A report today says that by 2020 manufacturing firms will need nearly one million replacement workers as present-day graduates fail to match up to industry needs.

According to the report – Improving the Quality and Quantity of Graduate-level Skills – by EEF, the manufacturers’ organisation, the demand comes when home-grown skills are already in short supply and companies face growing difficulty in recruiting from outside of Europe.

The report forecasts that in the next three years alone, 66 per cent of manufacturers plan to recruit an engineering graduate. More than a quarter of firms will also be on the recruitment trail for those with business and administration degrees, while 20 per cent will be taking on people with a technology degree. But EEF warns that firms’ plans could be scuppered by the limited number of students taking science, technology, engineering and mathematics, coupled with the number of graduates lacking industry experience and manufacturing knowledge.

As a result, 80 per cent of manufacturers want to see higher education establishments make improving the employability of students a priority, while a similar proportion want courses to be designed to meet industry needs.

Almost three-quarters of companies want to see universities build stronger relationships with employers which they say is crucial for students to gain valuable work experience and develop the skills and knowledge which employers say are currently lacking.

Sixty-three per cent of firms think that increasing the number of placements and internship opportunities at universities will increase the number of STEM students – and many see European graduates as being more ‘rounded’ and ‘ready for the world of work’ having spent more time in industry than their UK peers.

Andy Tuscher, EEF Yorkshire regional director, said: “With UK manufacturing continuing to expand and grow, access to the right skills in the right numbers is ever more important.

“Businesses are engaging with universities, sponsoring students and hiring graduates, but we need action now if we are to meet expected demand. Decisive steps must be taken if we do not want to see the manufacturing sector increasingly looking outside the UK for talent for fear of otherwise running out of steam.

“Boosting the pool of talented, skilled and employable young people in the UK is a win-win for the young people themselves, for manufacturers and the wider economy.”