Blogs

Derek Bishop

Director

Manufacturing culture

Date added: 07th Nov 2014
Category: Organisational Culture Change

If you hold to the traditional view that the UK’s manufacturing sector has been in decline since the 1970s then it might be time to think again.  Figures released in October from the Office for National Statistics (ONS) reveal that far from declining, UK manufacturing output today is actually higher than it was some 40 years ago and continues to improve across a broad base.

So why is the perception so different from the reality? We could write a book on the subject but will stick to three key factors which may well have obscured the underlying upward trend.  Firstly, high profile news stories about the closure of large businesses such as steel works or car plants tend to sit in the public consciousness so even when the sector is awash with new and growing businesses the news-worthy stories tend to stick around.

Secondly, it is true that manufacturing has grown, but not as much as some other sectors of the economy.  This means that the manufacturing share of GDP has shrunk in percentage terms and this has lead to the perception of failure.  Thirdly, and perhaps most importantly, whilst manufacturing output has grown, the number of jobs in the sector has fallen by 60% (1979-2013).

This last reason is the sort of good news/bad news story which has implications not only for manufacturing but across the wider business sphere.  How has the manufacturing sector continued to grow when employee numbers have fallen so significantly?  The ONS report highlights a number of factors including:

  • Investing in a more highly skilled workforce
  • Improvement in information technology
  • A wider global marketplace
  • Greater investment in R&D

Interestingly, although UK manufacturing accounts for just 10% of GDP it now accounts for 70% of research and development.  In effect, by investing in skilled employees and by leveraging technological improvements the sector has transformed itself into one which can compete on the world stage.  So much so that the smaller players who started up in the recession are now starting to grow and manufacturing is being seen as a future growth area for the UK as well as a way of re-balancing the economy across the country.

But this level of growth allied to increasingly skilled employees brings its own challenges.  Small start-up businesses have to keep an eye on their entrepreneurial culture as they grow and manufacturers large and small have to constantly find a way to be innovative; to continue to do more with less and still provide exceptional products which meet customer expectations.  Partly this means paying close attention to employee engagement.

Those who seek to employ the best need to attract and retain the best.  This means looking to a culture which respects and engages the best in the values, beliefs and behaviours of the organisation.  When making the most of technological improvements means being innovative then high levels of engagement are crucial to transform the culture into one which supports innovation.

There is one other factor which comes into play when looking at employee engagement in the manufacturing sector and that is the age-range of employees.  The ONS study reveals that 30% of employees are aged over 50 and that this has been offset by a fall in workers aged 16-29.  When these older workers retire the sector has to be able to compete to attract the brightest talents to replace them.  Businesses which are seen to have strong cultures, which actively engage employees have the best chance to attract those younger workers who will help them to drive manufacturing into the future.

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