identified within the cluster; Marine Renewable Energy (MRE) and Subsurface Systems and Engineering (SSE). Current MRE focus is on tidal stream devices and the environmental impact of marine renewables on coastal processes. Strong collaboration with industry and other end users in wave energy has seen current funding exceed 2 million. A center of excellence for Groundwater research (the Groundwater group) within SSE has been awarded significant grants approaching 3 million. 145

150 9.5.3 Major Facilities / Services for QUB and UU The Northern Ireland Advanced Composites and Engineering Centre (NIACE) is a technology hub for the research and development of advanced engineering and advanced materials technologies across a range of industrial sectors. It has capacity for 120 research and technical staff (from industry and academia). The facilities provided by NIACE include: Secured Offices; Workshops (Fabrication and Processing); Laboratories (Mechanical Testing, Polymer Processing, 3D Weaving, Microscopy, Thermal Analysis); Meeting Rooms; and Design and Visualisation Facility. NIACE aims to: Help Northern Ireland s manufacturing sector grow and develop its capabilities, enabling it to compete more successfully on both a national and global scale; Develop world-class technology solutions for a breadth of manufacturing applications; Enable companies to work at a scale and in collaborations not currently feasible; Act as a portal for local companies to gain access to funding sources and new business outside of Northern Ireland; Provide a creative environment, enabling the generation of innovative collaborative projects between industry and academia; and Perform superior research, leading to the development and rapid transfer of skills and knowledge between universities and industry. 146

151 9.5.4 Enrolments in HE Institutions Data on the total higher education enrolments is available for a wide variety of subjects. They are the most relevant, figures for higher education enrolment in Engineering & Technology, as well as Mathematical Sciences 126 and are shown in the following tables (note that the data provided had been rounded slightly to prevent the identification of individuals, therefore some of the totals in the tables may not add exactly). Table 9:12: Total Enrolments in Higher Education Institutions in 2009/10 Subject Full-Time Part-Time Total Mathematical Sciences Male Female Total M/F Male Female Total M/F Engineering & Technology 2, , ,170 Total 2, , ,520 Source: Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2009/10 Table 9:13: Enrolments in Higher Education Institutions in 2010/11 Subject Full-Time Part-Time Total Mathematical Sciences Male Female Total M/F Male Female Total M/F Engineering & Technology 2, , Total 2, , Source: Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2010/ Mathematical Sciences are much less relevant than Engineering Technologies with regards to this research, but some graduates from this subject area may proceed into the manufacturing sector. 147

152 Table 9:14: Enrolments in Higher Education Institutions in 2011/12 Subject Full-Time Part-Time Total Mathematical Sciences Engineering & Technology Male Female Total M/F Male Female Total M/F , , Total 2, , Source: Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2011/12 Tables 9.12, 9.13 and 9.14 show that there has been almost no change in the enrolment in the relevant higher education courses, with only a 0.3% decline over the past three years (note that there was however a slight 5.4% increase in 2010/11). With regards to Mathematical Sciences alone, there has been a minor increase (7.1%) in enrolments over the past three years. Considering Engineering & Technology only, there was a very minor drop in enrolments over the past three years (only 1.1%), with a 6.0% surge in enrolments during 2010/11. As a proportion of the total enrolments in Northern Ireland Higher Education Institutions, the enrolments in Mathematical Sciences and Engineering & Technology accounted for 6.9% of the overall amount. Considering the male/female divide in enrolments, the vast majority of students on an Engineering & Technology course are male (80.0% in 2009/10, 80.1% in 2010/11 and 81.5% in 2011/12). Enrolments in Mathematical Sciences are more equal however, with 45.7% being male in 2009/10, 48.6% in 2010/11 and 52% in 2011/12; an increase year on year Higher Education Achievements This section details the numbers of graduates in courses relevant to advanced manufacturing and engineering. The Higher Education Institutions delivering Mathematical Sciences and Engineering and Technology qualifications in Northern Ireland are detailed in Table This table will include the data from Northern Ireland s Higher Education Institutions Queen s University Belfast and University of Ulster. 148

153 Table 9.15: Number of Students obtaining Qualifications related to Advanced Manufacturing and Engineering by qualification type 2009/ /12 Subject Mathematical Sciences Engineering and Technology Total 2009/ / / / / /12 First Degree ,785 Other Undergraduate All Undergraduate ,845 Doctorate Other Higher Degrees Other Post-graduate All Post-graduate Total ,640 Source: Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2009/ / Note: The data provided had been rounded slightly to prevent the identification of individuals, therefore some of the totals in the tables may not add exactly. 149

154 Table 9.15 demonstrates that over the last three years a total of 2,640 individuals graduated with a degree in courses related to advanced manufacturing and engineering. This is an average of 880 graduates per year. The majority (90.2%) of these graduates were in Engineering and Technology courses. The table also indicates the trend in graduates over the last three years for advanced manufacturing and engineering related courses. Mathematical Sciences has experienced a 23.8% decline in the number of graduates since 2009/10. Overall Engineering and Technology graduates have increased by 13.2% since 2009/10 however the number has declined marginally (3.6%) in the last year. 30.5% of qualifications obtained in the last three years have been postgraduate degrees. This indicates that almost one in three graduates is highly qualified in advanced manufacturing and engineering related subject areas. Table 9.16: Higher Education Institution Graduates from Engineering and Technology Courses by Subject for 2011/ Subject Area General engineering 120 Safety engineering 5 Fire safety engineering 30 Engineering design 15 Civil engineering 205 Structural engineering 10 Environmental engineering 35 Mechanical engineering 95 Aerospace engineering 30 Aeronautical engineering 0 Electronic and electrical engineering /2012 Graduates 128 In 2011/2012 course fees were 3,375 per year (Sources: Queen s University Belfast Tuition Fees and Related Charges; University of Ulster: Tuition and Miscellaneous Fees 2011/12). Note: The majority of engineering courses in Northern Ireland HEI s are 4 year courses (+1 year for placement/year in industry) 150

155 Subject Area Telecommunications engineering 5 Production and manufacturing engineering 25 Manufacturing systems engineering 0 Chemical, process and energy engineering 5 Chemical engineering 50 Engineering not elsewhere classified 0 Biotechnology 30 Energy technology 30 Musical instrument technology /2012 Graduates Source: HESA (Note: Figures have been rounded to the nearest 5 so they total may not add up to 815 total mentioned previously) 9.6 Qualifications in Advanced Manufacturing and Engineering Introduction In this section we will detail the qualifications that exist in advanced manufacturing and engineering Qualifications Appendix 4 demonstrates the availability of qualifications from further and higher education institutions for advanced manufacturing and engineering in Northern Ireland. 9.7 Up-skilling in the Advanced Manufacturing Sector This section details the current support /programmes being used by employers in order to up-skill employees in the manufacturing sector in Northern Ireland. A summary of these programmes is presented in the following table. Table 9:17: Programmes Available to Support Companies Programme SEMTA World Skills Assessment Against Needs SEMTA secured funding from DEL to support candidates from Northern Ireland who entered UKSkills engineering competitions in CAD, CNC milling, industrial electronics and mechatronics. Workshops and coaching days were held to standardise training and improve entrants chances of UK medals and a place in the 151

156 Programme DEL Skills Solutions DEL Essential Skills DEL Assured Skills DEL Management and Leadership DEL Customised Training DEL - YES(Youth Employment Scheme) Invest NI Assessment Against Needs UK squad at WorldSkills DEL provides employers with a learning and skills service which identifies and meets their training needs by providing information, support and signposting to the most appropriate solution. This Programme aims to improve adult literacy, numeracy and information communication technology (ICT). This programme is designed for existing companies wishing to expand and potential new inward investors looking to locate their business in Northern Ireland that their skills needs can be provided for in Northern Ireland. Offers a comprehensive portfolio of accredited training options to help employers meet the specific development needs of their managers and leaders at all levels. Designed to enhance the skills base within a Small to Medium Enterprise (SME) business, this programme looks to create a tailored project for a business where no other training product exists at Level 2 or above. YES is a voluntary scheme aimed at year olds who require help and support to seek full-time employment. It provides opportunities for work experience and placement with an employer to provide a chance to sample particular types of work and develop employability skills. Invest NI offer tailored support to business through the Skills Growth Programme. The programme aims to improve the key skills of staff such as team working and problem solving. A Skills Accelerator Grant is also available to small companies that are exporting or are ready to export. Most sectors are eligible, including digital and creative, manufacturing and tradable services. The grant will cover up to 10,000 of staff training costs. 9.8 Summary The number of people gaining educational experience in areas relevant to the manufacturing sector can be summarised as follows: Secondary Education: Overall the number of entries achieving grades A-C in GCSE Mathematics have marginally increased over the 2008/09 period to 2010/11 by 108 entries; 152

157 However, the number of Design and Technology entrants who achieved grades A-C have declined by 377 (9.3%); At GCSE level, from the years 2008/09 to 2010/11, there were 42,206 individuals that gained an A*-C grade in Mathematics. This equates to an average of 14,069 per year; At A-level, from the years 2008/09 to 2010/11, there were 7,752 individuals that gained an A*-C grade in Mathematics. This equates to an average of 2,584 per year; At GCSE level, from 2008/09 to 2010/11 there were 11,807 individuals that gained an A*-C grade in Design and Technology, or a variant of this. This equates to an average of 3,936 per year; and At A-level from 2008/09 to 2010/11 there were 2,005 individuals that gained an A*-C grade in Design and Technology. This equates to an average of 668 per year. Further Education: Overall there has been a declining trend in the number of enrolments to Further Education Institutions from 2009/10 to 2011/12. The total number of enrolments has fallen by 3,138 (15.6%) since 2009/10; In the last three years Science and Mathematics enrolments have fallen by 35.5% while Engineering and Manufacturing Technology enrolments have marginally increased by 62 enrolments; Over the past three years, there have been a total of 21,903 enrolments in Science and Mathematics at Further Education institutions. This gives an average of 7,301 per year; Over the past three years, there have been a total of 33,367 enrolments in Engineering & Manufacturing Technologies at Further Education institutions. This gives an average of 11,122 per year; Over the last two years there have been 17,280 achievements obtained by individuals from FE Institutions which is an average of 8,640 per year. Overall there has been an increase of 3.4% in the number of qualifications obtained over the two years; and FE colleges have specialised in different areas of engineering across Northern Ireland and it is important that there is joined up working to ensure that students can get the opportunity to study in specialist areas regardless of which college they enrol in. 153

158 Higher Education: Overall, the total number of enrolments in HE courses relevant to advanced manufacturing and engineering has remained relatively constant over the last three years, despite a 5.4% increase between 2009/10 and 2010/11; Enrolments in Mathematical Sciences have increased by 5.7% (to 375 enrolments in 2011/12) and Engineering and Technology enrolments have declined by 1.1% (to 3,135 enrolments in 2011/12); and Over the last three years an average of 87 students have graduated with a degree in Mathematical Sciences and 793 students have graduated with a degree in Engineering and Technology. The majority of students graduating with degrees in Engineering and Technology are came from Civil Engineering courses in 2011/12 (205, 25.2%). Apprenticeships: The latest figures for 2013 show that there were a total of 996 participants on ApprenticeshipsNI in areas related to advanced manufacturing and engineering; ApprenticeshipsNI figures indicate an overall increase since 2009 in the total number of apprenticeships by 12.2% 129. The main reason for this overall increase has been the rise in engineering apprenticeships (increase of 177 participants; 88.1%); and In 2011/12, only 2% of those students participating on ApprenticeshipsNI were female. Company Supports: There is a range of government supports available to help companies invest in training and development of their employees however awareness of these supports is variable. 129 Increase from 888 in

159 10 ANALYSIS OF SKILLS SUPPLY AND DEMAND 10.1 Introduction This section aims to compare and contrast the supply and demand for skills in the advanced manufacturing and engineering services sector. Section 8 outlines the existing supply of skills in relation to advanced manufacturing and engineering, whilst section 6 projects the extent of demand for these skills in the future up to Summary of Supply There has been a significant level of press on the importance of STEM to the economy. This has particularly had an impact on the number of students choosing STEM related subjects for A-level. The number of A-level entries to Mathematics and Design and Technology has increased by 13.7% over the last three years. However the number of entries in STEM related GCSE subjects has decreased 2.5% over the same period. The qualifications being achieved at Secondary Education shows a difference at A Level and GCSE. Students achieving grades A-C in STEM related A-levels showed a positive trend between 2008/09 to 2010/11 with a 12.3% increase. The number of GCSE entries achieving A-C in STEM related subjects over the 2008/09 to 2010/11 period for Northern Ireland has declined by 1.5%. The Higher Education Institutions referred to in the report include Queen s University Belfast and the University of Ulster. The qualifications that these HE institutions produce in relation to advanced manufacturing and engineering include: Bachelor of Engineering; Master of Engineering; Bachelor of Science; and Master of Science. The number of enrolments in Higher Education courses relevant to advanced manufacturing and engineering has remained relatively consistent over the last three years. As highlighted in section 8, there were 2,640 graduates in courses relevant to advanced manufacturing and engineering from Higher Education Institutions in Northern Ireland over the last three years equating to an average of 880 per year. This represents an estimate for the maximum number of graduates per year that can go into employment in the advanced manufacturing 155

160 and engineering sector. However it is not guaranteed that all of these individuals will enter the industry. Of the 815 engineering and technology graduates from HEI s in Northern Ireland in 2011/12, over a quarter (25.2%) were civil engineers. 11.7% obtained qualifications in mechanical engineering, 6.1% in chemical engineering and only 3.7% in aerospace engineering. The Further Education Institutions in Northern Ireland include Belfast Metropolitan College, South West College, Southern Regional College, Northern Regional College, North West Regional College and South Eastern Regional College. The qualifications available from these FE Colleges include: National Vocational Qualifications (NVQ); Higher National Diploma (HND); Higher National Certificate (HNC); and BTEC. Over the last two years there have been 17,280 achievements in STEM related subjects obtained by individuals from Further Education Institutions which averages as 8,640 per year. The enrolment trends for students studying engineering and manufacturing courses at Further Education Institutions has averaged 11,124 per year. Enrolments in science and mathematics courses have averaged 7,299 per year. The numbers enrolling in STEM related FE courses have declined by 15.5% over the last three years and now stand at 17,053 enrolments in 2011/12. Data on the number of FE students coming from STEM related courses going into advanced manufacturing and engineering occupations is not available. The 2013 ApprenticeshipsNI figures show there are 996 participants in STEM related apprenticeships, which indicates a 12.2% increase in total ApprentceshipsNI participants since

161 10.3 Summary of Demand The demand for resources was analysed using the Warwick Working Futures Model 130 and indicated that overall there would be no expansion demand in the advanced manufacturing and engineering sector between 2010 and However the replacement demand (i.e. replacing those who have left the sector) projected the need for an additional 3,000 people per annum for all organisations that used advanced manufacturing and engineering until This included industries that were directly involved in advanced manufacturing and engineering, of which 1,300 jobs per year were projected while the remainder would be expected to work in a range of roles including teaching, public sector, sales and customer service. Further analysis of the data within Working Futures Model highlighted that over the medium-term, employment will become increasingly concentrated in managerial, professional and associate professional positions. This will increase the demand for more highly qualified individuals over the next 7 years. The Model shows that between 2010 and 2020 there will be a requirement for 3,330 corporate managers and directors which averages as 313 per year and a further 61 other managers and proprietors per year. However there will also be expected growth in some lower level occupations, with 3,610 (361 per year) skilled metal, electrical and electronic trades vacancies projected between 2010 and Despite the number of process, plant and machine operatives being projected to fall by 2,930 (293 per year) over the 2010 to 2020 period; the industry will still require an additional 2,240 (224 per year) new entrants due to replacement demand (i.e. those employees leaving the sector. The survey responses provided company feedback on the demand for additional skills and resources both in the short and longer term. 44.2% of survey respondents felt that their demand for skilled resources was not being met. Specific skill gaps identified included CNC machinists and welders which were also reiterated by the Department for Employment and Learning s report on the Analysis of the Engineering Sector in Northern Ireland (2012) % 130 The Working Futures Model has been developed by the Warwick Institute for Employment Research (IER) and Cambridge Economics (CE) to project the demand for skills as measured by occupations and qualifications. 131 Analysis of the Engineering Sector in Northern Ireland, Department for Employment and Learning (2012) 157

162 of the survey respondents stated that they felt they will require increased resources over the next 2-3 years Factors Driving Demand The Working Futures Model assumes that future demand can be predicted based on a number of assumptions about the sector at a UK level. This Model however does not take into account specific drivers likely to impact at a Northern Ireland level. The growth in air travel globally, and the core competencies which exist in Northern Ireland are creating expansion opportunities for the local aerospace sector. The growing demand for sustainable energy and environmentallyfriendly products and processes will also affect the skill requirements of the advanced manufacturing and engineering workforce. Another driver of demand for advanced manufacturing and engineering services is government policy. An example of this is the potential implementation of a lower corporation tax by 2020 which will stimulate foreign direct investment in high skilled sectors such as advanced manufacturing and engineering. This will promote faster economic growth as well as leading to higher demand for people with higher education qualifications. This is also likely to lead to a decline in the proportion of those in employment with low or no qualifications Comparison of Skills Supply versus Skill Demand An analysis of current trends in advanced manufacturing and engineering 132, along with responses from the survey 133 indicate that there will be a need for more skilled and experienced employees over the next 7 years. Comparing the supply of higher education graduates (approximately 880 per year), those with further education qualifications (approximately 8,640 per year) and those having completed apprenticeships (approximately 1,006 per year 134 ) with the demand for 3,000 advanced manufacturing and engineering employees per year it is evident that supply is exceeding demand. Approximately 28.5% of students obtaining qualifications through higher 132 See Section See Section Based on the average number of ApprenticeshipsNI participants in STEM related subjects since

163 education institutions, further education institutions and apprenticeships in STEM related courses would be required to enter the advanced manufacturing and engineering sector to satisfy demand. Table 10.1 demonstrates that first degree graduates in HE courses related to advanced manufacturing and engineering tend to move into Professional occupations or Associate Professional and technical occupations. The table indicates that of the 75 first degree graduates in Mathematical Sciences and 485 first degree graduates in Engineering and Technology for 2011/12 135, only 20.0% and 37.1% respectively went on to work in occupations related to advanced manufacturing and engineering in Northern Ireland. Table 10:1: Number of First Degree Graduates from Higher Education Institutions entering Employment in STEM related subjects (Northern Ireland 2011/12) Destination Occupation Mathematical Sciences Managers and senior officials 0 5 Professional occupations Associate professional and technical occupations 5 20 Skilled trades occupations 0 5 Process, plant and machine operatives 0 5 Not known 0 0 Total Engineering and Technology Source: HESA: Occupation of full-time first degree leavers entering employment in the UK by location of institution and subject area of degree 2011/12 Table 10.1 also highlights that new entrants to the advanced manufacturing and engineering sector are unlikely to go straight into a managerial or senior official level which is where the most occupational vacancies are projected. The table indicates that only 5 of the 313 (1.6%) managers / senior officials that are required each year will come from individuals who have graduated from Higher Education Institutions in 2011/ See table

164 However it must be noted that Table 9.1 only shows the destination of leavers from HE institutions from first degrees and doesn t include those new entrants to industry with post-graduate degrees or those with FE or apprenticeship qualifications. Overall, the projected supply of people with STEM related qualifications from Further Education (8,640), Higher Education (880) and Apprenticeships (1,006) is 10,526 per year. The demand for people entering the advanced manufacturing and engineering sector is projected at 3,000 per year. We can therefore state that the overall projected demand for advanced manufacturing and engineering occupations in the next 7 years will not exceed the overall supply of people obtaining qualifications relevant to the sector. Over a quarter (28.5%) of those gaining qualifications will be required to enter employment in the sector to meet the demand projected by the Working Futures Model. There does, however, appear to be a skills mismatch within the advanced manufacturing and engineering sector. The overall number of people who are projected to be working in the professional, associate professional, skilled trades and managerial jobs with a large STEM content are in highest demand within the sector. This indicates a clear shift towards occupational structures that rely more heavily on higher skilled employees in advanced manufacturing and engineering organisations. The supply of 10,526 individuals with STEM related qualifications are predominantly made up of those coming from Further Education Institutions (82.1%). The lack of those entering the sector with Higher Education qualifications will cause concern; particularly for the 394 director and managerial (including other managers and proprietors) vacancies projected each year which is where demand is highest. From our survey data it is evident that more than half of these vacancies (56.7%) are taken by individuals with Higher Education qualifications. It would be expected that vacancies for managerial positions will be filled by employees who are already employed in the sector and possess the necessary experience. 160

165 11 CONSULTATIONS AND FOCUS GROUPS 11.1 Introduction This section presents the information gathered from consultations with key stakeholders, and focus groups with young people at post primary schools DEL Careers Service The Department for Employment and Learning has over Careers Advisers across Northern Ireland who visit schools and ensure all 14 year olds have at least one session with a Careers Adviser. The Careers Advisers also provide advice and guidance to the schools Careers Teachers and promote practical support including web sites containing useful links and data on careers. The DEL Careers service provided the opportunity for staff to spend a week in a company work placement over the summer 2013, in order to build awareness of other roles and to build networks with private employers Sector Skills Councils SEMTA SEMTA highlighted the key growth sectors for engineering and advanced manufacturing sectors as being: Aerospace; Renewables/ Energy and Agri Food. They highlighted that there were a number of difficulties for the sector including: Top talent Engineering Graduates from universities are leaving Northern Ireland for positions abroad; The apprenticeship training programme is not producing apprentices with the skills and experience needed by the sector; Companies within the advanced manufacturing and engineering sector can have up to six different apprenticeship training providers, making it difficult for the company to provide the time needed to liaise with the different providers. SEMTA felt that the associated bureaucracy is certainly cumbersome for many micro employers; 136 Approximately 118 (Source: Careers Service Northern Ireland, Department for Employment and Learning) 161

166 SMEs (Engineering) have specific problems in investing in apprenticeship training and there are insufficient numbers of them are involved in training apprentices. However, using economies of scale with accredited training providers could alleviate this making training more cost effective; The age profile of those employed in the sector shows that many are due for retirement in the next decade and insufficient numbers are being recruited now so that they will be trained and sufficiently experienced to fill the gap they will leave. Employer feedback would indicate that many companies understand the age profile of their workforce and appreciate that they need to recruit to ensure the skills are available for growth. Apprenticeships would help address this if the right help and support was available. There are insufficient females working in engineering. SEMTA also stated that they would wish to see the apprenticeship landscape simplified as employers have become confused between Programme led apprenticeships (PLAs) and Employer led apprenticeships. Many parents and careers teachers are also confused and unaware of the apprenticeship opportunities. SEMTA stated that, for example, parents will often enquire about apprenticeships after their child receives their GCSE results only to find out that the apprenticeship programme takes applications at the start of the year. SEMTA also suggested that the apprenticeship programme needs to be run as a rolling programme rather than using start dates to suit the training providers. Colleges traditionally operate within the academic year however, there are independent training providers already offering a rolling start. NRC and SWC are working on Higher Led Apprenticeships at present but it is not clear as yet as to whether these apprenticeship programmes meet the needs of companies according to SEMTA. There is concern from some employers that they are replacing HNC and HND courses which were focused on the practical elements of advanced manufacturing and engineering and meeting the needs of employers. Further work is needed to check that these new programmes will meet the current needs of companies. SEMTA also suggested that companies need to consider what more they can do to upskill those in employment and ensure that they are availing of government programmes such as Invest NI Skills Growth programme and the DEL Customised Training support. Larger companies should also consider how they can help companies in their supply chains; and develop the skills and 162

167 expertise of their engineering employees. A strong collaborative network is also required between Government and training providers and other key stakeholders to simplify support provision to employers. Further work is needed to ensure that careers teachers are providing pupils and their parents with information on the opportunities within apprenticeships as well as degree and other courses. Considerations should be made to use subjective knowledge experts such as STEM teachers as the point of information dissemination for pupils and parents instead of careers teachers. More work is also needed to increase the attractiveness of the sector to young people and parents need to be provided with the necessary information to help them understand the opportunities available. EU Skills Energy and Utility Skills are currently completing research on the Energy and Provision Sector in Northern Ireland (this report is due to be published by the end of 2013). Key findings to date include growth sector projections in renewables such as onshore wind. This is the most mature renewable sector in Northern Ireland and is set to double in size by the end of Employers such as DONG Energy, SIEMENS and SSE have indicated their intent to double their workforce requirements, which could lead to 1,200 NI jobs by In addition, with onshore wind development, 5,485 construction jobs may be available by The projected potential for NI jobs within this sector, up to 2020, equates to 435. When added to the potential job creation in the offshore wind sector (1,200) the total employment opportunities for construction of wind farms and operation and maintenance activity equate to 1,635 jobs by 2020 or 272 jobs per year. Northern Ireland needs to prepare for and meet the challenge and opportunity of this growing Low Carbon industry. Energy and Utility Skills are working closely with SEMTA to develop innovative and required solutions in relation to the highlighted issues of sector attractiveness. A key theme underpinning proposals to address sector attractiveness by Energy and Utility Skills and SEMTA include further development of the Energy and Utility Skills GreenStem initiative. GreenSTEM is an exciting and innovative new online platform of integrated career tools, specifically for Energy and Utility Skills industries. 163

168 11.4 Focus Groups with Pupils at GCSE and A level Introduction Four focus groups were conducted. An All-Girls School 9 girls present (Year 13); a Mixed School 8 pupils present (Year 14); a Mixed School - 10 pupils (Year 14) and a Mixed School 8 pupils (Technology Class) Students awareness of job opportunities Over 50% of the girls said when choosing subjects for A-level they never considered engineering. The reasons given were I just thought it was working with machines so I didn t like the sound of it or I wasn t good enough at maths. Most information on careers came from careers talks. The majority of boys had considered engineering. Those who hadn t or weren t considering engineering gave as a reason - they weren t good enough at maths Skills Needed When the students were asked what kind of skills they thought they would need for engineering or advanced manufacturing, the following areas were mentioned: Numeracy and mathematical skills; Technical and scientific knowledge; and I.T. skills. Reasons for choosing their A Level subjects were as follows: All had chosen A level subjects based on getting good marks in them at GCSE. Those who hadn t considered engineering had said that they weren t good at maths Careers Advice and Sources of Information They all had been at careers talks about engineering and these had included speakers from industry. All found these talks very interesting and recalled the speakers in some detail. If they wanted to talk about careers they said they would talk to the careers teacher. However they are not given appointments to see the careers teacher and it is up to individual pupils to ask if they want to discuss specific issues. They received one to one meetings with DEL Careers Service when aged 14 and found these beneficial. 164

169 To receive a follow-up appointment with a DEL careers adviser the student let their careers teacher know who then organised for the careers advisers from DEL to speak to them Parents Parents had a significant impact on pupils with regard to careers. One of the girls studying technology for A-level said my mother talked me into doing engineering and technology because she used to be a quantity surveyor; she said she enjoyed it so she knew I d like it. However it wasn t just her parents who influenced her, it was subjects I enjoyed too, I enjoyed technology so I chose it for A-level as well. She was the only girl who had a parent/relative or friend involved in the area of engineering or manufacturing. When the other girls were asked what they think their parent s knowledge of careers in engineering or manufacturing would be they replied collectively: Not much ; Another girl said: Mine wouldn t have a clue. Four others agreed with this statement; Another girl stated, I would just talk to my Dad about careers, what could I do in the future, general things like that, nothing specific ; and The boys felt the Careers Service and teachers were a key influence on their choices. Some boys had parents or relatives involved in engineering and these students all had clearer ideas about the opportunities available to them Hours of Work/ Travel/ Type of Work Hours of work were also important. When asked if the hours or shift pattern of the work would be an important consideration, most agreed that long shifts especially if they were during the night would be a strong deterrent. Most felt a career with standard working hours and days, particularly having the weekends off would be the most desirable. All said that they would like a job that involved travel, including foreign travel. All said they would definitely prefer to be working in a job that allows them the freedom to be out and about as opposed to sitting at a desk or doing research. 165

170 Increasing interest The girls felt that the career is more male orientated and to make it appeal more to them they felt more information on the roles women play in engineering and speaking to some of them in person would have made a big difference in their perceptions of the career. Boys also felt that whilst they had already had speakers in talking to them about careers in engineering, they still needed more information Social media When asked if any student used social media to inform them on careers, most of the students (mainly girls) answered that they used Path-finder. They explained that it poses questions to the student about whether you would consider a career in (a wide range of areas). You then get to choose yes or no, and it continues asking questions about your experience, your interests, your education etc. For example: Would you consider a job in ; and Then at the end it gives you a list of jobs you might like, there was loads of choices, it showed you careers you didn t think you would be good at or didn t think you would have the subjects to do. When asked if they had been given access to Path Finder before GCSEs would it have made you think more about the subjects you chose for A-level half thought it would have made a big difference while the other half thought they would still have chosen the same subjects. Most of the boys had used websites to look up careers in engineering but they couldn t give any information on the names of the websites and simply stated the ones our careers teacher gave us. One boy stated My inbox is full of s from our careers teacher about engineering; I can t get reading them all Salaries All felt salaries were very important to them. When asked what they thought the salary of someone starting off in engineering or advanced manufacturing initial thoughts ranged from 13,000 to 30,

171 11.5 Careers Teachers (x4) Knowledge on careers in the area Two teachers stated that their knowledge on engineering or manufacturing was limited, but the other 2 Careers Teachers felt they were au fait with the main opportunities. All noted that they would use web sites to access detailed information, but that it could be difficult to stay up to date with all careers specialisms Demand for engineering and advanced manufacturing Careers Teachers felt there had been a recent growth in the interest from pupils in engineering careers. All said that the girls aren t as interested in engineering and manufacturing. The Colleges provide applied science classes and a lot of the pure engineering courses are looking for physics or chemistry rather than applied science. In some schools, this means that students need to go to other schools as only applied sciences is taught Promoting engineering and advanced manufacturing Careers teachers feel that students mathematical skills may be a real barrier to them considering engineering as it is felt that essentially you need to be good at maths. For many girls this can be a particular problem as they have a tendency to feel they are not as good as the boys at maths Careers talks and access to information In Year 13 and 14 students receive lessons once a week, where the aim is to get students to lead the talk with regards to what careers are discussed. Going through every single career option would be very time consuming, especially as the careers talks only take play once a week. Colleges promote the use of VLE (Virtual Learning Environment). VLE have links to careers and areas for students to submit work etc. Schools use their links and connections with past students and the University of Ulster/ QUB to ask business people in to talk to students. It depends on the head of the engineering/ technology department on the number or types of talks the students get. The teacher s first priority is to get the best grades possible from the students. 167

172 Students get an appointment with the DEL Careers Service in year 12 and in year 8, 9 and 10 they get careers through their Learning for Life and Work Programme. In years 11 and 12 students are studying for their GCSE s which can make it difficult to get students involved in careers discussions because there is so much course content to cover What puts students off engineering and advanced manufacturing related subjects Many pupils choose their courses based on whether they like the teachers and whether they feel they will get good results. Some pupils have asked about engineering apprenticeships, but careers teachers noted that It is very hard to get an apprenticeship in engineering. One careers teacher said I have a girl who would like to leave, she s in year 13, she s doing engineering and applied science and she loves engineering but even the Careers Service (DEL) don t know what to do to get her an engineering apprenticeship. Another careers teacher noted that some pupils don t consider apprenticeships until after they get their GCSE or A level results and then start looking at apprenticeship options - but this is too late in the year and they give up What might encourage more pupils to consider engineering Careers teachers in schools suggested that students should be introduced to careers in engineering before the age of 14, in order to get them more interested in the relevant subjects. Pupils also need information on the subjects to study and the relevant education paths and how they link to engineering degrees and/ or apprenticeships. Pupils benefit from the one to one support and guidance from people who understand these pathways. Careers teachers highlighted that whilst there has been a growing interest in engineering from pupils, parents/ guardians are more cautious and tend to see it as a less attractive option - often seeing it as a dirty job/ unsocial shifts/ male orientated. Careers teachers felt there was a need to promote the opportunities to parents/ guardians and they also need to understand the education pathways and career outcomes. 168

173 11.6 STEMNET The Science, Technology, Engineering and Mathematics Network (STEMNET) is a UK-wide organisation set up to inspire young people to take an interest in science, technology engineering and mathematics. The Network aims to develop creativity, problem-solving and technical skills in young people through the study of the STEM subjects. STEMNET, which is funded by BIS and the Department for Education, runs 3 programmes in the UK: STEM ambassadors - 25,000 volunteers who provide a free resource for teachers helping them deliver the STEM curriculum in fresh and innovative ways; STEM clubs network- clubs that allow children to explore, investigate and discover STEM subjects outside of the school timetable and curriculum; and Schools STEM advisory network - 45 organisations across the country that offer impartial advice to schools on how they can help get students into further STEM education, training and employment. The National Science and Engineering Competition recognises and rewards young people's achievements in all areas of STEM in an attempt to maintain young people's interests in the subject areas and encourage others to take part. The competition is open to all 11 to 18 year olds living in the UK and in full-time education and is co-ordinated by the British Science Association in partnership with the Big Bang Fair and Young Engineers. An evaluation conducted between April and July 2010 by NFER 137 reported on the following impacts from STEMNET: The highest rated impacts that teachers reported were: increased engagement and interest in STEM subjects (reported by 93 per cent of teachers); increased knowledge and understanding of STEM subjects/concepts/ topics (reported by 93 per cent of teachers); and Increased skills in practical work (reported by 89 per cent of teachers). 137 National Foundation for Educational Research 169

174 The highest rated impacts reported by pupils were: increased awareness of careers that involve STEM; increased enjoyment of, and interest in, STEM subjects; increased knowledge of what they knew about the STEM subjects; and The survey data suggests that pupils who have been attending a STEM Club 138 for more than a year are more positive than those who have been attending for less than a year. The two key impacts for teachers of involvement with their school s STEM Club were the same as those for STEM Ambassadors: increased ability to relate STEM lessons to real world applications of the subjects (reported by 76 per cent of teachers); personal development (for example changes in confidence, motivation, enthusiasm, attitudes, aspirations) in relation to teaching STEM subjects (reported by 75% of teachers); Ambassadors rated their contribution as very useful or useful ; Pupils were very positive about their STEM Club with a very high proportion, 94 per cent, rating their club as very good or good. Indeed, two-thirds (65 per cent) rated it as very good ; and 81 per cent of pupils said that they would recommend their STEM Club to other young people. Specifically for Northern Ireland, W5 Science and Discovery Centre was granted the government s STEM Ambassadors Programme Contract for Northern Ireland in July The Programme manages a database of over 900 professionals with STEM skills who have volunteered to promote STEM in local schools and to highlight the wide range of STEM careers available in Northern Ireland. W5 helps link STEM ambassadors with schools so that they can act as role models to help inspire and engage young people about the value of STEM in their daily lives, career paths and high earning potential. W5 works with employers to help them get to know and engage with schools in the local community as part of their community and education outreach activities. 138 The National STEM Clubs Programme aims to help secondary schools throughout the UK to establish and maintain exciting science, technology, engineering or maths (STEM) clubs. STEM clubs are away to engage school students with STEM subjects and can be fun and fulfilling for both student and club leaders. A website exists as to how to set up a club. It also includes supports and activities. External guest from a STEM-related field are called STEM Ambassadors and can be sourced and accessed through the STEMNET website. 170

175 W5 hosts over 200 interactive exhibits which, although primarily focusing on STEM, cover many additional curriculum areas such as careers, art & design, geography, ICT and English. The formal education programme is targeted to all schools, both primary and secondary, in Northern Ireland. The education programmes and workshops are specifically developed to link with the revised curriculum and are cross curricular in approach. They help pupils visualise difficult concepts and theories by using a range of teaching methods. The work of W5 through the STEMNET contract is focused on all STEM subjects, rather than specifically engineering/ advanced manufacturing Companies Over half of the survey respondents noted that they work with local schools to promote the sector. The extent of the involvement of companies with schools and colleges varies significantly, from those that are involved at a one off careers event to much more extensive programmes with dedicated resources. Bombardier for example provide the opportunity for teams from secondary schools to visit the factory and get tours, they conduct talks at schools and colleges and they work with schools to get together groups on the Rocket Challenge, which involves young people working as a team to build a rocket and compete with other schools. The Bombardier Flight Experience provides further opportunities for young people to see the inside of a cockpit and learn about the build process Universities Queen s University Belfast Queens University of Belfast, have invested in their Faculty of Engineering and Physical Sciences in order to increase the points needed at A level to get into the courses; to increase the retention rate of students staying on the programmes and to increase the number of applications to the courses. For example, the intake to Mechanical and Aerospace Engineering in 2011/12 is almost 2 grades higher than in 08-09, in EEE it is almost 3 grades higher than The tariff point score in Chemistry Engineering is the highest of the engineering disciplines and was over 400 in Chemical Engineering took in 46 students in 2011 and 73 this year, for the first time it had a bigger intake than Chemistry. 171

176 Queens University of Belfast note that they are very aware of the need to ensure graduates are coming out with the skills and experience that will make them more employable. They have recently introduced the target (to be achieved over the next 5 years) that they will ensure that every student is offered an international experience and that they will be offered formal job experience. Formal refers to the fact that Queens will review the work experience planned and confirm that it is sufficient to allow the student the opportunity to develop work place skills. They have this year set up a Top Talent Programme for students in engineering. The top students identified as having leadership potential will be provided with the opportunity of completing a Certificate in Leadership alongside their Engineering Degree. Queen's University of Belfast is also introducing a range of Scholarships for students applying to enter in Ten full fee Scholarships will be available to students from Northern Ireland, designed to reward academic achievement and recognise wider social and community contributions including sports, music and the arts, business and enterprise and the community. They apply for the full duration of the undergraduate degree including any placement year. Science, Technology, Engineering and Mathematics (STEM) Performance Awards - 1,000 When Queen's is a first choice in a UCAS application, the individual attains a minimum of three 'A' grades at A-level (or equivalent in alternative qualifications) and enrolls in a Science, Technology, Engineering or Mathematics subject, they will be considered for one of 50 1,000 scholarships in their first year of study. The top 50 students will be selected on academic performance as determined by Queen's Admissions Service. Table 11:1: Available Scholarships at Queen s University Belfast Scholarships 139 Tuition Fees Scholarship Value (per year) Net Fee Achieve A, A, B or higher at A-level 9,000 2,500 6, Note: Students must make Queen's University their firm choice through UCAS application, and enrol in September This excludes students enrolling in Medicine, Dentistry and Pharmacy programmes. 172

177 Scholarships 139 Tuition Fees Scholarship Value (per year) Net Fee Achieve A, B, B at A-level 9,000 1,750 7,250 Achieve Offer Grade 9,000 1,250 7,750 Each School within the university has an Advisory Board and companies / employers are represented on most of these boards. For example Almac is on the Advisory Board for the School of Chemistry and they had not been recruiting graduates from Queens University. The School asked for feedback and found that the university course needed to include a specific module which was actioned and now Queens s chemistry graduates are being hired when appropriate. The university also has a Head Teachers Forum and an Employers Forum, both of which meet every 6 months to get feedback and to follow up on previous feedback already actioned. Schools within the university also go out to schools and through presentations increase awareness of careers in engineering and the benefits of attending Queens University. The extent to which this happens depends on the enthusiasm of schools career teachers and resources within the university. Queens has been awarded 1.5M from RCUK to promote research to pupils at schools. The target audience for this work is year olds (in advance of GCSEs). Queens is working with schools through the DE Area Learning Communities in Magherafelt and Newtownabbey. Two further areas will be added in Spring The funding is in place through to February Queens University have a STEM academy website that they use to promote all their activities on STEM to pupils, school teachers/careers teachers and parents. Queens now provide an Engineering Parents evening- once a year. When they started this 3 years ago they had 400 parents attend. The demand has grown and now 1,200 parents attend the session. This evening session is designed to promote engineering careers at Queens. Caterpillar provides talks on the opportunities within its company. 173

178 11.9 Summary This section highlights that a great deal of work is ongoing with regard to building awareness in school children of STEM related careers. There are, however, a number of areas for further development. Whilst interest in STEM careers has grown, further work is needed at the stage prior to young people choosing their GCSEs as Northern Ireland has not seen the increase in young people studying STEM GCSEs that other parts of the UK has experienced. There is a need to ensure that the promotion of engineering starts with relevant activities from the first year of second level school, rather than waiting until students are aged 14 or over. This way there can be continuity of support from primary schools through to second level education. Secondly, further work is needed for promote the sector to girls. This should continue to include female role models, but it should also include detail on female career options / pathways. Finally, students and their parents should be provided with information on the route to apprenticeships and given information and contacts as to how to apply. 174

179 12 DEVELOPING THE SUPPLY SIDE 12.1 Introduction The previous section has shown that whilst Northern Ireland is producing enough resource, there is a need to ensure that more people are attracted to the sector and that those that are attracted have the right skills. This section sets out a number of the key programmes and supports available elsewhere to increase the number of STEM students who are interested in pursuing careers in advanced manufacturing/engineering. It also sets out examples of the training and development support available to help SMEs in particular to recruit the right resource and up skill the trainees once they are recruited Increasing the Career Attractiveness of the Sector Northern Ireland has a range of supports in place to promote the sector. This section explores two programmes in GB and Germany that could add to the work in Northern Ireland Tomorrow s Engineers Programme UK Tomorrow s Engineers, which is led by Engineering UK 140 and the Royal Academy of Engineering is a programme that promotes engineering as a career choice to students in schools and colleges ( Note: STEMNET has already been covered in the report and focuses on promoting STEM careers to young people but it is not specific to engineering). The programme is made up of a number of initiatives, including industry visits, workshops, Science, Technology, Engineering and Maths (STEM) Ambassador partnerships and careers resources, to help schools incorporate engineering into the current curriculum. It also includes specific activities aimed at primary school children. These are delivered by a not for profit organisation and include: Courses to Primary teachers who may be looking for fresh and exciting ways to support the delivery of Design Technology projects; 140 Engineering UK work with a huge range of partners to deliver innovative engineering careers programmes that challenge outdated perceptions of the industry and showcase the real, dynamic jobs available with the right qualifications 175

180 Challenges throughout the year, in which students can compete against one another with what they have designed and made in the classroom; and Interactive resources linking students with a real life project, aimed at Key Stage 2 (KS2) to Key Stage 3 (KS3). The range of resources and competition may also be extended to involve the wider community of adults and mixed-aged student teams. The effectiveness of Tomorrow s Engineers activities has been demonstrated by a comparison 141 of students descriptions of engineering before and after their participation. A positive change was evident in an evaluation of the programme by Engineering UK; with the use of words such as boring and hard work before the programme and fun and interesting after the programme. Following the activities, the majority of students knew more about the different branches and types of engineering careers available to them and several reported that the activities had made them more aware of the range of available career opportunities in engineering. Students were also more aware of the knowledge, skills and qualities required for a career in engineering and had developed engineering and soft skills The majority of students demonstrated an increased appreciation of the many skills and qualities required by an engineer citing a variety of personal qualities (such as being patient and prepared to take risks) and knowledge and skills (such as people management and technical engineering skills). Many students had also developed a variety of engineering and soft skills following their participation in Tomorrow s Engineers activities including mechanical and electrical engineering skills, team-working, communication and problem solving skills. Teachers also noted the increased confidence that their students acquired through the activities delivered as part of the Tomorrow s Engineers programme. An evaluation of the programme by Engineering UK 142 showed that teachers and pupils rated the Tomorrow s Engineers activities highly, but there was still a varied grasp of knowledge on the range of engineering jobs available, and that more work was required in this area. This programme is very similar to STEMNET and uses ambassadors as a key resource in advising teachers. The one key difference is that it is very focused 141 June field work with students completed. 142 Fieldwork for the evaluation ran from February July Analysis was performed via questionnaires completed by primary and secondary school students, and teachers. 176

181 on engineering and measures it success with regard to the change in attitudes towards careers in engineering. This is an important factor in increasing the attractiveness of the sector vis a vis other professions to young people and their parents, and it is an area that needs more focus in Northern Ireland Mint Project (2008) Germany The MINT project aims to encourage females to get involved in Mathematics, Informatics, Natural Sciences and Technology (MINT) fields. It is led by the German Federal Ministry for Education and Research as part of the Promotion via Education, which was launched in MINT has over 140 partners in Germany supporting this objective. The MINT project is targeted at: School girls; Female students; Executive female managers; and Women working. Specific projects run under MINT include: MINT Role Models: Presenting positive examples of female careers. Attractive MINT career paths are presented at regional and national events and publicised via school newspapers, TV spots and Internet forums; CyberMentor: First-hand knowledge: female mentors working in MINT careers are available to schoolgirls via to answer questions on MINT topics. Schoolgirls can also obtain relevant information from a variety of online and offline sources; Fraunhofer Talent School and Junior Engineer Academy: ten Junior Engineer Academies have been set up and 20 Talent Schools run throughout Germany; tastemint: tastemint gives female high-school graduates a chance to assess their potential for MINT study areas; mäta Federal girls technology talent forums in MINT: This project centres on round tables at which regional activities in MINT subjects are pooled to produce seven national Girls Technology Conferences. The project aims to establish nationwide networks, building on regional centres, between the mst femnet network and other girls and women s networks in MINT fields; Light up your Life: The Light up your life for girls with brains project aims to expand the choice of careers available to girls in the fields of 177

182 natural sciences and technology, using the cross-cutting technology of Photonics as an example; and MINT Students: In partnership with universities and colleges, businesses and research institutions the VDE (Association for Electrical, Electronic & Information Technologies) is running the MINT Students project as a platform for support in the career choice process of female students and graduates. The programme currently contains some 750 projects and provides a nationwide overview of activities, introduction days, grants, mentorships and competitions for schoolgirls, female students and those working in MINT careers. Since 2008, a total of 90,000 girls and young women have taken part in the activities. Schools, associations, universities, colleges, businesses and others can register new projects online. STEMNET in Northern Ireland works with all the schools and in doing so has worked with both males and females. The focus groups with pupils highlighted the growing awareness and interest from females, but they also highlighted that females still have concerns about the work / environment being male focused. Northern Ireland should consider running female focused activities particularly providing access to women role models in the sector who can provide mentoring advice on line to girls considering a career in the sector Upskilling the Current Workforce Career Pathway and Cluster Skill Development: Promising Models from the United States, OECD (2012) This paper, from OECD Local Economic and Employment Development, provides details on states and localities in the United States that are focusing their workforce and education programmes on career pathways and clusters, describing how these approaches can benefit employers and individuals already in the labour market. Pathway models are used extensively to promote careers in many sectors to new recruits, but they can also be used to help existing employees consider their options and provide a clear progression route(s) based on where they wish to end up. Sector Skills Councils such as Cogent, SEMTA and EU Skills have this information already developed. It is promoted to students at schools and colleges through the careers support available. There is less evidence available 178

183 as to how this information is promoted to existing employees. Large companies have Training/ Development Managers in place who can use their training needs analysis processes in house to set out potential career paths and then identify training needs against those suitable for individuals. SMEs without this resource will find it difficult to devote the time or resource to conducting this same activity. To provide employees working in SMEs in the advanced manufacturing and engineering sector with these resources, additional methods of training will be required from outside the company to identify the needs of individuals Summary The section shows that countries are tackling this same issue of attracting more talent to the advanced manufacturing sector and improving the skills/ awareness of young people who wish to work in the sector. More work is needed in this area focused on engineering and the supports tailored to females need to be enhanced to increase the profile further of women working in the sector. Finally SMEs need external support to offset the lack of internal resource available to provide employees with information on education/ career pathways and to identify training needs. 179

184 13 KEY FINDINGS AND EVIDENCE BASED ACTION PLAN 13.1 Introduction This section sets out the actions needed in order to ensure there are sufficient resources available to meet the needs of the advanced manufacturing and engineering services sector, both at present and in the future. First the sector is defined and the projected demand is compared to supply Definition of the Advanced Manufacturing and Engineering Services Sector Throughout the report, the advanced manufacturing and engineering services sector has been defined by the SIC codes listed below which were finalised with the assistance of SEMTA, Colleges NI and MATRIX 143 : 10.0 Manufacture of food products; 11.0 Manufacture of beverages; 12.0 Manufacture of tobacco products; 13.0 Manufacture of textiles; 16.0 Manufacture of wood and of products of wood and cork, except furniture; 18.0 Printing and reproduction of recorded media; 20.0 Manufacture of chemicals and chemical products; 21.0 Manufacture of basic pharmaceutical products and pharmaceutical preparations; 22.0 Manufacture of rubber and plastic products; 23.0 Manufacture of other non-metallic mineral products; 24.0 Manufacture of basic metals; 25.0 Manufacture of fabricated metal products, except machinery and equipment; 26.0 Manufacture of computer, electronic and optical products; 27.0 Manufacture of electrical equipment; 28.0 Manufacture of machinery and equipment n.e.c.; 143 The use of Standard Industrial Classification (SIC 2007) codes are necessary to adequately assess the footprint of the advanced manufacturing and engineering sector. However, limitations do exist from using SIC codes as key contributing sectors to the Northern Ireland economy such as aerospace are categorised as 30.0 Manufacture of other transport equipment. This has made it difficult to access specific data related to these sectors which leads to their importance being undervalued 180

185 29.0 Manufacture of motor vehicles, trailers and semi-trailers; 30.0 Manufacture of other transport equipment; 35.0 Electricity, gas, steam and air conditioning supply; 36.0 Water collection, treatment and supply; 37.0 Sewerage; 38.0 Waste collection, treatment and disposal activities; materials recovered; and 39.0 Remediation activities and other waste management services Importance to the economy of the Advanced Manufacturing and Engineering Services sector and Areas of Growth Potential Section 5 of the report estimates that the advanced manufacturing and engineering sector currently employs approximately 79,580 people in Northern Ireland. It makes a significant contribution to export levels and research/ development in Northern Ireland, both of which are central to wealth generation. Evidence from DETI s Manufacturing Sales and Export survey 144 highlights the importance of the sector to the Northern Ireland economy. The survey shows that the total sales of manufacturing companies in Northern Ireland in 2011/12 was billion which represents a 6.5% increase from the previous year. Exports from the advanced manufacturing and engineering sector totaled approximately 4.2 billion which represented a 7.7% increase from 2010/2011. Forecasts show that the sector is expected to marginally contract up to 2020 with 78,624 jobs forecast (down from 79,580 in 2013). Although some subsectors will contract over this period, there are also areas within the sector that are expected to grow substantially over the next few years including aerospace, agri-food and sustainable energy. The other sub-sectors expected to contribute to the growth of the advanced manufacturing and engineering sector include manufacture of electrical equipment (SIC code 27.0), water, sewerage and waste management (SIC codes 36.0, 37.0 and 38.0) and manufacture of machinery and equipment n.e.c. (SIC code 28.0). However, there are pressures on the advanced manufacturing and engineering sector to contract as result of, for example, an increasing emphasis on low cost production in overseas sites from global companies. Northern Ireland cannot compete with the labour rates in the Far East and the only way to be 144 Northern Ireland Manufacturing Sales & Exports Survey 2011/12, DETI (2012) 181

186 competitive is by adding value such as producing customised products and adding on services and/or developing new products. Managers within the sector need to be able to plan strategically and be able to take advantage of business opportunities as they develop. It is also critical that those managers faced with ensuring they have a strategy in place which will ensure the long term survival and growth of their companies, have access to information and market intelligence on where the long term opportunities lie for the sector within which they operate. ICT is now playing a greater role in manufacturing due to the need to share information with customers and suppliers in the most efficient and secure way. This change will impact on the skills required as engineers will need to have ICT capabilities. Changes in consumer demand will also impact the demand for skilled employees. For example, the aerospace sector is expected to grow over the next few years due to increased demand for air travel. Northern Ireland s aerospace sector is well placed to take advantage of this global opportunity and will increase the demand for highly skilled employees. The growing demand for sustainable energy and environmentally-friendly products and processes will also affect the skill requirements of the advanced manufacturing and engineering workforce. Another driver of demand is government policy. An example of this is the potential implementation of a lower corporation tax by 2020 which will stimulate foreign direct investment in high skilled sectors such as advanced manufacturing and engineering. This will promote faster economic growth as well as leading to higher demand for people with higher education qualifications. This is also likely to lead to a decline in the proportion of those in employment with low or no qualifications Projected demand for employment The Working Futures data (section 7.5) demonstrates the expected growth in jobs in this sector, with the net additional jobs expected to be approximately 3,000 per annum over the next 7 years for all industries that use advanced manufacturing and engineering skill sets and 1,300 per annum for industries directly involved in advanced manufacturing and engineering. The Net Requirement for workers is calculated by working out the total number of additional workers needed due to the expansion or contraction of the sector and added to the number needed to replace those leaving the sector. The Working Futures Model shows that over the 2010 to 2020 period, the demand for new advanced manufacturing and engineering jobs is projected to 182

187 decline by 2,410. However, when replacement demands are factored in, there will be a need for an additional 16,070 people. Approximately a quarter of these roles (24.5%) are expected to be corporate managers and directors or other managers and proprietors which indicates an increase in the need for more skilled and experienced advanced manufacturing and engineering workers. The net requirement will be particularly high for the following occupations: Corporate managers and directors (3,330); Science, research, engineering and technology professionals (2,400); Science, engineering and technology associate professionals (1,130); Skilled metal, electrical and electronic trades (3,610); Process, plant and machine operatives (2,240); and Transport and mobile machine drivers and operatives (2,480). The sector therefore, whilst playing an important role in the local economy, faces a number of challenges in relation to the attraction, development and retention of skilled resources Survey Findings on Demand The survey highlighted that almost half (47.8%) of respondents said they had experienced difficulties in filling skilled trades positions over the last two years. 40.4% of respondents also experienced difficulties in filling vacancies for professionals while almost a third (30.6%) had problems filling associate professional vacancies. However, nearly three-quarters (74.6%) of respondents had not experienced any difficulties in filling operative vacancies, 59.2% had no problems filling associate professional and technical vacancies and only 22.8% of respondents had difficulties in filling managerial vacancies. The common themes arising from companies who provided details on the difficulties they had experienced were 145 : Difficulty finding potential employees with the sufficient skills (63.4%, n = 23): - Systems design engineers and stress engineers - CNC programmers/ engineers, 145 Note: Only 36 respondents provided details on difficulties they had in filling advanced manufacturing and engineering vacancies. 183

188 - Production managers/ engineers (Development Engineers (spec manufacturing equipment), Plant Engineer (Facilities development), Manufacturing Systems (Equipment optimising software management); - Electrical technicians; - Fitters - Welders - Skilled fabricators (who can adapt to the variety of fabrications and time restraints that we are involved in); - Project Managers - R&D Engineer type posts (Hardware Design, Verification, Systems and Mechanical); and - Difficulty filling gaps for all R&D Engineer type posts. A number of companies felt that the quality of graduate engineers did not meet their needs and concerns were voiced about the age profile of the workforce in many companies: What is learnt in university is very different to what is used in work; Young engineers (26-30 years old) lack experience in systems engineering. Graduate level employees (less than 24 years old) are very far away from the level required to be presented to clients for work; and The average age of the engineering team is now above 60 and we are unable to find suitable people. We are currently trying the apprentice route, with mixed results. Respondents were asked what actions need to be taken by the government and others to ensure that the skilled resources in Northern Ireland meet the needs of the advanced manufacturing and engineering organisations. Of the 53 responses, the majority of responses focused on the following: Increase the quality of engineering training at HE and apprenticeship training sites (more practical training needed); Provide more financial support to make recruitment of apprentices more viable i.e. fund the salaries for apprentices and not just training; Provide more incentives to businesses to run properly funded graduate schemes. Promote career opportunities in advanced manufacturing and engineering to children and young people at schools. Ensure the careers teachers understand what opportunities exist in manufacturing. Promote the STEM subjects among females and promote work experience. 184

189 13.6 Analysis of Supply There are mixed results on the supply side. The number of A-level entries to Mathematics and Design and Technology has increased by 13.7% over the last three years. However the number of entries in STEM related GCSE subjects has decreased 2.5% over the same period. The qualifications being achieved at Secondary Education shows a difference at A Level and GCSE. Students achieving grades A-C in STEM related A-levels showed a positive trend between 2008/09 to 2010/11 with a 12.3% increase. The number of GCSE entries achieving A-C in STEM related subjects over the 2008/09 to 2010/11 period for Northern Ireland has indicated a 1.5% decline. The number of enrolments in Higher Education courses relevant to advanced manufacturing and engineering has remained relatively consistent over the last three years. As highlighted in section 8, there were 2,640 graduates 146 in courses relevant to advanced manufacturing and engineering from Higher Education Institutions in Northern Ireland over the last three years equating to an average of 880 per year. Of the 815 engineering and technology graduates from HEI s in Northern Ireland in 2011/12, over a quarter (25.2%) were civil engineers. 11.7% obtained qualifications in mechanical engineering, 6.1% in chemical engineering and only 3.7% in aerospace engineering. The numbers enrolling in STEM related FE courses have declined by 15.5% over the last three years and now stand at 17,053 enrolments in 2011/12. Data on the number of FE students coming from STEM related courses going into advanced manufacturing and engineering occupations is not available. The 2013 ApprenticeshipsNI figures show there are 996 participants in STEM related apprenticeships, which indicates a 12.2% increase in total participants since Summary of Demand and Supply An analysis of current trends in advanced manufacturing and engineering 147, along with responses from the survey 148 indicate that there will be a need for 146 Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2009/ / See Section See Section 6 185

190 more skilled and experienced employees over the next 7 years. There are sufficient numbers of young people coming through the education/ training systems but there is a mismatch between the skills and experienced required by employers and what is being produced. Overall, the projected supply of people with STEM related qualifications from Further Education (8,640) 149, Higher Education (880) 150 and Apprenticeships (1,006) 151 is 10,526 per year. The demand for people entering the advanced manufacturing and engineering sector is projected at 3,000 per year. We can therefore state that the overall projected demand for advanced manufacturing and engineering occupations in the next 7 years is not likely to exceed the overall supply of people obtaining qualifications relevant to the sector. Over a quarter (28.5%) of those gaining STEM related qualifications will be required to enter employment in the sector to meet the demand projected by the Working Futures Model. The skills mismatch relates to insufficient numbers of people coming through with professional, associate professional, skilled trades and managerial skills Salary Issues The analysis of salary data for engineering jobs has identified a variance in salary levels between Northern Ireland, the UK and the Republic of Ireland for a number of roles. The basic median pay of those in clerical and technical roles is 19, for Northern Ireland, which is 13% less than the average UK basic median pay. Manual workers in Northern Ireland are also earning salaries which are 7% less than their counterparts in the rest of the UK. The salary levels for the operative, skilled trade, associate professional and technical roles in the advanced manufacturing and engineering sector are all 149 Department for Employment and Learning Statistical Bulletin: Professional and Technical Enrolments in the Northern Ireland Further Education Sector for 2012/ Department for Employment and Learning Statistical Bulletin: Enrolments at UK Higher Education Institutions: Northern Ireland Analysis 2009/ / Average number of ApprenticeshipsNI participants per year since Workforce Pay Benchmark #08 Manual, Clerical & Technical Employees, EEF: Manufacturers Organisation 186

191 lower than the general salary levels for similar occupations in Northern Ireland, with the exception of maintenance fitters. Professional occupations within the advanced manufacturing and engineering sector including process, project, quality and maintenance engineers also receive lower salaries than the general salary levels for professional occupations in Northern Ireland 153. This increases the risk of Northern Ireland s advanced manufacturing and engineering sector losing potential employees who are at an operative, skilled trade, associate professional or professional level to other sectors that pay higher salaries. Median pay was also lower in Northern Ireland than the Republic of Ireland for a number of advanced manufacturing and engineering occupations. For some occupations, such as Process Engineers, the salary levels in the Republic of Ireland were 66% higher than those in Northern Ireland. Other occupations where Northern Ireland had significantly lower salaries included Project Engineers, Quality Engineers, Maintenance Engineers and Maintenance Managers. This will make it difficult for companies based in or close to the border areas to attract and retain engineers. The salaries of graduates vary significantly depending on the area they are involved in. In the electronics, electrical engineering and computer sciences sector; software engineer graduates can earn between 18,000 and 25,000 per year. Supplier quality assurance engineer graduates salaries earn between 22,000 and 27,000. For civil engineer graduates there is a variance of 9,000 between the highest ( 24,000) and lowest earners ( 15,000). A similar margin ( 15,000-22,000) is also evident for graduate civil design engineers in Northern Ireland. Design engineer graduates in the aerospace sector can earn between 15,000 and 24,000 per year. A starting salary of 15,000 would appear to be relatively low for an occupation that is deemed high in demand and could possibly be a reason for the difficulties experienced in filling engineering positions as it is unlikely to attract potential entrants to the sector. Companies with graduate engineering vacancies and salaries of 15,000 per year based in the border areas will find it particularly difficult given that salaries in the South of Ireland are much higher generally than in Northern Ireland. 153 Results from the Northern Ireland Annual Survey of Hours and Earnings (Department of Finance and Personnel, 2012) 187

192 13.9 Consultation Findings Young People/ Attracting New Entrants to the Sector The meetings with DEL Careers Service, the Sector Skills Councils and STEMNET 154 highlight that a lot of work has been delivered to promote the sector to young people in schools. DEL has over Careers Advisers across Northern Ireland who visit schools and ensure all 14 year olds have at least one session with a Careers Adviser. The Careers Advisers also provide advice and guidance to the schools Careers Teachers and promote practical support including web sites containing useful links and data on careers. The DEL Careers Service provided the opportunity for staff to spend a week in a company work placement over the summer 2013, in order to build awareness of other roles and to build networks with private employers. SEMTA highlighted that work is needed to ensure that careers teachers are providing pupils and their parents with information on the opportunities within apprenticeships as well as degree and other courses. Both SEMTA and Energy and Utility (EU) Skills felt that there is insufficient information available to set out the different career paths for young people. EU Skills are working closely with SEMTA on GreenSTEM which will be a new online platform of integrated career tools, specifically for Energy and Utility Skills industries. Both Councils feel that many parents/ careers teachers are confused or unaware of the opportunities that exist for apprenticeships and are unaware where to access this information. SEMTA questioned whether careers teachers are the best point of information dissemination for pupils and parents and suggested the use of subject knowledge experts such as the STEM teachers. They also highlighted that more work is also needed to increase the attractiveness of the sector to young people and parents need to be provided with information to help them understand the opportunities. The focus groups with young people at schools confirmed the feedback from the Sector Skills Councils and highlighted that: 154 The Science, Technology, Engineering, Mathematics Network (STEMNET) 155 Approximately 118 (Source: Careers Service Northern Ireland, Department for Employment and Learning) 188

193 Engineering is perceived by many parents to be an unattractive profession for young people ( dirty work conditions/unsociable hours) Girls in particular equate engineering to needing to be very good at maths and if they feel at all weak at maths they do not consider it. Careers teachers and young people at focus groups were clearly aware that opportunities exist in the sector, however a number raised questions about what subjects they should study to get the best jobs in engineeringi.e. should they take technology type GCSEs or keep to the traditional route of 4 sciences) indicating that there is some confusion about the best pathway to take. Also questions were asked about apprenticeships and there was a lack of awareness/knowledge about the timings and exact opportunities in this area. More recently universities have been working to promote the opportunities in engineering/advanced manufacturing to young people. For example, Queen s University hold an evening in November every year specifically aimed at promoting opportunities in engineering to parents. When the event started out 5 years ago, approx. 400 parents and young people attended and now over 1,200 parents and young people attend. This demonstrates the growing demand from parents for information. This also came out through the focus groups and interviews with young people and Careers teachers at schools- as they highlighted that many parents were not aware of the job/career opportunities that existed Apprenticeship Training and Upskilling Existing Employees. SEMTA highlighted the need for: Improved apprenticeship training which would deliver apprentices with the skills and experience needed by companies. Many companies complain to them that the training doesn t equip apprentices with the right skills and practical experience. Small firms need help to invest in apprenticeship training as they cannot afford the time and money needed to provide the infrastructure needed to implement the training. The apprenticeship training landscape needs to be simplified as at present there are programme led apprenticeships and Employer led apprenticeships. The apprenticeship brand needs to be simplified as there have in the past been programme led apprenticeships (PLA) which have confused employers. 189

194 Companies need to consider what more they can do to upskill those in employment and ensure that they are availing of government programmes such as Invest NI Skills Growth programme and the DEL Customised Training support to do so. Larger companies should consider how they can help companies in their supply chains; develop the skills and expertise of their engineering employees. A strong collaborative network between Government and training providers, other key stakeholders to simplify support provision to employers Summary In summary the main areas for development highlighted from the consultations were: Information on education/career pathways for advanced manufacturing jobs is needed so that parents/young people can be aware of the subjects to study and the different paths to be taken to increase chances of success in getting employment in the different specialisms across engineering. Salary information and progression data should also be available. This information should be provided well before decisions are made on GCSEs. Further work is needed for promote the sector to girls. This should continue to include female role models, but it should also include detail on female career options/pathways. Students and their parents should be provided with information on the route to apprenticeships and given information and contacts as to how to apply. SMEs need help to invest in apprenticeship training and encouragement to get involved in joint initiatives with other companies to share the costs involved. Supply chains should be used by the larger companies to encourage the smaller companies to invest in training and get involved in shared training. Collaboration is needed between Government and training providers, other key stakeholders to simplify training support provision to employers Action Plan Actions are needed in a range of areas, including increasing attractiveness of the sector to young people, increasing the number and quality of apprentices and investing in upskilling existing staff. 190

195 ACTIONS NEEDED TO INCREASE ATTRACTIVENESS OF THE SECTOR TO POTENTIAL EMPLOYEES There is evidence that the work of the DEL Careers Advisers, School Careers Teachers, SEMTA, Sentinus, W5 and those businesses involved with schools is having an impact in raising the awareness of young people about opportunities in the sector. The research has highlighted that there is a growing interest in STEM related careers including engineering. This interest is evident through the feedback received from pupils in the focus groups. Many parents and guardians however are not aware of the opportunities and see a career in engineering involving working in dirty and non-family friendly environments. This is a view shared by some girls at schools and needs to be addressed through the promotion of more female role models to help address this issue. Whilst interest in STEM careers has grown, further work is needed at the stage prior to young people choosing their GCSEs as Northern Ireland has not seen the increase in young people studying STEM GCSEs that other parts of the UK has experienced. There is also evidence from pupils and school careers teachers that short work placement type activities are a very effective way to allow young people the opportunity to check out the work and test whether it is what they are interested in doing. Many careers teachers at schools in Northern Ireland are now much more aware of engineering job opportunities and have built relationships with local employers. It is however not practical to assume that schools careers teachers will be able to stay up to date with all the areas of engineering and it is essential that they continue to build their relationships with employers and that they use managers/staff in these businesses, who have already signed up with W5 to be STEM Ambassadors to support/act as e-mentors for young people. These people are already in place through the STEMNET contract. They should be working with teachers as well as pupils to ensure the whole system is connected. Just over half of businesses from our survey are involved in promoting their business through schools and colleges. Feedback from schools is that this work is welcomed and essential to building awareness of the opportunities, but that companies should get involved from one off annual events through to 191

196 ongoing regular contact with both inviting students into their companies for site visits and completing talks at the schools. The ongoing personal contact between companies and students is seen as essential to stimulating interest in the young people and this type of activity needs to be encouraged and helped as much as possible. Actions: The sector should work with primary schools to increase awareness and interest in engineering as part of the STEM activities. Primary Schools could be provided with kits/activities that teachers can use to excite children about engineering design and production. Sector Skills Councils, FE and HE with employers need to tackle the image of engineering held by many parents/guardians by providing information to support existing career evenings with parents. These should inform them on the range of careers available within the sector and the opportunities that exist including information on the whole life time earnings that can be generated through an engineering career in comparison to other professions. Many of the parents of students with top GCSEs will be keen to see their children follow recognised pathways to professions such as medicine and they need information that shows that a career in engineering can be just as rewarding as other professions. These sessions should also include information on the education pathways needing to be followed to pursue the different type of careers in engineering and they should highlight the importance of gaining practical experience as well as academic qualifications. Parents have questions on apprenticeships that Careers teachers are not up to date on, and these should be incorporated into the sessions. There is a need to ensure that the promotion of engineering starts with relevant activities from the first year of second level school, rather than waiting until students are aged 14 or over. This way there can be continuity of support from primary schools through to second level education. A good example which stimulated interest in engineering in schools is the UK Aerospace Youth Rocketry Challenge. Consideration should 192

197 be given to expanding the programme in NI to ensure more schools and students are exposed to the programme and the principles of engineering and manufacturing. Consideration should be given by the business sector to regularly invite and showcase their industry/business to primary, secondary and grammar school pupils. This will provide business with an opportunity to promote their business/sector and to stimulate an early interest in engineering amongst students. See Inside Manufacturing (SIM) was highlighted as a useful example to consider. SIM is a partnership model between government (BIS) and industry has been created to transform students perception of manufacturing in strategic sectors. SIM is an effective initiative where manufacturers are asked to open their doors to interact with students, teachers and career advisors to visit their manufacturing facilities and change the sceptical perceptions of manufacturing and get behind the scenes of success. Thought should be given to developing a promotional tool (film, advert, etc.) which could be utilised by key stakeholders to act as an early mechanism to attract and encourage interest in the manufacturing and engineering sector. Sentinus should consider expanding their short workplace engineering activities e.g. Insight into Engineering programme 156 but ideally a version of it should be available to pupils in the summer before they choose their GCSE subjects, in order to help young people decide on their potential career options and therefore help with their GCSE choices. Stakeholders should work together to promote careers in their business/sector with schools and colleges (particularly at KS3 and KS4). The industry fact sheets already provide the facts on the whole life earnings. This needs to be used more in sessions with parents and young people to compare with other professions. The information that is important to young people includes: Nature of Work; Salary 156 This is a 5 day programme run for ALEVEL students to give them an insight into careers in engineering. 193

198 levels in comparison to other jobs; Hours of work; Travel; Conditions in which they are expected to work; the subjects to study/education pathways and different routes that exist to getting into engineering and finally what they can do now if they are interested. School Careers Teachers should have access through W5 (Provider of the STEMNET contract) to the STEM ambassadors from advanced manufacturing/ engineering businesses that are available in their local area. These are people that they can contact and ask specific questions regarding their sector, so that the information they provide to pupils is up to date ACTIONS NEEDED TO BUILD SKILLS OF POTENTIAL ENTRANTS TO THE SECTOR TO MEET NEEDS OF BUSINESSES The projected supply of people with STEM related qualifications from Further Education, Higher Education and Apprenticeships in Northern Ireland is 10,088 per year 157. The demand for people entering the advanced manufacturing and engineering sector is projected at 3,000 per year 158. The projected demand for advanced manufacturing and engineering occupations can therefore be met by the projected supply of people obtaining qualifications relevant to the sector, assuming that at least a quarter of those gaining qualifications will enter employment in the sector. The focus however should be on ensuring the sector can attract the top talent from FE and HE colleges and that they have the skills needed for the advanced manufacturing and engineering sector. Whilst there is a lot of information available on the different education pathways they are not all connected up and there is no one overall source of this information. The literature review and the RSM survey have shown that employers have concerns about the quality of graduates/ apprentices coming out of Higher Education/Further Education Institutions and training providers and are now favouring those who have proven practical experience. Employers spoke through the survey of the need to ensure that potential applicants have already developed the ability to communicate with others, 157 See Section See Section 7.4, Table

199 problem solve and work as part of a team. Their feedback is that too many young people lack these specific basic skills. Companies have highlighted their concerns with the apprenticeship training provided by a number of external training providers including FE colleges. Their feedback was that the training provided was not always responsive to their needs and that training providers needed to ensure that the training provided was business led. Many larger employers in particular support employer led apprenticeship schemes, and by developing their own provision they can tailor their programmes to meet their needs. The Foundation Degree has been set up to provide students with the opportunity to access qualifications and work based experience. The degree is being delivered by FE working in conjunction with HE and the test of its success will be in the extent to which it has produced graduates that meet employers skills needs. It is being piloted this year and the results will be available in Smaller employers find it particularly difficult to invest the time and money needed to manage and deliver apprenticeship training. The level of administration associated with delivering on apprenticeships as well as the costs involved in management time being diverted from production is a burden many felt they couldn t cover. A separate Review of ApprenticeshipsNI Provision is underway and due to report in Actions: A co-ordinated information central source should be used to detail the different education/career pathways that can be taken by students pursuing engineering careers. Apprenticeship training needs to meet the requirements of business and this should be actioned through the implementation of the recommendations which will come out of the Ministerial Review of ApprenticeshipsNI. 195

200 The Foundation Degree 159 should be evaluated at the end of its first year to assess whether it has addressed employers needs. The business community and education providers (further and higher education) should investigate the possibility of establishing a curriculum group (specifically for advanced manufacturing and engineering) which would regularly meet to ensure that courses and qualifications remain relevant to business needs. Consideration should be given to expediting the process which it takes to develop and fund specific courses relevant to growing the manufacturing and engineering sector ACTIONS NEEDED TO ENSURE THAT SUFFICIENT SKILLED RESOURCES ARE RETAINED IN NORTHERN IRELAND TO SUPPORT THE SECTOR A comparison of the salaries offered to engineers in Northern Ireland compared to the South of Ireland shows that Northern Ireland is paying below the levels that can be obtained from working south of the border. This is a particular problem for SMEs that operate close to the border and makes it difficult for them to attract and keep resources. As well as this, organisations in Northern Ireland are paying as little as 15,000 salaries for graduates which will create difficulties in attracting potential entrants to the sector. Companies need to be able to pay market rates if they are going to attract the resource they need and it is particularly important that they attract resources with sufficient expertise to help the Senior Managers consider product/market opportunities which will increase their potential of profit so that they can afford to pay market rates or above in the longer term. In the short term government support is needed to help these companies particularly SMEs afford the talented resource they need to grow and develop profitably. There is a smaller but still significant salary difference between NI and the rest of the UK. Therefore whilst it is projected that Northern Ireland will produce sufficient resource to meet the needs of the local sector, the rest of the UK market will most likely have a gap. In particular the Royal Academy of 159 HLA Engineering pilot 196

201 Engineering has estimated that there will be a shortfall of over 100,000 STEM graduates per annum ( ) across the UK. If this situation arises, Northern Ireland could experience a brain drain with its engineering talent being attracted to better paid positions in the UK. This is an area that needs to be kept under review. Actions: Invest NI to provide top up salary support to SMEs that are unable to afford to pay market rates for engineers in key positions within the companies that have the potential to contribute more to the economy. Key positions are those that require specialist technical skills to help the company develop new products/new markets and to increase their exporting levels. Northern Ireland companies should prepare for the potential risk of engineers being attracted to positions outside of Northern Ireland and develop plans for ensuring they have sufficient resources coming through from HE/FE to meet their needs. Companies should consider setting up scholarships, bursaries and summer placements to attract top talent from HE/FE to them. The development of close working relationships between employers and FE and HE institutions will allow the latter to promote the local opportunities to their students. Universities should provide companies seeking to employ graduates, information on the salaries being paid to graduates. Companies should use the market salary information for graduates to inform their pay strategies for these positions. It is important that companies seek to recruit the best talent for the local economy APPRENTICESHIPS The survey and interview findings highlight a need for more apprentices to be trained in the skills and experience needed by companies. SMEs in particular lack the time or resource to support apprenticeship programmes and there is a need to simplify the apprenticeship programmes so that they can be more easily understood by companies. 197

202 Actions: Larger companies should be encouraged to support SMEs in their supply chain and to take on apprenticeships. SMEs not involved in a supply chain with larger companies should be provided with more incentives to take on apprenticeships. DEL should consider the need to provide support with apprenticeship costs ACTIONS NEEDED TO UPSKILL THE SECTOR The Working Futures Model shows that people in the professional, associate professional, skilled trades and managerial jobs with a large STEM content will be in highest demand across the sector. The supply of 10,526 individuals with STEM related qualifications is predominantly made up of those coming from Further Education Institutions (82.1%) 160. The lower numbers of Higher Education qualifications is a concern; particularly for the annual demand for 394 director and managerial vacancies (including other managers and proprietors) projected by the Working Futures Model - which is where demand is highest. Managers are crucial to ensuring that the sector remains competitive and is up to date with new technologies/developments. There are pressures on the sector locally to contract through the competition to move operations to low cost overseas sites. The response to remain competitive is to add more value to the product through for example producing customised products and adding on services and/or developing new products/technologies. ICT is playing a greater role in manufacturing as the sharing of information with customers and suppliers in the most efficient and secure way becomes essential. These changes will have an impact on the skill requirements of the local workforce as increasing global trade will put pressure on lower skill activities. Invest NI through the Skills Growth programme and DEL through Customised Training and Management Development programmes already have the support processes in place to provide funding to the sector. The RSM survey 161 shows that there is a need to promote these interventions to the sector and to encourage further uptake and therefore investment in management development. The management programmes should include: 160 See Section See Section 6.4.4, Table

203 Strategic Management; Cost Reduction/ Resource Efficiency; Project Management; and Business Development. Given the opportunities through Horizon 2020, some Managers may need development in putting together bids to the European Commission. The RSM survey highlighted a number of immediate skills shortages within the sector, including CNC machining and welding. Work is underway with NRC and SERC to deliver a CNC academy, which will produce skilled resources within one year. If this joint industry/ FE college approach is found to be effective in meeting the needs, then it is an approach which should also be taken to actioning the skills shortages in welding. The Agri-Food, Aerospace and Sustainable Energy sectors have identified specific skills issues and associated actions, which need to be implemented to deliver on the strategies 162. The common requirement across all three sectors is that the training delivered should be employer/demand led and specific to each of the specialisms within each of their sectors. In terms of the skill requirements, there is a strong need for individuals with skills equivalent to levels 4 and 5 in science, technology and engineering qualifications 163. The Aerospace Strategy states that current skill levels of existing staff are below what is required and there is a major challenge in upskilling a large percentage of the workforce. There is a need to increase the number of apprentices with higher levels skills to support the growth. Further higher skill levels are required to support the Agri-Food and Sustainable Energy sectors. Actions: DEL/Invest NI should increase awareness of their training supports to client companies in the advanced manufacturing and engineering services sector, highlighting the need to build capacity within both existing managers and those likely to take up management positions in the future. 162 See Section Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector 199

204 Management succession programmes should be encouraged within those companies with a cadre of junior managers. These programmes will require the identification of employees with the talent and ambition to be future leaders within the company. These employees should be provided with the development needed to ensure they will have the required skills and competencies to manage and lead the companies in the future. DEL/Invest NI should work with businesses/training providers to ensure that the management training provided is tailored to the advanced manufacturing/engineering services sector. The support should develop future leaders with the ability to lead strategically and to ensure NI companies develop a competitive edge. The support provided should ensure it provides access to knowledge of business opportunities on a global scale. DEL/Invest NI should work with advanced manufacturing companies operating with low profit margins to provide access to strategic support that will help them identify value add opportunities which will allow the companies to grow profitably. This could be actioned through the provision of international advanced manufacturing/engineering mentors, working with local companies, to help them develop strategically. The approach taken to CNC machining should be reviewed within a year and if it is has delivered on industry needs then it is an approach which should be taken to dealing with the shortages in skilled welders/design engineers. The skills actions set out in the strategies for Aerospace, Agri-Food and Sustainable Energy should be implemented. The delivery of these supports should be business- led and employers should be incentivised to work with FE/HE as required to deliver higher quality vocational learning. Larger employers should consider the opportunity to involve trainees from their SME supply chains, in any training programmes they have established to provide apprenticeships, thereby reducing the time/ cost to the SMEs. 200

205 ACTIONS NEEDED TO RETAIN SKILLS WITHIN THE SECTOR The workforce in Science, Engineering and Technology occupations is ageing with 31% of skilled workers and 23% of associate professionals aged 50 or over (based on 2010 data) 164. This growing older workforce could mean high replacement demand levels and therefore greater emphasis will need to be placed by employers on how they can attract new workers, if they are to avoid skills shortages and/or how they retain their older workforce longer than might normally have been expected. The human resource policies and practices of companies with regard to training/development for new workers and flexible work patterns for existing workers will play a large role in attracting and retaining workers. Action: Invest NI should provide advice and guidance to companies on how to retain talent through the development of relevant HR policies and procedures ISSUES SPECIFIC TO SMALL-MEDIUM ENTERPRISES (SMEs) SMEs are much less likely to invest in training for their employees compared to medium-sized firms, with 38% of SMEs providing no training at all 165. The main reason 166 cited by 66% of employers who had not provided any training in the previous 12 months was that there was no need, predominantly because their staff were fully proficient. Other issues cited related to the expense of training, time issues, training supply issues (e.g. relating to the availability and quality of courses available locally). Action: SMEs need external support to identify the training needs within their companies. Given that a high proportion of SMEs do not feel they need training, it is important this assessment is carried out independently, but by specialists who understand the sector. 164 Source: Working Futures Model 4 (Institute for Employment Research, University of Warwick) 165 See Section 4.12, Table Identified in NESS09 for not providing training 201

206 NEED FOR SECTORAL SUB-GROUPS Given the diverse nature of the advanced manufacturing and engineering sector there is a wide range of issues affecting each sub-sector. Action: DEL should therefore consider establishing a range of sectoral sub groups to analyse and take forward specific work programmes unique to their sub sector. This will ensure that tailored support can be developed to address specific issues facing identified sub sectors. From the analysis four potential sub-sectors could be considered: Aerospace/Advanced Manufacturing; Energy & renewables; General Manufacturing; and Education. 202

207 APPENDIX 1: TERMS OF REFERENCE 203

208 Research Objectives Define the sectoral footprint and size of the advanced manufacturing and engineering services sector; Highlight the economic and statistical value of the sector and its importance to the Northern Ireland economy; Assess the current skills profile of the current workforce (by qualifications) in the sector and highlight the current demand of these skills; Analyse regional salary information across the advanced manufacturing/engineering services footprint in UK and Ireland. This should include reviewing salary information by skill level, particularly at the level of graduate and post graduate; Assess the supply of skills (lower, intermediate and higher levels) for the sector from our schools, Further Education and Higher Education Institutions; Determine the future skill requirements for the workforce in the sector in Northern Ireland; Highlight any skill imbalances which currently exist or are forecast to exist; Identify what actions are needed to ensure that the supply of these skills in Northern Ireland is sufficient for the sector; and Provide an evidence base for the development of an Action Plan for the advanced manufacturing and engineering sector. Specific Requirements Review current research studies and evidence (from SSCs, UKCES, Invest NI, DETI, CBI, Royal Society of Engineering) on the advanced manufacturing and engineering services sector; Develop an economic and statistical model to examine the demand for skills (at lower, intermediate and high level skills) under a range of scenarios, over the short, medium and longer term. Identify the trends and drivers of change which will have the greatest impact on the future skill requirements for the sector; Determine the implications of these trends/drivers of change for the skills requirements for the industry and any associated impact for training provision; Consult with relevant stakeholders within the industry including employers, their representative organisations, schools, FE and HE Institutions; Identify examples of best practice (locally, nationally and internationally) in relation to skills training, delivery of research, industry engagement and 204

209 collaboration. It should be highlighted how this could be tailored to Northern Ireland; and Identify existing advanced manufacturing and engineering services programmes, niches and research competencies in Northern Ireland s Higher and Further Education Institutions. 205

210 APPENDIX 2: CONSULTATIONS 206

211 Section 11 of the report includes consultations and focus groups with the following stakeholders: Table A2.1: List of Stakeholder Consultations and Focus Groups Stakeholder Consultations DEL Career Service Sector Skills Councils: SEMTA Energy and Utility Skills STEMNET Queen s University Belfast Stakeholder Focus Groups GCSE and A-level Pupils Careers Teachers Stakeholder Consultations 207

212 APPENDIX 3: SURVEY RESULTS 208

213 A3.1 Profile of Respondents Table A3.1 Sector Profile of Company Survey Respondents Sector Frequency Percentage Aerospace % Bus and automotive products 7 8.9% Other transport products and services 2 2.5% Electrical and optical equipment: photonics 4 5.1% Sustainable energy 1 1.3% Polymer products 0 0% Food, beverage and tobacco products 7 8.9% Mechanical equipment and machinery 7 8.9% Textiles and textile products 0 0% Wood and wood products 1 1.3% Publishing and printing 1 1.3% Chemicals and chemical products 0 0% Other non-metallic metal products 0 0% Basic metal and fabricated metal products % Other, including: % Civil engineering; Construction; Waste management; Packaging; and Medical/pharmaceutical Total % respondents failed to provide an answer for this question 209

214 A3.2 Size of Companies Table A3.2: Size of Companies Number of Employees Frequency Percentage < % % % % % % Total % 210

215 A3.3 Skill Profile of Workforce Table A3.3: Profile of Workforce Occupation Number of employees Skilled trades Operatives Professionals Associate professionals/ technicians Managers Note: Not all respondents provided an answer to this question. 211

216 A3.4 Average level of qualification Table A3.4: Average level of qualification of advanced manufacturing and engineering staff for each occupation 169 Occupation Secondary Education Further Education Apprentices hips Bachelor s Degree/BTEC Advanced Professional Diploma Post-graduate Level Other Professional Qualification Skilled trades 23.7% (n=14) 39.0% (n=23) 35.6% (n=21) 0% (n=0) 0% (n=0) 1.7% (n=1) N = 59 Operatives 80.0% (n=40) 10.0% (n=5) 8.0% (n=4) 0% (n=0) 0% (n=0) 2.0% (n=1) N = 50 Professionals 0% (n=0) 33.3% (n=15) 2.2% (n=1) 53.3% (n=24) 8.9% (n=4) 2.2% (n=1) N = 45 Total 170 Associate professionals / technicians 8.3% (n=3) 58.3% (n=21) 0% (n=0) 22.2% (n=8) 11.1% (n=4) 0% (n=0) N = 36 Managers 1.5% (n=1) 19.4% (n=13) 1.5% (n=1) 56.7% (n=38) 19.4% (n=13) 0.5% (n=1) N = Note: 71 respondents answered this question, 17 respondents did not provide an answer. 170 Note: The percentages used in table 6.4 have been calculated as a percentage of the row total for each occupation. 212

217 A3.5 Difficulties experienced in filling Advanced Manufacturing and Engineering vacancies Table A3.5: Have you experienced difficulties in filling advanced manufacturing and engineering vacancies over the last two years? Occupation Yes No Don t Know Skilled trades 47.8% (n=32) 46.3% (n=31) 6.0% (n=4) Operatives 23.7% (n=14) 74.6% (n=44) 1.7% (n=1) Professionals 40.4% (n=23) 49.1% (n=28) 10.5% (n=6) Associate professionals/ technicians 30.6% (n=15) 59.2% (n=29) 10.2% (n=5) Managers 22.8% (n=13) 70.2% (n=40) 7.0% (n=4) A3.6 Calibre of new entrants to the company over the last three years Table A3.6: How would you rate the caliber of new entrants to your company from each of the following sources over the last three years? (1=very poor, 5=very good) 171 Source 1 (very poor) 2 3 (average) 4 5 (very good) Apprenticeships (n = 38) 13.2% (n=5) 13.2% (n=5) 28.9% (n=11) 23.7% (n=9) 21.1% (n=8) FE Colleges (n = 31) 12.9% (n=4) 6.5% (n=2) 51.6% (n=16) 19.4% (n=6) 9.7% (n=3) HE Institutions (n = 37) 8.1% (n=3) 0% (n=0) 35.1% (n=13) 37.8% (n=14) 18.9% (n=7) 171 Note: These percentages have been rounded to 1 decimal place and therefore may not add to exactly

218 A3.7 Awareness of DEL or Other Government Programmes, and Usage Table A3.7: Awareness of DEL or Other Government Programmes, and Usage Programme Yes aware No not aware Yes have used No have not used DEL: ApprenticeshipsNI 83.9% (n=52) 16.1% (n=10) 45.5% (n=25) 54.5% (n=30) DEL: Essential Skills 66.1% (n=37) 33.9% (n=19) 28.3% (n=15) 71.7% (n=38) DEL: Management and Leadership 56.6% (n=30) 43.4% (n=23) 26.4% (n=14) 73.6% (n=39) DEL: Skills Solutions 43.6% (n=24) 56.4% (n=31) 6.3% (n=3) 93.8% (n=45) Others: 16.7% (n=3) 83.3% (n=15) 16.7% (n=3) 83.3% (n=15) YES Scheme and Invest NI BITP 172 A3.8 Percentage of Training Expenses spent on training for Advanced Manufacturing and Engineering Table A3.8: What percentage of your training expenses was spent on training for advanced manufacturing and engineering (n = 39) 173 % of training budget spent on advanced manufacturing and engineering employees Frequency % 0-10% % 11-30% % 31-50% % 51-80% % % % 172 BITP has been replaced by the Skills Growth Programme respondents did not provide an answer for this question. 214