At face value, the UK automotive sector is thriving. Worldwide sales have reached a record of 88 million automobiles in 2016, an increase of 4.8% from the previous year, according to the 2017 Automotive Trends report from PwC.

However a combination of fast-evolving technologies, and the demand for higher skilled workers is putting the continued growth of this sector at risk. This skills shortage is leading to vacancies across the sector.

Skill vacancies

Automotive companies are struggling to fill vacancies requiring higher skilled employees; in particular engineering positions. These jobs cover a number of disciplines including design, production, programmes and quality; all of which require differing levels of skill, experience and expertise.

So what are the main reasons for this shortage of highly skilled workers? The growth of businesses, technological advancements, competition in the UK labour market, not enough young people taking STEM subjects (science, technology, engineering and maths) and the lack of availability of skills in the job market, to name a few.

As a result, businesses have to use their existing workforce as well as employing contractors to fill the gap.

International talent

In response to these pressures, the automotive sector is increasing its reliance on the flow of migrant labour. This leaves the sector vulnerable to increased costs and visa issue implications.

Brexit is also likely to have an impact, as the movement of people and visa regulations are no doubt going to be affected.

There is a clear need to develop and nurture home-grown UK talent otherwise the UK is at risk of losing its reputation of supplying high quality products within the sector. This is something that has been at the forefront of the world market.

Brexit could stem the flow of skilled labour from overseas

Bridging the gap

There are a number of possible answers to this challenge. Apprentices have long been used in the UK automotive sector and have been a tool in encouraging young people to take up careers in the industry. They provide an alternative flexible, highly skilled and productive workforce for the future.

The Automotive Industrial Partnership (AIP) established the Automotive Apprenticeship Matching Service which re-directs talent from over-subscribed automotive programmes to other companies within the sector that have similar opportunities.

Recognition of the value of a service such as this is crucial, as it can encourage businesses across the industry to continue to look at how they can benefit and maximise the opportunities of using apprentices.

Additionally, businesses could develop local talent while continuing to search for resources globally and to explore a more diverse workforce. Companies may need to consider taking further steps to manage the longevity of their current workforce particularly around working patterns and practices.

The introduction of T-Levels

With the recently enforced Apprenticeship Levy, and in an effort to address the skills shortage so prevalent in the automotive sector, a new system has been introduced in the shape of T-Levels. These are an alternative qualification to traditional A-levels.

T-levels will allow 16-19 year olds to study in 15 sectors where substantial technical training is required to progress into employment. The courses aim to make access to the job market easier as students will gain a recognised qualification.

According to this year’s Spring Budget, these new qualifications will be introduced from autumn 2019, overhauling how technical education is taught and administered in the UK. The number of hours of training for students taking T-Levels will increase by over 50% and they will be required to undertake an industry work placement.

T-Levels are a bid to improve the UK's skills base

The government is proposing to allocate £500 million a year in funding for technical and vocational education. Plans have been made to replace 13,000 existing qualifications with five new routes designed to be more relevant to employers’ needs.

This will include providing training routes specific to different industries, including engineering and construction. Maintenance loans, which are currently available to university students, will also be extended to those who are studying technical courses.

Future generations

The skills shortage is a rising issue within the automotive sector, exacerbated by the continued uncertainty around the wider impact of Brexit, particularly on the movement of talent. Training and development has a major role to play in ensuring the UK automotive industry remains an attractive proposition on the world stage.

Measures are being put in place to try and reduce the skills gap, as is clear in the introduction of the new T-Levels.

Developing and nurturing young talent, and providing a clearly defined pathway into the automotive sector, is fundamental to its continued growth, and that of the UK economy as a whole. It is too soon to tell how far these steps will bridge the gap, but they are certainty a step in the right direction.

Richard Barker is senior associate at national law firm Mills & Reeve.