Just as UK manufacturing was beginning to recover from the fallout of Brexit, we’re been hit with a never seen before the global crisis. One that’s impacting our supply chains, the market demand, our bottom line and our employees – and family’s health.
But taking a closer look, the market seems to be recovering – Perhaps not quite in the way we’d expected, but in a new way. A more agile way.
Systems have been updated. Processes have been revived. Operations have been reviewed and improved and the production floor has never been so lean.
But just as we begin to get back on our feet, the industry is going to be hit with a new challenge – And one that cannot be so easily pivoted around… Baby Boomers retiring.
The retirement in itself is perhaps not the problem but rather the loss of technical and institutional knowledge that will disappear with it. According to statistics, the rate in which Baby Boomers are retiring has doubled over the past eight years and will continue to increase until the last Boomer retires aged 65 in 2030.
According to a study done by CIPD, the four industries with the largest number of 50 years old+ workers (health, retail, education, and manufacturing) account for approximately half (47%) of all 50+ workers in the economy. There is a widespread of ages by industry, with a range of over a decade between hospitality (34 years) and primary industries (47 years). Whilst a little alarming given the fast-approaching year of final Boomer retirement, 2030 – we shouldn’t be surprised. We’ve done little to inspire and attract Millenials and Gen Zs, resulting in very few considering Manufacturing as a career option. This is a problem. And one that may well be just as harmful as the current economic crisis.
So how can we avoid the post-crisis demographic crunch?
According to CIPD’s MegaTrends – Aging Gracefully whitepaper, there are a number of ways in which manufacturing employers and policy-makers can mitigate the inevitable crunch that result in Baby Boomer retirement, but here are a few which can be embedded today.
1. Lower the barrier to entry
Doing away with mandatory qualifications and restrictions on applications is a way of encouraging the next generation of workers in the door. They may not have the entry-level requirements you want, but it does give you an opportunity to train people with the technical skills they need from their more experienced colleagues – Thus eliminating the risk of this knowledge being lost. The push on apprenticeships and the Government’s Kickstart Scheme also makes hiring less experienced people more economically desirable.
The Scheme will create hundreds of thousands of high-quality 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
Whilst there may be concerns about reduced quality the alternative – under-provision could be worse. Leverage the schemes available with the talent already within your business means that you can develop a new generation of talent that acquires business-critical skills on the job and drives an inclusive recruitment process.
2. Continuous Learning
Continuous learning and development are critical for Employers in UK Manufacturing. With the risk of vital knowledge and skills disappearing come 2030, it’s important that our in-house and external suppliers have geared up to front-load the next generation with the skills they need to take over and scale our businesses.
This does not come without its challenges. Older workers are less likely to take part in workplace training, which is often because they are not offered or encouraged to take part. By encouraging older workers to not only take part but to be involved in the program development and delivery is not only a great way to pass on their skills, it also helps reengaged the workforce in a joint-venture activity that rewards them publicly for the knowledge they have gained.
3. Flexible Working
Flexible working has long been something that employees have wanted but has been resisted by the industry. The global pandemic and the forced digitalisation of many businesses has meant that the Manufacturing workforce has had a taste of freedom and they’re not going to want to give it up. This paired with the ageing workforce will increase the need for employers to consider and implement flexible working options – As more and more people will need to balance work with caring for ageing partners, relatives and potentially deal with health-related issues. The key to an effective flexible working program is to get senior-level buy-in and implement proper training with management to help them manage remote and flexible working teams to power maximum productivity.
The post-pandemic economic jumpstart might plug the immediate gaps in our businesses, but what happens when our most skilled workers begin to retire? It was thought that the most significant risk to UK Manufacturing was Brexit, then recession. Now? Now it’s Baby Boomers retiring. AI and automation will only fix part of the problem – A machine can only make decisions it’s programmed to make or to learn to make. This level of ambiguity means there will always be a need for skilled workers, and if the sector hopes to sustain growth in the coming decade the challenges around skill-shortage must be addressed.