Demand is strong, but the talent is hard to find. UK manufacturing had 55,000 unfilled long-term vacancies in 2025, and those gaps cost the economy an estimated £6bn in lost output every year, according to Make UK's Industrial Strategy Skills Commission Report 2025. That's a lot of work waiting for the right people.
Skills shortages sit at the top of the list of barriers. Barclays Corporate's analysis of skills shortages in UK manufacturing found that 75% of manufacturers name skills shortages as a top barrier to growth, followed by recruitment at 36% and talent retention at 32%. So the challenge isn't demand. It's finding, hiring and keeping people.
Defence is a bright spot in this picture. Ministry of Defence expenditure with industry supported 272,000 direct jobs in 2023/24, an increase of 11% on the previous financial year, according to the MOD supported employment estimates for 2023/24. Much of that work runs through manufacturing supply chains, from shipyards to aerospace to electronics.
Defence has become an active employer. The GOV.UK report on the defence sector's contribution to the UK economy notes that surveyed recruitment in the sector grew by 17.8% in 2022, and describes defence as an attractive employer. That growth reaches across production lines, quality assurance, design and skilled trades.
The roles span the full career ladder. Long-lifecycle programmes in shipbuilding, aerospace and land systems need welders, machinists, assembly technicians, systems engineers, project managers and quality specialists. Because these programmes run for years, they can offer something rare: stable, long-term routes that let people train, progress and specialise rather than move on quickly.
Apprenticeships are widening the front door. Across the wider technology economy, apprenticeships have risen from 3% of AI hires in 2020 to 19% in 2025, according to the DSIT AI Labour Market Survey 2025. Manufacturing employers are using the same approach, growing their own talent through structured schemes rather than competing for a small pool of ready-made specialists.
There's an added pull. As entry-level opportunities tighten in parts of the tech economy, with a 30% drop in UK entry-level job postings since ChatGPT launched, reported by techUK's analysis of entry-level and graduate jobs, defence-backed manufacturing offers a practical, hands-on route into a durable career for people starting out.
Start by widening who you consider. With skills shortages this deep, hiring only for a finished skill set narrows the field too far. Look for people with the right aptitude and attitude, then train the specifics. Apprenticeships, upskilling and clear progression paths turn scarce talent into a pipeline you control.
Move quickly and keep candidates informed. When 36% of manufacturers say recruitment itself is a barrier to growth, per Barclays Corporate, a slow or silent process loses good people to faster employers. Set out the role, the pay and the progression early, and keep the conversation moving.
Then plan for retention from day one. Talent retention is a barrier for 32% of manufacturers, so the way you onboard, mentor and develop new hires matters as much as how you attract them. Defence programmes help here, because their length lets you offer a genuine future, not just a job.
AI and automation are part of the answer, but only alongside people. Over 50% of manufacturers cite skills shortages as the main barrier to AI adoption, and only 2% say AI is widely embedded across their operations, according to Make UK's report on AI, skills and the future of UK manufacturing. Hiring and training the right people is what lets new technology actually pay off.
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