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Engineering sector could face £9.5bn retention gap

Bam Nuttall has become the latest contractor to pledge to officially register its technical workforce, as part of a campaign by EngTechNow.

The contractor has signed a charter with the campaign group, committing to ensuring its technical apprentices are set on a path towards professional qualifications.

Other firms to have already signed personalised charters with EngTechNow include Amey, Balfour Beatty and Carillion.

The move comes as analysis by the Association for Consultancy & Engineering and EngTechNow showed that engineering firms could lose up to £9.5bn over the next decade because of poor planning around the retention of technical staff.

Retention gap definition

The retention gap is the term used for the productivity fallout that happens when people leave a business and new ones have to be brought in. When this personnel change occurs there is a period when the outgoing worker’s productivity diminishes due to time being monopolised in handovers and a general winding-down process. Unfortunately, productivity can’t instantly resume when a new person is brought in as incoming employees take a long time to adjust to their new environment and role.

The research said the cost of losing and replacing staff could be lowered if companies followed a three-point plan, including ensuring that staff are “promotion-ready”.

If companies took these steps, researchers argued they could halve the estimated £9.5bn loss in productivity.

ACE chief executive Nelson Ogunshakin said: “There are an estimated 1.8m engineering roles to fill over a 10-year period and our figures demonstrate why industry must benchmark itself and adopt best practice. 

“Engineering talent is responsible for delivering so much of our economy, and for achieving so much of government ambitions for the future, that we need to find every opportunity to improve the way we work.”

On Bam Nuttall’s decision to sign the charter, its professional development manager Paul Skerry said: “Bam Nuttall is committed to the professional development of staff and our charter is based on providing equal opportunities for apprentices to graduates within our business.”

The contractor has established an HND Civil Engineering programme at Stephenson College and has set out to deliver 100 newly qualified apprentices over the next four years.

It is hoped the apprentices will become technical members of either the Institution of Civil Engineers or the Chartered Institution of Civil Engineering Surveyors as part of the programme.

Key stats

  • The retention gap for companies varies between £13,491 for salaried partners/other directors & department heads to £2,820 for technicians and trainees.
  • With 1.86m engineering positions to fill over the next decade, the potential cost to companies is between £5.2bn and £9.5bn.
  • By replacing an engineer internally rather than externally, a productivity saving of £2,216 could be made.
  • By reducing the need to replace staff by just 1 per cent a year, a productivity saving of £520m could be made.
  • 73 per cent of staff in the industry will never serve a period of more than five years at a company.

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