Where is all the Engineering talent? Skills gaps and the significant lack of Engineers

A hot topic of conversation, and a growing challenge for businesses across all industry sectors is skills gaps. Skills gaps and talent shortages are prevalent in all areas, with significant demand in core roles. One of the business functions we’ve seen a huge spike in demand in recent months is – Engineers. This is across several areas including construction, mining, building equipment, technology and automation.

According to a research study carried out by Stonehaven in 2023, by 2030 we will experience a shortfall of one million engineers. This is a global issue, with the Japanese Ministry of Economy predicting a deficit of over 700,000 engineers by 2030.

In this article we explore the reasons for significant skills gaps within engineering, what needs to be done and insight from senior leaders within hiring.

Why are talent pools of Engineers limited?

Demand higher than supply

With skills gaps prevalent in all areas, the skill set of Engineers is in demand across all industry sectors, a skills first hiring approaches mean that engineering talent is sought after by businesses, even if they don’t have specific industry experience. With evolving technology, digital developments and large-scale global projects, this is having a significant impact on the demand for Engineers and there simply isn’t enough talent at a lower level, to ensure there are experienced Engineers at mid and senior levels.

Education to real world application

On top of this, there are some objections with the education system for Engineering programs, highlighting that some academic routes don’t equip Engineers with the skills and knowledge needed to be an Engineer in the current climate. Ultimately, this is then leading to upskilling and further training as some of Engineering talent is unable to deliver on what is needed to be effective and add value in their role.

In a study by the Boston Consulting Group, each year the US will need around 400,000 new engineers however due to lack of relevant skills being present in next generation engineers, nearly 1 in 3 engineering roles will not be filled each year. This reiterates the disconnect between engineering educational programs and real-life application.

Issues with training and upskilling capabilities

While technical skills and knowledge is also having an impact on real world application, some of the larger skills gaps are within soft skills. Soft skills are essential for engineering professionals to allow them to manage projects effectively, collaborate, delegate and navigate complex scenarios. Soft skills of focus include teamwork, problem solving, communication and active listening.

When engineers need to upskill, it’s difficult for them to access relevant training as there are many companies who do not invest in learning and development either through lack of resource, or training being less of a priority. A report by Deloitte highlighted only 42% of companies offered technical skills training to their engineering workforce.

Aging workforces

Another factor impacting the skills gaps within engineering is an aging workforce, with a large proportion of engineers approaching retirement age, losing a talent pool of great experience and sudden spike in the demand of engineers needed. The World Economic Forum estimates that up to 50% of the workforce will need upskilling within the next year due to loss of knowledge from a huge number of engineers reaching retirement age.

This factor alone creates a greater skills gap, increased training needs to be passed over to more junior engineers in the absence of those experienced hires retiring and with the lack of engineers coming through early stages of their career, there simply isn’t enough talent to keep up with the demand.

Diversity and inclusion

The engineering talent pool has historically been heavily dominated my males, which has resulted in much lower numbers of women entering the field. There is a distinct lack of female talent in engineering, with women making up only 14% of the workforce and only 13% of engineering talent coming from underrepresented racial and ethnic groups.

How to attract top engineering talent and combat skills gaps

Facilitate hybrid working models

While there may be some limitations to hybrid working for some engineers dependent on the type of role, the location and the projects they work on, some balance can be found with hybrid working models and greater flexibility to attract engineering talent.

Offering engineers the opportunity to strike a healthier balance of work and personal lives will help engage and attract, while also reaping benefits with increased productivity. Offering hybrid, or remote opportunities can also widen the talent pool available to you by removing any geographical limitations. This instantly opens up more skilled and diverse talent by considering hybrid working practices where possible.

Invest in your training and development function

As highlighted earlier in this article, there is a disconnect between engineering skills through education, and application in a job setting, along with other skills gaps presenting issues for both businesses and individuals. Investing in upskilling and training functions within a business has a positive impact on both talent attraction and retention. 76% of employees state they are more likely to remain with a business long term if they offer continuous learning and development – LinkedIn.

When a business has a robust training and development function, it highlights to potential (and existing) employees how committed they are to the development and career progression of employees, this can be a huge driving factor when looking to take on a new role.

Develop your employer brand

A positive and engaging employer brand significantly contributes to talent attraction. According to LinkedIn, a strong employer brand can lead to a 50% decrease in the cost per hire, and can also reduce the time to hire by up to 50%.

The perception of your business across the market can have a huge impact on your business success with talent attraction. Companies with a positive employer brand receive twice as many applications as those with negative brand perceptions – LinkedIn.

By investing in the development of your employer brand, you’re creating a desirable and attractive workplace for potential hires, ultimately putting you in a stronger position to stand out from your competitors in an authentic and engaging way. With a saturated job market, and a shortage of engineering talent, a positive employer brand can help attract both active and passive candidates who feel aligned with the brand, company values and culture.

Collaborate with educational settings

To attract engineering talent at all levels and to ensure there is a constant flow of new talent joining the engineering function, collaboration with educational settings is key for businesses and can be done in several ways.

Gaining presence and exposure for your business at colleges and universities can be done through existing engineers delivering key note speaker sessions in workshops, seminars or lecture’s. According to National Society of Professional Engineers, this is a great way to educate students on the practical applications of their studies and ignite interest in the business.

Getting involved in mentorship problems and project based learning helps students gain deeper insights into the industry, potential career paths and learn more about businesses that recruit for engineering positions.

Ensure diversity and inclusion is a focus for the business

It’s important for organisations to create a diverse and inclusive environment, but also to consider this as part of the hiring process to ensure businesses can successfully attract a diverse talent pool.

Engineering is already an area heavily dominated by men and it’s important for businesses to establish ways to attract more women and diversity to the business, this will open up the talent pool and give businesses access to more skilled engineering talent.

As part of this process, businesses need to review their workplace, environment, benefits packages and family policies to ensure they appeal to women. Review the brand, website and external communications to ensure females within the business are represented and visible, this will help other women feel aligned to the business. Consider how diverse the hiring process is by looking at diversity within leadership and the wider business, diversity on a hiring panel and internal communications on diversity and inclusion.

At CSG Talent, we’re supporting clients globally to attract the best talent within engineering to ensure they remain competitive and secure Engineers despite the significant skills gaps.