Ahead of our annual report, which will be delivered in January 2020, we wanted to share some of the key statistics we’ve seen this year and in 2018 related to employment in the UK automotive industry. We will also dive into the future to predict how the driverless, electric and pooled cars of the future will affect jobs in the industry.
What are the statistics representing employment in the automotive industry?
The automotive industry is a vital part of the UK economy, accounting for more than £82 billion turnover and £20.2 billion value added.
According to SMMT, there are 823,000 people employed across the UK automotive industry. 168,000 people are directly employed in manufacturing, while 41,000 people are employed in UK motorsport – 25,000 of them are engineers. In 2017, the UK had a 7.3% share of direct automotive employment in the EU in total manufacturing.
In 2017/18, 59,000 young people began engineering and manufacturing apprenticeships, and it is predicted that 20,000 new jobs will be created in the UK automotive industry by 2030.
The number of jobs dependent on the automotive sector in 2018 decreased by 1%, with direct employment in automotive manufacturing dropping by 3.5%.
Signatories’ reported total employment declined in 2018 by 3.5% to 108,182 employees on the previous year. The drop was strongly influenced by job cuts at one of the largest signatories to the report. The share of agency workers has dropped too, down from 17.4% in 2017 to 16.6% in 2018. It is highly likely that the uncertainty caused by Brexit has played a significant part in this decline.
The number of women employed by the signatories dropped from 11.8% in 2017 to 11.4% in 2018. Also this year, 20 signatories reported on the age profile of new employees. Out of 13,300 new employees in 2018, 35.6% of new individual companies’ intake was below 30 years of age, 50.1% between 30-50 and 14.3% above 50.
Average employee turnover rate
The UK average employee turnover rate is approximately 15% a year, although this varies drastically between industries. Signatories’ staff turnover has been fluctuating over the years, although never going above 10%. In 2018, staff turnover increased to 9.1% from 8.4% in 2017. This is still relatively low considering the current uncertain economic climate and the 3.5% drop in overall employment. This is evidence that the automotive sector remains an attractive place to work. – SMMT Sustainability Report 2019
In 2018, more than 1,000 new apprentices were taken on which represents a 40% increase on 2017, while 1,600 apprentices recruited in previous years were retained by signatories, up 47% on the year before. In addition, 230 apprentices/trainees moved into permanent employment within their organisations in 2018. – SMMT Sustainability Report 2019
Access to skills and skills development remain significant issues for the automotive sector. Despite high levels of productivity, the sector faces a historic skills gap, which has been challenged further due to the arrival and increasing impact of new and emerging technologies. The pace and extent of this change is already beginning to be reflected in the diverging skills requirements of automotive employers.
The rise of autonomous, connected and electric (ACE) vehicles has created the demand for skills never before needed in the sector, such as cyber security engineers or chemists, but without eradicating the need for the traditional manufacturing skill-set. The Automotive Council’s Skills Working Group continues to strive to determine how government and industry can work together to address these challenges so that the UK can reap the benefits afforded by new technologies. – SMMT Sustainability Report 2019
How is employment in the automotive industry changing?
In April 2019, Morning Future gave their prediction on how employment in the car industry is changing. Their theory suggests the cars of the future, including driverless, electric and pooled, will provide more work to many more people than today.
According to a report by Modis, the new professions created by the cars of the future will require skills that are rare today. New professionals will be needed, like app developers and artificial intelligence specialists to allow the creation of an entire infotainment offer with a vehicle. Computer security experts will be in high demand too, due to the large amount of data we will send by car. Software will be the driving force behind the largest revenue stream.
Just in Europe, the change in production should lead to the creation of over 2 million jobs. The turnover of skills and labour however, could affect employment figures, particularly in the manufacturing sector. Training for specialised mechanics who can solve electric motor failures will be essential – all changes which affect both the development for companies and individuals.
Digitisation and automation across the industry bring myriad benefits though. What the machines can’t do, however, are the tasks which rely on what’s known as the ‘human skill set’. According to the World Economic Forum, the most important skills in 2020 fall under that category and are: complex problem solving, critical thinking and creativity. Throw in some people management and emotional intelligence, and you’re there. So, rather than fearing that automation will render people redundant, they’ll actually be needed more than ever. What will be vital, however, is the upskilling and retraining of existing staff.
Challenges for the future
E-mobility is a massive challenge across the automotive industry. The UK government must act quickly to ensure the country can take advantage of the transition to electric cars and become a centre for the production of vehicles and batteries.
Skoda for example, actively engages students studying wide-ranging subjects in training days to concentrate on e-mobility. During these training days, they involve them in future problems and innovations. In addition to cars, e-mobility also encompasses entire ecosystems, including new products, services, maintenance work and infrastructure construction. Skoda is moving forward to tackle these challenges by attracting today’s young talent, to ensure that it is ready all round for the electrification of vehicles.
The growth of the UK automotive sector and the transition to the next generation of vehicles will require people with new skills and a substantial upskilling of the existing workforce. This requires a coordinated national and local approach through established institutions such as the Institute for Apprenticeships and supporting the development of the new T level qualifications.
If you think electrification will affect your career, research and gain as much information and knowledge as you can in your own time or via your company workplace. Everyone will be working towards the same goal, but give yourself a head start if you’re keen to be a part of the future of the automotive industry.