SOFIAH NICHOLE SALIVIO

News Editor

WorkJam has published research showing that more than half of UK manufacturers have reduced or slowed hiring in the past six months. The survey also found that 76% are using AI in workforce or production operations.

The findings suggest the sector is trying to contain rising costs while dealing with recruitment, retention and regulatory pressure. Of the 142 manufacturing professionals surveyed, 19% said reducing costs was now the industry’s biggest challenge.

Hiring has been one of the clearest pressure points. Some 52% of organisations said they had reduced or slowed recruitment over the past six months, while 24% said rising labour costs and productivity pressures were slowing hiring in skilled production and engineering roles.

Another 23% said they were increasing prices to offset higher costs. At the same time, workforce issues remained prominent, with 16% identifying employee engagement as a leading challenge and 15% citing retention.

The data suggests manufacturers are not only responding to cost inflation but also reshaping labour management decisions. Nearly 40% of respondents said the Employment Rights Bill and wider labour regulations had already forced them to change how they manage their workforce.

Across the wider sample, 67% said current pressures were leading them to rethink how they manage and organise operations. Half said cost control now takes priority over employee experience and workforce enablement.

AI uptake

AI use appears broad but uneven. While more than three-quarters of respondents said their organisation was using AI to support workforce or production operations, only 11% said they had deployed it at scale.

That gap points to limited operational maturity despite strong interest in the technology. Just 7% said their primary reason for investing in AI was to improve the shopfloor experience, with most efforts instead focused on efficiency and productivity.

The results suggest manufacturers are treating AI mainly as a tool to manage output and costs rather than as a direct way to improve day-to-day working conditions for frontline staff. This comes as companies continue to weigh immediate financial constraints against longer-term workforce needs.

Workforce strain

The survey was conducted at Smart Manufacturing Week 2026 and reflects responses from a relatively small but targeted group of industry professionals. Even so, the pattern is consistent: businesses are trying to absorb higher employment costs without losing the experienced staff needed to keep factories running smoothly.

This creates a difficult position for employers in production and engineering, where specialist skills can be hard to replace. Slower recruitment may ease short-term spending, but it also risks adding pressure to existing teams if vacancies remain unfilled.

WorkJam said the findings showed manufacturers were trying to manage cost pressure while maintaining engagement and retention among frontline workers. The company, which sells employee engagement software for frontline sectors, said the results showed spending discipline and workforce support are now being weighed side by side.

Mark Williams, Managing Director, EMEA, at WorkJam, said: “Manufacturers are currently facing difficult business decisions, but as the findings suggest, many also recognise that reducing costs cannot come at the expense of workforce capability.

“Engagement and retention remain high on the agenda because experienced frontline and production employees play a critical role in maintaining productivity and operational performance. Manufacturers now need to invest in technology, such as AI-powered frontline employee engagement platforms, to improve efficiency and simplify operations while continuing to provide managers and frontline teams with the support they need to do their jobs effectively.”

KAREN JOY BACUDO

Finance Editor

Lloyds and Legal & General have passed £1.5 billion in participations through their fund finance co-investment partnership, which has been in place since December 2022.

The partnership combines bank-led origination and structuring from Lloyds with institutional capital from Legal & General to provide finance across a range of fund facilities. The latest figure points to continued demand for short-duration funding in private markets.

Fund finance has grown as private market activity has expanded. Fund managers use these facilities to bridge capital calls and manage cash flows between fundraising cycles, giving sponsors access to liquidity at different stages of a fund’s life.

For banks, such arrangements provide a way to originate deals while bringing in outside pools of capital. For institutional investors, they offer access to short-dated assets that can meet demand for lower-duration exposure.

The partnership also supports Legal & General’s broader short-term alternative finance strategy, which stands at £2 billion. The insurer and asset manager said the model gives it access to a pipeline of investments for clients, including insurers, pension schemes and other institutional investors.

Lloyds said it has developed its offering to financial sponsor clients over several years as market demand has changed. The bank described the structure as part of a broader effort to combine its lending origination with institutional backing to provide larger volumes of financing.

The milestone comes as private markets continue to attract capital and financing needs become more varied. Liquidity facilities have taken on a larger role for sponsors seeking to maintain investment activity while managing the timing gap between investor commitments and cash deployment.

A senior Lloyds executive said the result reflected both the scale of the market and the durability of the relationship with Legal & General.

“Surpassing £1.5bn with L&G reflects both the strength of this partnership and the depth of our experience supporting financial sponsor clients with innovative financing solutions. We have worked closely with clients in this market for many years, evolving our financing solutions as their needs change and supporting them by combining our origination capabilities with institutional capital to deliver funding at scale. This partnership is a strong example of our solutions-led approach and our focus on building long-term, sustainable relationships that support clients across market cycles,” said Jill Wilson, Managing Director, Financial Sponsors, Lloyds.

Legal & General said demand from insurers for shorter-duration assets with strong credit quality had helped support the strategy behind the arrangement.

“This milestone underlines the growing importance of partnerships between banks and institutional investors in supporting the evolution of private markets. By working with Lloyds, we are able to access high-quality, short-duration assets for our clients, where we are seeing particularly strong demand from insurers for low-duration investments with robust credit quality. Structures like this are an important part of how we scale our short-term alternative finance strategy while supporting the financing needs of private market sponsors,” said Matthew Taylor, Head of Alternative Debt, Asset Management, L&G.

The transaction volume suggests co-investment structures of this kind are becoming more established in parts of the private credit and fund finance market, where banks and long-term investors are looking for ways to share risk and extend lending capacity.

Legal & General manages £1.2 trillion in total assets, about 43% of which is held internationally. Lloyds remains one of the UK’s largest retail and commercial banks, with a broad customer base spanning consumers, businesses and financial institutions.

Natalie Wu, machine health lead and software engineer at Oxford-based Alloyed, is helping to advance additive manufacturing using data-driven engineering.

The firm designs and produces high-performance metal components using advanced 3D printing, with clients including BMW, Boeing, Hitachi Metals and Microsoft.

Ms Wu said: “Alloyed is an Oxford-based firm that specialises in the design and manufacture of super strong, high-performance and lightweight metal components that can withstand extreme heat conditions, using 3D-printing technology.”

Recent projects include thrusters for the European Space Agency’s Argonaut programme and AR glasses frames, both requiring components that are lightweight and heat-resistant.

Ms Wu joined the company in 2024 and now leads a team focused on machine reliability and efficiency.

She said: “Fortunately, I’ve never felt underestimated simply because of my age.

“That said, working in a fast-paced, highly technical and traditionally male-dominated industry can naturally bring moments of imposter syndrome, especially when you’re surrounded by talented engineers with years of experience.”

She credits Alloyed’s trust in her abilities and emphasis on practical responsibility for boosting her confidence and professional growth.

The presence of strong role models and supportive networks is essential, she said, to attract and retain more women in engineering.

During her studies at Imperial College London, Ms Wu completed internships at Alloyed before joining full-time after graduation.

She encourages more young people, especially women, to explore the sector, describing it as collaborative, creative and deeply impactful.