Labour shortages continue for electrotechnical firms

Electrotechnical businesses continue to be held back by slow growth, partly blamed on a shortage of adequately skilled workers, finds survey.

The latest quarterly survey of the UK engineering services sector, backed by leading trade bodies ECA, BESA, SELECT and SNIPEF, paints a picture of an overriding issue which has been of consistent concern for the last four quarters.

Half of all survey respondents (48 per cent) said they currently have vacancies in their organisations. Half of these (50 per cent) said they have trouble filling these vacancies due to an insufficient supply of applicants. Just under half said that applicants lacked the right attitude or behaviours (46 per cent), and that applicants’ pay expectations were too high (45 per cent).

Over eight in 10 (85 per cent) survey respondents were SMEs – meaning they employ 250 or fewer people.

These findings underscore ECA’s ongoing work to improve skills in the sector, including  the ECA Recharging Electrical Skills Charter. This highlights the significance of the electrical contracting sector and electrical skills to the economic opportunities and practical delivery of  the UK’s net zero goals.

ECA COO Andrew Eldred said: “Through further action at national and local levels we need to bring the number of electrical apprentice starts up to a sustainable level. We should also expand appropriate green upskilling opportunities for already qualified electricians, using the industry’s own ‘Electrician PLUS’ kitemark.

“Policymakers need to start listening to engineering services SMEs and reshape the skills system to deliver training routes which real-world employers value and recognise. This is essential if we are to build an appropriately sized workforce with the right qualifications to install low-carbon technologies efficiently and safely.”

When it comes to being paid on time, 63 per cent of survey respondents said commercial clients and main contractors took 31 to 60 days to pay for work. Thirteen per cent said this can take 61 to 90 days. Half (49 per cent) of respondents said public sector clients can take 31 to 60 days to pay – and 13 per cent – over one in ten – said they can take 61 to 90 days.

Almost three in five (58 per cent) respondents said between one and 10 per cent of their turnover is currently being held in retentions.

Rob Driscoll, ECA Director of Legal and Business, said: “Until the scope for late and abusive payment (including retentions) is resolved the health of the engineering services sector will continue to be stunted.  Slow growth disproportionately affects SME firms who tend to be at the end of the supply chain. Without more action to fairly and proportionately spread risk throughout the supply chain, there is a potential for unnecessary business failure in the industry. For electrotechnical firms to remain resilient, there must be fairer risk sharing between clients and industry. There will be little growth in the economy towards green energy and net zero if those at the delivery end of the supply chain carry a greater burden of risk.”

BESA’s Director of Legal and Commercial Debbie Petford. said: “In our recently published Top 30 M&E Contractors Report, many of the sector’s senior managers noted that the prospects for growth were improving – particularly in high value sectors like healthcare, data centres, and research.

“However, they continue to be worried about the lack of skills and diversity in the industry’s workforces, and the need to improve productivity by wider adoption of digital and off-site solutions which require new skillsets.”