Engineering companies are “bracing themselves for a skills shortage among their workforce”, as they look to take on more staff in the future, according to the latest quarterly Business Barometer from asset-finance group Close Brothers (www.closebrothers.com).

The survey of SME owners and senior management found that 68% of the engineering businesses surveyed think there is a skills gap in their sector, although 26% of those surveyed believe they will not actually have any problems recruiting adequately skilled staff in the future. Of those firms that believe that there is a skills shortage, 40% have invested in staff training to help fill the skills gap but think that their employees still lack the skills required.

Meanwhile, 44% have considered training, but have decided that they cannot afford it, with a further 16% believing that training for existing staff members is not the right way forward.

Steve Gee, managing director of the Industrial Equipment Division at Close Brothers Asset Finance, said: “It is encouraging that 84% of firms in the engineering sector have either already invested in training or have recognised it as the solution to the skills-gap issue. However, it’s important to understand that there are complex issues at play in the sector, with businesses at the smaller end of the market feeling the problem most acutely.

A total of 71% of SMEs with a turnover of less than £500,000 tell us that they are facing a skills shortage. Furthermore, while it is commonly understood that staff training can help firms retain their best employees, this is not always possible — because of cost pressures. When competing for a limited pool of talent, it’s often the smaller firms that lose out, because they are unable to offer the same salaries, benefits and working conditions as the larger players. The most positive aspect of these results is that SMEs across the board understand the importance of training to not only improve their own prospects but also retain staff and safeguard jobs in this key industry.

“As a business, we have a long-established commitment to supporting SMEs. With the support of the University of Sheffield AMRC Training Centre and the Manufacturing Technologies Association, we launched the Close Brothers SME Apprentice Programme in 2015. This helps SMEs to recruit and train a new generation of advanced engineering workers.”