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|Navigating Brexit: Migration minefield report||23/05/2018|
EEF, the manufacturers’ organisation warns that nearly half of the UK’s manufacturers remain concerned about their ability to access skills post-Brexit, according to a new report.
The slump in job applications from the EU has slowed since last year, but 17%% of companies saw a drop in applications from European citizens. In addition, a further 13% of manufacturers still report an increase in EU workers leaving their businesses. Many of those employees are returning to the EU permanently, with companies struggling to recruit suitably skilled staff in the UK.
The report, 'Navigating Brexit: The Migration Minefield' published by EEF, The manufacturers’ organisation and global law firm Squire Patton Boggs, calls on government to move swiftly to give companies and their workforce increased clarity over the future of EU citizens working in the UK to stem the outward flow.
Proper guidance for EU workers seeking settled status would do much to mitigate this problem, according to the report. Four in ten (39%) of manufacturers need support in understanding the ways to support EU employees to gain residency/settled status and 68% want guidance on what the changes after March 2019 will mean for employers and their EU employees.
In an attempt to stem the growing skills issue, companies are taking steps to hold onto older workers with specialist skills, with 16% having implemented or are currently implementing such policies.
Nearly half (47%) of those manufacturers questioned are also increasing training programmes for all existing employees with 37% increasing apprenticeship and/or graduate recruitment programmes. Improving pay and benefits packages is the route taken by 20% of companies in order to attract and retain staff for longer and 21% are accelerating plans for automation.
Posting workers to the Europe, even for a short time, will become more complex after March next year, when Britain officially leaves the European Union. This may come as a shock to the almost three-quarters (71%) of manufacturers regularly sending employees to other EU member states,
Even a simple trip, such as attending a trade fair or exhibition for a day, which 57% of manufacturers say have done in the past 3 years counts as an official “posting”. A quarter (24%) of companies polled for the report are posting workers for servicing and repair as part of ongoing contracts with customers across Europe and over half (52%) sending employees to Europe for sales and marking purposes
Tim Thomas, Director of Skills and Employment Policy at EEF said:
“Skills shortages are endemic in manufacturing and engineering and companies are becoming increasingly concerned about their ability to access the skills they need post-Brexit. While the slump in job applications from the EU has slowed, there is still much to be done to make sure UK businesses are still able to attract the very best talent from Europe over the coming months as we proceed towards our exit from the EU as well as retaining that talent after Britain leaves the EU.”
On posting of workers, Tim Thomas added:
“Many companies do not realise that sending a member of staff to the EU to attend a conference or trade show involves the same posting mechanism as sending someone to the EU for a month or more. The government must deliver a good trade deal which lets businesses travel into the EU for short term posting as a matter of urgency. This is particularly important in terms of servicing and repair work which are tied into most contracts as well as having the ability to attend trade fairs and market new products and services to sell into EU markets.”
Annabel Mace, Partner and Head of Immigration at Squire Patton Boggs, added:
“The UK Government should indicate now that a light-touch post-Brexit immigration policy for EU citizens will be introduced and without mirroring the cost and complexity associated with the Points Based System for non-EU workers. With less than two years to go before the end of the proposed transition period and the possibility that a new immigration system may take at least another year to be decided on, let alone implemented, it is difficult for manufacturers who rely on EU workers of all skill levels to make meaningful contingency plans.”
|Industry urged to boost investment in wellbeing to reap productivity rewards||16/05/2018|
Britain’s manufacturers are being urged to grasp the opportunity of greater investment in the wellbeing of their workforce and reap significant rewards of improved productivity and performance, according to a new survey and study.
Published by EEF, the manufacturers’ organisation and Westfield Health, and carried out by the Institute of Employment Studies, the study and survey show that the overall mental health and wellbeing of employees is inextricably linked to motivation, engagement and performance in the workplace.
In particular, it shows that good wellbeing can bring significant benefit to those companies employing lean manufacturing processes, especially if the focus is on good mental health, resilience, autonomy and involvement at work. According to the study this can bring productivity improvements of up to 10%.
By contrast the study highlights that poor wellbeing can increase costs, reduce motivation and employee engagement and take up management time dealing with issues such as absence and occupational health costs.
Commenting Steve Jackson, director of Health, Safety & Sustainability at EEF, said: “More and more companies are recognising the benefits and opportunities of promoting the wider wellbeing of their employees. This can being significant benefit to companies with employees who are better motivated and engaged.
“Giving employees support and a positive psychosocial work environment has a proven impact on productivity and means that employees embrace the challenges and demands of work with more energy and commitment.”
Director of Wellbeing, Richard Holmes, of Westfield Health adds: “Workplace-related stress, illnesses and mental health issues are becoming a bigger concern than ever. When workers’ minds aren’t completely on the job it can potentially lead to costly mistakes, accidents and health and safety risks.
“At Westfield health, we believe in 'well beings’. When you believe in the physical and emotional wellbeing of your staff it can completely transform the face of your business, improve productivity and create a positive working environment. But it needs to start from the top down, business leaders need to create a culture where people’s health and wellbeing is prioritised.”
Stephen Bevan, head of HR Research Development at the Institute for Employment Studies says: “This research shows that there is a clear business case for investing in workforce wellbeing. This goes beyond saving money and extends to issues of product quality and customer service too.”
According to the survey, manufacturers to date are continuing to address health and safety in a very traditional way. This leads to a focus on compliance, physical health, risk assessment and promoting good health and safety practice rather than addressing psychosocial and mental health factors, which can equally impact on employee performance.
A significant number of companies (80%) do see improving productivity as a reason for investing in wellbeing measures, but just 8% see it as the most important reason for doing so. Furthermore, fewer than a third of companies invest in healthy living programmes for their employees – this is despite evidence showing that employees in good health are up to three times more productive.
The survey also shows that whilst over 60% of companies carry out a physical risk intervention, just 15% currently assess work risk to mental health and only 1 in 5 invest in measures to promote mental health. Additionally, fewer than a third of companies engage in training managers in managing stress and just 1 in 5 companies are using well-known interventions such mental health first aid (MHFA) training.
According to EEF, the lack of attention to wellbeing and mental issues means that employers are missing out on potential opportunities and benefits of improving productivity and performance through good job design, positive mental health and supporting management in maximising the productivity benefits of ‘lean’ and other processes.
The study suggests three key areas where employers should focus to maximise the wellbeing of their employees and improve the psychosocial workplace environment:
1. Job Design – Not only preventative in promoting health but employees in jobs that allow control, autonomy and a degree of discretion over what they do tend to be more engaged and productive.
2. Employee Involvement – Research has shown that workplaces with high degrees of employee involvement tend to be more high performing. High levels of work involvement and collective decision making promotes positive mental health, even in pressurised environments.
3. Employee Engagement – This is both with the organisation and its values, as well as the job itself. There is a strong correlation between high levels of psychological wellbeing at work, high levels of engagement and higher performance and productivity.
EEF and Westfield Health will be hosting a webinar with the researchers from the Institute for Employment Studies to discuss the findings and their implications for manufacturers on 27th June.
• The survey of 141 companies was carried out between January and March 2018.
|Industry urged to boost cyber defence investment||26/04/2018|
Almost half of manufacturers have been the victim of cyber-crime, and a quarter have suffered some financial loss or disruption to business as a result, according to a new report published by EEF, the manufacturers’ organisation and AIG, and carried out by The Royal United Services Institute (RUSI).
The manufacturing sector is the third most targeted for attack, with only government systems and finance more vulnerable. Yet manufacturing – which has 2.6 million employees, provides 10% of UK output and 70% of business research and development – is amongst the least protected sector against cyber-crime in Britain.
The new report, Cyber-Security for Manufacturing, pinpointed the susceptibility of manufacturers to cyber risk, revealing that 41% of companies do not believe they have access to enough information to even assess their true cyber risk. And 45% do not feel that they do not have access to the right tools for the job.
Cyber threat is holding back companies from investing in digital technologies, with a third of those surveyed nervous of digital improvement. Moreover, 12% of manufacturers admit they have no technical or managerial processes in place to even to start assessing the real risk.
One of the easiest forms of cyber-attack comes through poorly protected office systems, often the first implemented historically within manufacturing businesses. The report looks at a number of real-life examples, including two where companies production systems were infiltrated and severely disrupted after hackers gained access to their IT systems by initially hacking into unprotected office software, used to keep HR and admin records.
Commenting Stephen Phipson, CEO of EEF, The manufacturers’ organisation said: “More and more companies are at risk of attack and manufacturers urgently need to take steps to protect themselves against this burgeoning threat.
“EEF has a vital role supporting manufacturers in the face of this challenge and we are working closely with RUSI, whose world-leading Cyber Security Research Programme is well established as a key voice to understand the fight against the threat of ever evolving cyber-crime to the modern business.
“We know businesses cannot afford to ignore this issue any longer and while we welcome government’s progress in improving cyber-security resilience, to date through the work of the NCA and NCSC, there needs to be an increasing focus given to the specific needs of manufacturing, which hitherto has been lacking.
“Failing to get this right could cost the UK economy billions of pounds, put thousands of jobs at risk and delay the supply of essential equipment to key public services and major national infrastructure projects. I hope this report underlines the critical risk to government and industry”.
Romaney O’Malley, head of UK regions & head of industrials at AIG Europe adds: “For many manufacturers, cyber risk is still not considered a principal risk on the risk register. Nevertheless, the cyber threat landscape has evolved over the last year, with attacks becoming more sophisticated and more broadly disruptive. There is an increasing level of state-sponsored attacks between nation states, where companies infected by malware may just be collateral damage. The potential threat from cyber-crime is widespread.
“There is evidentially significant need for greater awareness and understanding of the importance of cyber risk management, not only to protect existing businesses, but to create more secure environments to grow and capitalise on the potential that digital technology advances bring to manufacturers.”
Dr Karin Von Hippel, director general of RUSI said: “The importance of the manufacturing sector to the security of the UK economy cannot be overstated. Increasing digitisation creates further opportunities, but also exposes us to potential vulnerabilities to cyber-attacks, whether from criminals or nation-state adversaries. The sector needs to recognise these risks and respond accordingly.”
The report urges companies to begin a programme of continuous assessment of which people, information and technologies are critical to their organisation and undertake real-time scenario planning to map out the consequences of a cyber-security infrastructure or data breach. More and more customers are demanding cyber security guarantees from their suppliers and omore than a third of manufacturers admitted they could not to this.
|Cyber attacks hit 'almost half of manufacturers'||23/04/2018|
Industry urged to boost cyber defence as almost 50 per cent of manufacturers report attack – EEF/AIG survey.
Nearly half of manufacturers have been the victim of cyber-crime, and a quarter have suffered some financial loss or disruption to business as a result, according to a new report published today.
The manufacturing sector is the third most targeted for attack, with only government systems and finance more vulnerable. Yet manufacturing - which has 2.6 million employees, provides 10 per cent of UK output and 70 per cent of business research and development - is amongst the least protected sector against cyber-crime in Britain.
There are five technical controls in Cyber Essentials:
Whilst the identity of the company affected and the likely attackers remain unclear, it has been revealed that the target was part of the facility’s safety system, designed to stop automated equipment going beyond safe operating conditions. The malware was designed to override this.
|Manufacturing employees starting to get itchy feet||04/04/2018|
Labour turnover in manufacturing went up in 2017 as more workers ignored economic and political uncertainty, and instead took advantage of buoyant activity in the sector to move onto pastures new, according to the results of the latest annual Labour Turnover survey from EEF, the manufacturers’ organisation.
The data shows that labour turnover – people leaving companies through resignation, redundancy, retirement or dismissal – rose in 2017 to 13.2%, up from 12.3% in 2016. However, the rate still sits below the 2015 figure when turnover was at 15%.
The smallest rate of churn was seen in the motor vehicles and other transport and equipment sector at just 11.4%, whereas the rubber, plastics and chemicals sector saw the highest at 15%. With 17.1% of employees moving on, the East of England had the highest turnover rate in the country.
Companies with 101-250 employees had the largest proportion of employees on the move at 15.6%, which is markedly higher than the smallest employers (1-50) where turnover was just 9.3%.
Lee Hopley, chief economist at EEF, says: “The pickup in the rate of churn could be a sign that activity is on the rise across the sector, with employees on the hunt for new opportunities and employers able to lure people into new vacancies with attractive packages.
“There are, however, a few things that could be having an impact on rates of labour turnover, such as the potential loss of EU workers following the decrease in net migration from the EU. We will also be watching with interest this year to see if there are calls for bigger pay packets as demand for skills outstrips supply and what the impact of increased labour churn might have on productivity through disruption to business processes.”
|Course covers global ISO 45001 Standard||22/03/2018|
Manufacturers are now able to become certified to the world’s first globally recognised health & safety standard with the opportunity to train their internal auditors via an course EEF, the manufacturers’ organisation, is launching
The new standard will bring a number of new concepts such as leadership, continuous improvement and stakeholder management and for health & safety it presents an opportunity for businesses to be more strategic, including the requirement to look at the wider health and safety implications of the supply chain, i.e. procurement, outsourcing as well as contractors.
For global businesses it provides a framework to manage health & safety consistently across international borders and ensure that it is managed and measured consistently. For small and medium size businesses it will also bring them in to line with international approaches to risk management and will give them an edge when competing for global contracts.
In response EEF is launching its first IRCA (International Register of Certificated Auditors) approved course in partnership with QMS Skills to help companies gain the auditing skills needed to help facilitate transition to ISO 45001 certification. It starts with a two-day auditor transition course on 17 April and will be followed by further courses, including a five day lead auditor course later in the year.
By completing the course attendees will gain IRCA certification which is recognised internationally with many organisations using it as a benchmark requirement for auditors. It will also give attendees a wider insight into the Annex SL Higher Level Structure and from this the opportunities that come from integrating management systems for issues such as quality and environment.
Commenting, Mike Denison, EEF Health & Safety Consultant, said: EEF and QMS are working closely to provide a full suite of IRCA approved auditor courses to assist organisations to understand better what is expected of an audit and the auditor. IRCA approval is widely recognised as a high standard of auditor training.
Transition training courses provide the knowledge of the changes to a revised ISO standard and the skills to audit against the revised standard. It is recommended for professionals working in organisations certified to an ISO standard that has been revised or those looking to work with a newly revised standard.
On successfully completing these modules delegates will:
- Know and understand Annex SL as a framework for ISO management systems
- Know and understand the requirements of ISO 45001:2018
- Be able to audit ISO 45001:2018 based OHSMS requirements effectively.
|EEF wins top European award||20/03/2018|
EEF, the manufacturers’ organisation, has beaten off competition from across Europe to be crowned Best National Association at the European Association Awards 2018, held in Brussels in February. EEF was also shortlisted for Best Use of Social Media.
The awards are the premier event for membership organisations across Europe. Judged by top industry leaders, the awards recognise excellence and exceptional achievements by associations in serving and delivering value for their members.
Judges were impressed with EEF’s continued innovations, advancements and developments in the work it does to champion and support the UK manufacturing sector.
The European Association Awards cover a breadth of industries and professionals from across Europe. They recognise individuals, teams and initiatives and highlight excellence in how associations operate and serve their members.
Stephen Phipson CBE, CEO of EEF, the manufacturers’ organisation, said: “We are enormously proud to receive this prestigious award which reaffirms the hard work that we do for our members. UK manufacturing is a vibrant and dynamic industry and central to the UK’s economic prosperity. Our teams across the UK work tirelessly to help our member businesses to compete, innovate and grow.”
|A long period of high inflation pushes wages up||22/02/2018|
ONS figures for the three months to December show an annual nominal increase of 2.5% for regular pay in the whole economy and a 2.7% increase for the manufacturing sector.
These are the highest increases since December and August 2016 respectively. Despite this growth, inflation was 3% in December, so real wages are still in negative territory.
The EEF bulletin is showing the same trend
After a three-month average annual growth of 2.3% registered in December, our Pay Bulletin has registered a 2.4% wage increase in the three months to January. The first month of the year show a 2.5% increase when the single month is considered and it also shows a deep decrease in the number of deferrals and pay freezes. As we suggested last month, several employers were waiting for the start of the year to increase wages.
When talking about wages, manufacturers put internal performances at the top of the list
This month we asked what are the most important factors considered when determining a pay increase. The vast majority of respondents indicated “company performance” as the top factor driving the rise. However, inflation came in second and was selected by two thirds of the respondents when no limitations were in place and by one third when the limit was two answers.
A second question asked was about employer approach to pay reviews and it appears that a very small minority relates wage raises exclusively to individual performances. For the most the approach is on a company-wide scale or a mix of company-scale and individual performance.
Unemployment slightly up and job vacancies still raising
For the first time since August 2016, the unemployment rate increased. It is now 4.4% up from 4.3%. However looking carefully at the data, the increase in the number of unemployed people is for the most related to inactives which have moved to the active side of the working population.
Productivity is up again, but…
Citing what Martin Wolf said during our EEF's Conference: “We won’t be economist, if we were not saying BUT “.
Productivity has been on the rise for the last two quarters with two strong performances, however a lot of this growth is coming from the denominator.
As the graph shows a notable reduction in hours worked boosted productivity. This may actually be just a temporary effect, so even if this improvement is good news, we should wait more than two quarters of (provisional) data to make assumptions on a revived productivity performance and the possibility that this will boost wages even further.
|What happened to trade in 2017||13/02/2018|
The ONS published international trade data for December so this is the right occasion to talk about how trade figures changed in 2017 compared to the previous year, says EEF, the manufacturer's organisation.
Here’s 5 highlights
It was a good year for international trade
I guess you are not surprised by this news.
The high global demand, together with a depreciated Sterling, helped exporters to boost their sales overseas. To put this in numbers, nominal total export trade was up by 11%, whereas imports grew by 9%. As a consequence the trade deficit contracted by 17% and it is currently at a level around £33 billion which is roughly the same level the UK was in 2015.
In volume terms, exports grew by 7.4% in the year with imports growing at a slower pace (4.1%).
Exports in goods ran fast, but the deficit is still widening
Talking about trade in goods, UK exporters were able to sell much more compared to last year with nominal export in goods expanding by 13%.
However, since imports in goods are at an extremely high level in absolute values, an import growth of 10% had as a consequence an expansion of the goods trade deficit.
As said above, the total trade deficit narrowed in 2017 and this was thanks to the service sector which was able to expand its trade surplus by 10%, which was the same growth reached in 2016.
Well we said that manufacturing was doing great thanks to global markets…
We have also said so many times that this was an export story and the numbers are confirming that. Exports in manufactures grew by more than 10% and the relative trade balance slightly narrowed for the first time since 2011. Export growth in both semi- and finished manufactured goods was particularly high, however only finished manufactures had a hefty trade deficit reduction (-6%).
Looking at the chart for the top 30 commodity by export, the ranking is broadly the same with mechanical machinery at the top with a share of total UK exports equal to 14% gaining 0.5% from 2016. Second place is reserved to cars with a share slightly declining from 10.1% to 9.5%. Electrical equipment is confirmed third at 8.4% which is the same level reported in 2016.
In the past we said that the geography matters, well… even more if you are able to trade freely
As I said in a previous blog, trade is mainly moved by two forces: the size of your trading partner’s economy and geography. 2017 data confirmed that this is the case. Updating what was reported in 2016, the top trading partner in 2017 was clearly the European Union. In 2017 the share of total exports to the EU was up from 48.2% to 48.8% and the share of imports went slightly down from 55.3% to 54.6%.
When countries are considered, not surprisingly our top trade partner is Germany followed by the US, and the Netherlands (the Rotterdam effect is one of the reason why this country is so close to the top. We discuss this in our Chemical Bulletin).
In the ranking for the top 10 trading partners, only China and the US are not part of the European Economic Area. This confirms once more how geography and economy size are driving trade.
And again, the case of Ireland
The Irish Republic is clearly our top trading partner if we “normalize” trade numbers using an adjustment factor such as GDP or population. The country has a population of roughly 4.79 million people which is 0.06% of world population but it is the seventh top UK trade partner with a total trade of more than £34 billion which is a share equal to 2.7% of the total.
Putting this in perspective, the UK trades with Ireland more than it trades with India, Indonesia, Brazil, Pakistan, Nigeria, Russia, and Mexico. All these countries have a population way over 100 million people and when summed together they count for 32% of the total world population.
In a modern economy it is unthinkable to domestically produce every single good or service needed and trading with your neighbour is much easier than trading with anyone else.
The future trade agreement with the EU should definitely keep that in mind.
|Manufacturing celebrates its stars||15/02/2018|
Dynamic manufacturers and talented apprentices from across the UK were recognised as national manufacturing champions at the EEF Future Manufacturing Awards held in London recently.
The biggest winner on the night was Weir Minerals Europe, which scooped the Winner of Winners award, a title awarded to the most outstanding company amongst all the category winners.
The firm, a Todmorden-based manufacturer of wear resistant products, took gold in the Health and Safety Award for the manufacturer that has achieved the most impressive or innovative improvements in the health and safety culture of their workplace. Judges were impressed with their use of employee engagement through their risk assessment process which led to a reduction in muscular skeletal issues in a demanding work environment.
Judges were also won over by Jessica Stone, a first year apprentice at Airbus, who was crowned Outstanding Apprentice of the Year. She was named the winner after impressing judges with her work as an apprentice ambassador and the way she took herself outside her comfort zone to develop her skills.
Also on the podium was Rebecca Luck, a first year apprentice at Domino UK. Rebecca was crowned Outstanding Business Apprentice of the Year after impressing judges with her passionate presentations during the selection stage and her ambitious career plan.
Winners were selected by a panel of judges drawn from business leaders, industry experts and academics .
Other award winners announced on the night were:
Leadership: Edward Naylor, Naylor Industries
Developing People: Liberty Pressing Solutions Coventry
Environmental Achievement: The Wrigley Company
Partnerships: Hargreaves Ductwork
Innovation: Millers Oils
For more information about the awards visit: www.eef.org.uk/awards/.