Manufacturing sits in a tight spot. Skills shortages are the top barrier to growth for 75% of manufacturers, ahead of recruitment at 36% and talent retention at 32%, according to Barclays Corporate's research on the UK manufacturing skills shortage. That pressure is measurable in output too.
In 2025 there were 55,000 unfilled long-term vacancies across UK manufacturing, costing the economy around £6bn in lost output every year, Make UK's Industrial Strategy Skills Commission Report 2025 found. It's a sizeable gap, and it holds back the plans employers most want to deliver.
The wider labour market is cautious rather than falling. The Low Pay Commission Report 2025 describes conditions as 'low hire, low fire', with weaker recruitment but only slight increases in redundancies and vacancies below pre-pandemic levels. Manufacturers are hiring carefully, and each hire carries more weight as a result.
Two forces stand out: leadership capability and the skills needed to modernise. On the technology side, 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, per Make UK's report on AI, skills and the future of UK manufacturing. Managers who can lead change are central to closing that gap.
Entry-level engineering hiring is under strain too. GOV.UK's snapshot of entry-level hiring in the UK shows engineering entry-level hiring at -19% against senior hiring at -10%, a nine percentage-point gap. Fewer junior openings today can thin the pipeline of tomorrow's supervisors and managers, which makes capable leaders harder to grow from within.
There's a domestic-talent angle worth noting. For the engineering profession, the vast majority of new hires come from the resident labour force, indicating low reliance on international recruitment, according to GOV.UK's review of professionals in IT and engineering. That means UK manufacturers are largely competing for the same home-grown management and technical talent.
Start with the outcome, not the job title. Define what a strong manager needs to deliver: safe, productive teams, smoother shifts and the confidence to adopt new tools. With more than half of manufacturers naming skills shortages as the main barrier to AI adoption in Make UK's research, leadership that can bring people through change is a practical priority, not a nice-to-have.
Widen the pool and move quickly. In a 'low hire, low fire' market as described by the Low Pay Commission, strong managers rarely stay available for long. Clear role scopes, prompt interviews and honest conversations about progression all help. Given the thin junior pipeline shown in GOV.UK's entry-level snapshot, it's also worth planning how you'll develop future team leaders, not just fill today's gap.
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