Are inflated wages for STEM candidates putting pressure on businesses?

Employment & Skills | newswire-national | Reports | South West
STEM roundtable debate

The region’s STEM-based businesses must start hiring on cultural fit as well as strictly technical capabilities if they are to overcome problems caused by exponential hikes in wage expectations due to a declining talent pool.

That’s the advice from a group of West of England engineering and IT business leaders who met to discuss problems in recruiting into these sectors as technical candidates are pushing up remuneration and perks packages to reflect their ‘hot property’ status.

Speaking at a roundtable led by High Growth Knowledge Company at the Bath Priory Hotel, participants said seeking talent from other sectors, hiring younger people and those who are willing to be trained in-house would support sustainability.

Neil White, Director of Intelligent Systems at international engineering consultancy Altran, said: “Getting people through the door over the last 18 months has been difficult for lots of companies our size. When you look at the fact there is a massive shortfall in engineers in the UK, we would expect to see this happen.

“But you can’t separate the recruitment and retention elements – they’re part and parcel at the moment. If you hire someone in at a higher rate than other people are on, that’s going to cause problems.”

Tracey Wardrope, head of HR at Bath-based BMT Defence Services, said: “Yes, as soon as the market rate starts to go up, things become unaffordable so commercially it’s very difficult to keep pace with the skill set that’s out there – and it’s getting worse at an increasing level.

“This has really put the issue high up the agenda as companies are being made to make serious decisions based on not just existing talent but future capabilities.”

Beverley Ford, managing director of Chippenham’s Rota Val, said: “We still find it very difficult to employ engineers at any level. We don’t necessarily need graduate level and it’s very difficult to get anybody below that – but it’s the same. The people that you bring in come in at a higher rate which then upsets the workforce that you’ve got. When you’ve only got a workforce of 30 you know it does impact greatly, which is a struggle.”

Offshoring was cited as one of the potential solutions to the situation, but higher demand for this is also changing rates.

One attendee, a technical director said: “Offshoring is needed to diversify and nearshoring in particular has been a good solution. But now nearshoring isn’t as cheap and that’s only going to get worse. More demand for nearshoring means these organisations will increasingly understand they can get their hourly rate closer to what people charge in the UK.”

A variety of recruitment solutions were mooted by the group, with the majority finding that internal training and hiring for cultural fit was one of the most successful ways of ensuring sustainability.

Matthew Hubbard chief operations officers at AB Dynamics in Bradford on Avon, said: “It can be a problem to recruit people who are further through their careers and so I’ve almost given up on it.

“We’re trying to get good graduates and mould them through training into the skill sets we need, then bring them up through the business.

“You also have to think laterally to solve your problems. We take on people who have come out of the forces, for example, as there’s good access to those locally and they really fit our company culture. It’s working very well, and we’ve now got seven apprentices on board.”

Alan Furley, Director at ISL Recruitment in Bristol which specialises in IT and engineering roles, said: “We are increasingly seeing the need for people to hire on skills sets that are softer and have less focus on specifications because the market is shifting so dramatically.

“Although that’s not to say its commonplace. The vast majority will still want a redbrick university degree as there is a resistance or a misunderstanding about why someone who perhaps has a more unusual route into work might be worthy of their investment. Ultimately, that means everyone could miss out on really valuable skills.”

David Kelly, co-founder at creative digital agency Storm, said: “When you look at studies that ask employees to list reasons for workplace happiness, and this is inclusive of international studies, level of pay is almost always in the bottom half of any list.

“The expectation for employers needs to be increasingly that culture and cultural fit are more appealing to candidates. Storm’s experience of recruiting is that UK technology agencies often find it easier than single product technology companies to secure candidates due to the variety of projects on offer. Candidates know that for one month of the year they might be working on a robotics and AI project and in another month on some sort of big data system, and so on.

“This variety and diversity is especially attractive for the 20 to 35 age group when compared with the potential of long-term work on a single digital product or service.”

Simon Palmer, director at Yate-based Qtac, said: “We have a host of in-house perks, flexible working and great work experience days out and we train internally. We can attract the college students and the people who come out of sixth form. We find the problem is from graduate level and mid-level. We really do struggle. We find it incredibly hard to hire at a more senior level.”

There was also concern about the lack of joined up thinking around apprenticeships and education that helps feed the pipeline of new talent into the workforce.

Apprenticeships were raised as being a good source of new employees for companies with the right infrastructure to deal with the training demand. But here challenges were that the local systems were not joined up enough for either the young people or employers to access.

John Oliver, principal at University Technical College Swindon, said: “We do a lot of work with different employers and they’re saying exactly the same thing – that they cannot recruit.  Part of this is because there’s a real disconnect within the government about priorities on what to teach and where.

“But there is a real desire for young people once they’ve had the inspiration of what engineering and digital opportunities are out there, and what UTCs are really successful at is actually progressing students into apprenticeship with employers. We just need to do more of it as there is such huge potential for this kind of entry into the jobs market.”

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