UK space sector skills shortage: How can talent be retained?

The UK space sector's rapid growth is being hindered by an inability to retain talent. We look at what space companies can do to address recruitment challenges.

The current situation

The latest space sector income report shows that the growth of the UK space sector is a rapid success story – space sector income grew by almost £1billion into 2021 and the number of space organisations has grown by nearly 300. The sector growth is projected to keep climbing over the next five years.

Employment in this sector is consequentially up, with almost 1,800 more jobs. The successful growth in this sector has however outpaced the personnel available. The Space Sector Skills Survey 2023 shows a critical skills shortage with companies reporting difficulties with recruitment, and retention issues that are inhibiting company growth, productivity, and quality.

The UK Space Agency is taking steps to address this; investing £15million through its Inspiration Programme to deliver education, skills, and outreach interventions over the next two years. Whilst useful to build pipeline of personnel this will not address the immediate needs of the sector.

The Skills Survey shows that 80% of companies faced recruitment difficulties. Two thirds (72%) of roles were difficult or very difficult to recruit for. The average role took a median of 10 weeks to hire for.

The increase in roles without a commensurate increase in skilled personnel has led to poaching within the sector. Forty-five percent of companies reported difficulties retaining their space staff in the past 12 months with the two most commonly cited causes of poor retention being poaching of staff by other space companies (57%) and low salaries (48%). The main impact of poor retention has been to increase the workload for remaining staff, with knock-on effects on morale.

The overall effect is that nearly every space organisation (95%) has experienced skills-related challenges in the last 12 months.

What can be done to help retain employees?

 Attracting the right staff and integrating them into your business is the subject of a future article. Successful recruitment however is just the start of the process.

The costs and difficulty of recruitment, not to mention of training new starters and the loss of institutional knowledge, make the retention of staff fundamental. Business realities mean constantly increasing wages is not a realistic option for retention planning. There are other cost-effective methods of supporting and valuing employees.

Support with accommodation costs

Many space businesses are based in beautiful areas of the UK that come with high accommodation costs. This issue is not unique to the space sector; employers from all sectors based in expensive areas have reported that housing issues adversely affect recruitment and retention.

One option is for employers to provide accommodation for their staff or offer a relocation package. Either of these measures could involve tax, National Insurance, and reporting obligations.

Employers must fill in form P11D and, where appropriate, pay Class 1A National Insurance on the value of the accommodation benefit that they are providing.

An alternative to help employees that is effective and simple is a rental deposit loan scheme. Under this scheme employees can apply to their employer for an interest-free loan of up to one month's pay when they are moving into a new rental property. Payments are then deducted from the employee's wages every month for the next 12 months.

Starbucks and CBI both offered this type of loan scheme. Reports from both companies suggested that the scheme removed some of the stress from the moving process from their employees and improved their loyalty.

Employers could also consider offering more informal support, such as paid leave for moving days and flexible working. Loans for travel costs if employees will commute is another option. Employers could provide an intranet service for employees seeking accommodation or tenants/flatmates.

Providing subsidised access to mortgage advisers and even agreeing preferential lending terms for mortgages with mortgage providers are all options to take into consideration.

Introducing retention and loyalty programmes

To ensure employees know their loyalty is valued there are several ways to reward existing staff. One common method is an extra day's leave for each year of service, up to a set maximum. Staff discounts can be negotiated at gyms, local shops, and with companies set up to provide employee reward programmes.

For longer term rewards a paid sabbatical after a set number of years can be very motivating, offering employees the chance to have a meaningful experience not possible on normal leave days. This also offers a significant bonus to long standing staff members who have already gained all the extra annual leave days possible.

Sponsorship through qualifications can be used to reward staff and ensure they stay for a set amount of time post qualification although the exact details of the tie-in need careful planning to ensure this is seen as a bonus, and not a set of handcuffs! Foot Anstey has experience of drafting these agreements in a way that builds loyalty.

Prioritising employee satisfaction

Where the space sector has an edge in satisfaction is creating a sense of clear purpose and mission. The Space Skills Alliance research showed that the two main motivations people had for joining the space sector were "interesting work" (44%) and "I like space" (42%). Virtually nobody (<1%) joined the space sector because the pay was good.

Whilst the good news is that there is a pool of motivated individuals interested in space, interest alone is not enough to keep people in the sector. As employers are constrained in their choices by responsibilities (such as parenting and mortgage payments) they may place greater value on financial rewards and job security.

Building a positive culture increases staff satisfaction and increases the likelihood employees will want to remain with an employer. Foot Ansteys People Lab specialises in training at all levels to create a positive culture and look after your workforce.

Where people are promoted due to their technical expertise, but this comes with new management responsibilities this type of training is essential to assist them with their people management skills.

Beyond the risk of tribunal claims and reputational risk the risk of low-level staff dissatisfaction translating into expensive turnover of staff is one that no business working in this sector can afford to ignore.

Investing in your leaders goes hand in hand with protecting your business. Whatever you do to maximise staff protection will also reduce your exposure to legal claims and Foot Anstey employment programmes reduce legal claims to below 50% of the national average.

How we can help

Finding, attracting, and then retaining the right staff is mission critical. Foot Anstey has experience in successfully supporting businesses in this sector and beyond to do just that.

If considering rewards such as sabbaticals and paid training ensure that you seek advice on creating formal policies covering legal issues such as holiday pay accrual, working time and rest breaks and Equality Act considerations.

With significant experience across HR and commercial issues that organisations commonly face, we can take an in-depth holistic view on your space sector business, your markets and the environments you operate in.

Let our legal insight ensure your people strategy is a key driver in your business success.