Bridging the Skills Gap: Tackling Product Liability Risks in UK Manufacturing

The UK manufacturing sector is grappling with a significant skills shortage, exacerbated by economic and policy changes over the past decade. Whilst research suggests there has been some acute improvement, the skills gap remains a key concern for manufacturers. In this article, Simon Key and Dominic Simon explore these concerns, how the skills shortage could expose manufacturers to product liability claims, and current initiatives to address the skills shortage.

The Current State of the Skills Shortage

Manufacturers in the UK face a glaring shortage of skilled workers. In late 2024, Make UK estimated there were approximately 58,000 unfilled vacancies. This persistent issue threatens the sector’s growth and competitiveness. The decline in the talent pipeline is alarming, with apprentice starts down by 42% since the introduction of the Apprenticeship Levy seven years ago. Additionally, T-levels (technical-based qualifications in England), designed to provide much-needed technical skills, have not yet achieved the required uptake to make a significant impact.

The broader economic landscape, marked by uncertainties such as Brexit and the COVID-19 pandemic, has further complicated the skills shortage. Businesses are cautious about investing in training and development amidst economic instability. Additionally, the National Minimum Wage and National Insurance contributions are set to increase from April 2025. Consequently, alongside a perceived lack of adequately skilled entry-level employees, the costs of hiring them is increasing, placing additional strain on manufacturers.

Product Liability Risks

The skills shortage in the UK manufacturing sector not only hampers growth and competitiveness but also significantly increases the risk of product liability claims and disputes. This issue arises from several interconnected factors.

A lack of skilled workers can lead to an increase in product defects. Skilled workers possess the expertise to identify and rectify potential issues during the manufacturing process. Without this expertise, defects are more likely to occur, resulting in products that do not meet quality standards and potentially causing harm to consumers.

Additionally, effective quality control is crucial in manufacturing to ensure that products meet safety and performance standards; however, with fewer skilled workers, maintaining rigorous quality control becomes more challenging. This can lead to more issues slipping through the cracks, increasing the likelihood of defective products reaching the market.

Experienced supervisors also play a vital role in overseeing production processes and ensuring adherence to quality standards; however, the skills shortage can create a gap in supervision, as there may not be enough qualified individuals to step into these roles. This succession issue can result in inadequate oversight, further exacerbating the risk of product defects.

These issues mean that the remaining workforce can become overburdened, leading to fatigue and errors, resulting in products that are more prone to defects and failures.

Finally, with businesses cautious about investing in training amid economic instability, the development of new skills within the workforce is hindered. This lack of ongoing training means that workers may not be up to date with the latest manufacturing techniques and safety protocols, increasing the risk of product-related issues.

Make UK’s Industrial Strategy Skills Commission

In response to the skills shortage, Make UK launched the Industrial Strategy Skills Commission last year. The Commission aims to address the growing skills deficit in manufacturing and engineering by bringing together experts from education, training, and industry. Co-chaired by Robert Halfon and Tom Watson, the Commission seeks to identify key priorities for government action and highlight emerging issues that require immediate attention. The Commission’s approach includes gathering evidence, conducting on-site visits, and forming an advisory group comprising leading education experts, industry professionals, and policymakers.

Government Initiatives

The UK Government has recognised the severity of the skills shortage and has implemented several initiatives to address the issue. These include the Skills for Jobs White Paper, the Lifetime Skills Guarantee, investment in apprenticeships, expanding T-levels, and Sector-Based Work Academy Programmes (commonly referred to as SWAPs). These initiatives aim to transform further education and training, provide adults with new qualifications and skills, and help unemployed individuals gain the skills needed to secure jobs in high-demand sectors.

Latest Research Findings

Recent research by ManpowerGroup indicates that the UK may have passed the peak of its talent shortage, with a slight reduction in the number of employers reporting difficulty in filling roles. However, 76% of employers still face challenges due to a lack of skilled talent, down from 80% in 2024. This suggests that while there are signs of improvement, the skills gap remains a significant concern.

Key findings from the research include sector-specific shortages, regional variations, and employer strategies to address the skills gap. Employers are adopting various strategies, including upskilling and reskilling existing employees, seeking new talent pools, and leveraging technology to enhance productivity.

Commentary

The skills shortage in UK manufacturing is a multifaceted issue that demands coordinated efforts from all stakeholders. While recent research indicates some improvement, the challenge remains substantial. The shortage not only threatens growth and competitiveness but also heightens the risk of product liability claims due to increased product defects, quality control challenges and supervision gaps.

Make UK’s Industrial Strategy Skills Commission is pivotal in addressing these root causes. By enhancing apprenticeship programs, promoting technical education, and investing in training, the Commission aims to build a skilled workforce capable of maintaining high-quality standards. Leveraging technology and fostering industry-government collaboration are also crucial steps in mitigating the risks associated with the skills shortage.

Through these concerted efforts, it is hoped that the UK can develop a robust talent pipeline that supports the growth, innovation, and safety of its manufacturing sector, ultimately reducing the incidence of product liability claims and ensuring a competitive edge in the global market.