The UK engineering sector is currently struggling with significant challenges in retaining its workforce, facing a potential crisis fueled by an aging demographic, skills gaps, and evolving employee expectations. To navigate this landscape, engineering businesses need to proactively implement strategies focused on recruitment, retention, and reskilling.
Challenges Facing Engineering Sector Employers
Aging Workforce and Skills Gap
A substantial portion of the UK’s engineering workforce is nearing retirement, leading to a widening skills gap. ManpowerGroup reports that as many as 20% of the current engineering workforce is expected to retire within the next five years, taking with them a vast pool of knowledge and experience. This outflow of seasoned professionals coincides with a projected need for up to 1 million more engineers by 2030 and over 1.9 million new STEM professionals by 2035 just to meet current demand. Additionally, the green economy alone will require an extra 59,000 new engineers annually.
Current data is already indicating that 14.7% of engineering workers are aged over 60, an increase from 11.6% in previous years, as highlighted by Lanes Group Careers. This trend is particularly pronounced in regions like the South East, where 23.2% of workers are over 60, compared to the national average of 12.4% according to the ECITB Workforce Census (Lanes Group Careers).
Changing Expectations of a New Generation
Younger generations of engineers are reshaping workplace priorities, placing a greater emphasis on aspects like work-life balance, flexible working arrangements, and a strong company culture. The 2025 Talent Trends report by Michael Page reveals that only 12% of UK professionals in engineering and manufacturing cite salary as their top reason for seeking a new opportunity. Instead, there’s a growing emphasis on trust in leadership, well-being, and purpose-driven work (Institute of Engineering & Technology). This report also indicates a disconnect: while nearly half (49%) of engineering and manufacturing professionals globally, and 39% in the UK, are actively looking for new roles, only 38% of UK workers in this sector feel they can be their authentic selves at work (Institute of Engineering & Technology). This misalignment underscores the need for more inclusive and supportive workplaces.
Competition for Talent
Engineering talent is in high demand, especially in fast-growing sectors like renewable energy and digital infrastructure. It intensifies the competition for skilled professionals. But the industry continues to suffer from a “diversity deficit.” Women make up just 15.7% of the engineering and technology workforce, down from 16.5% in 2022. Ethnic minority representation also lags behind national workforce averages (Lanes Group Careers).
Outdated perceptions of engineering as a male-dominated or inflexible field, combined with declining interest in STEM subjects, further narrow the pipeline of future talent.
The High Cost of Employee Turnover
Replacing an engineer is an expensive endeavour, encompassing recruitment fees, training costs, and lost productivity during the handover period. This makes effective retention strategies not only a people-first initiative but a business-critical one.
Strategic Solutions: How to Retain Top Engineering Talent
To overcome these challenges, engineering companies must align talent management with business goals and employee expectations. Here are key strategies that can make a lasting impact:
Align Recruitment and Retention with Long-Term Goals
Invest in a compelling Employer Value Proposition (EVP) that highlights clear career paths, growth opportunities, and strong Diversity, Equity, Inclusion, and Belonging (DEIB) principles. Positioning your company as a long-term career destination can help attract and retain purpose-driven talent. For early-career engineers, structured onboarding is also essential to encourage engagement from day one.
Embrace Skills-Based Hiring and Career Development
Conduct regular skills audits to identify workforce gaps and design targeted recruitment or reskilling programmes. Upskilling your existing team can not only close those gaps but also provide meaningful development opportunities—something highly valued by the modern workforce.
Invest in Employee Well-being and Team Culture
Creating inclusive environments where people feel they belong is critical to improving both recruitment and retention. This includes actively addressing underrepresentation and eliminating unconscious bias in hiring and promotion processes.
Flexible work options, such as remote or hybrid models, job sharing, and flexible hours, can help meet employees where they are and promote better work-life balance.
Prioritise Well-being and Team Connection
Supporting employee mental health and well-being isn’t optional; it’s a necessity. Invest in wellness initiatives, comprehensive leave policies, and strong retirement plans. At the same time, build a culture of connection through collaboration, team-building events, and cross-functional projects. A positive team environment can go a long way.
Competitive Compensation and Benefits
While salary is no longer the sole motivator, offering competitive salaries and benefits packages remains crucial for attracting and retaining top talent in a competitive market.
By proactively addressing these multifaceted challenges and implementing effective retention strategies, the UK engineering sector can work towards mitigating the potential workforce crisis and ensuring a sustainable future.