Skills shortage is holding back business says award-winning Cambridge MD

The founder of a Cambridge tech company explains why City Deal funding for skills is crucial to business success.

Michael Swinhoe started Z-Tech in his conservatory back in 2000. Today, the company has 250 employees in Cambridge, London and Edinburgh, and there are plans for expansion in Warrington.

It’s a specialist service-based engineering company, working in power, water, rail and pharmaceuticals that is growing at a rate of 25 per cent every year.

The only limiting factor, Michael says, is that he can’t find more qualified employees.

He said: “There’s been a gap in skills in this country from when we set up, to now, and there still is a massive gap. Sixteen years on the same shortage of skills still exists. It shouldn’t really exist.

“We don’t suffer from lack of opportunity, there’s masses of opportunity in the UK. Some people say, ‘Why don’t you work in Europe or further abroad?’ and the reason is that there’s so much opportunity in the UK untapped.

Some people say, 'Why don't you work in Europe or further abroad?' and the reason is that there's so much opportunity in the UK untapped.

“We’re a well funded business, we grow organically, we’re employee-owned, self-funded, no investors. It’s not a very complex model. We’ve always kept the money in the business. It’s not funding that stops our growth, and it’s not opportunity, it’s skilled people. Always has been, and for the foreseeable future it will be.”

“As one of our limiting factors we’ve taken numerous angles to fix it. One of them is we use a lot of foreign labour. Australians and New Zealanders we have an oddly high number of, usually coming out of the mining industry. They’re incredibly well trained. Better trained than probably a lot of our apprentice trained people.

“Because we’ve done that for a long time, and a lot of those people are over here on two year or three year visas, when they go home they tell their mates who are coming over. We’ve created a sort of self generating stream of people, and because we trust and get on with the people who go back home we don’t need to interview.

“But that’s still a bit of a problem, as it’s transient and cyclic; people coming for a couple of years and then going.

“In some ways that suits us as well. If there’s a big shut down in Great Yarmouth they might want 20 guys for three weeks - if there’s lads over here seeing the world we can say, ‘Any of you want to go to Great Yarmouth for three weeks?’ and they’ll go, ‘Excellent. Yeah.’ but for a more steady family person, that’s a pain in the neck.

“The other way is that we’ve always put lots of training into apprentice training and our graduate intake. We offer internships, in fact our latest of this year’s crop have just started.

“Both got first class honours engineering degrees from Lincoln. They’re the sort of people that in a year or so we can turn into deadly systems engineers that are incredibly valuable people.

“We’re partnered up with University Technical College Peterborough, and we set some of the curriculum for Cambridge Regional College.

“In the summer we had one of the CRC lecturers come out and work with one of our guys so he could go back and teach it.

“It’s very technical work. A lot of the knowledge we have gets passed on to people. You can’t learn about it all at uni. You have to learn by doing it, with people who know. That’s the only way and it takes time. You can’t magic the skills out of a course. You have to look years into the future and keep chipping away at it.

“It’s a bit corny to say it’s all about our people, but it is, and we take it deadly seriously because it’s our biggest factor for limiting our growth.

“This year we’re growing in Warrington, and we’re being careful with how much work we take on.

“Ostensibly, whilst we’re a service company with guys in vans going around fixing stuff for people and doing clever things, actually we’ve got the layer up: operation technology and integration.

We’ve attracted a lot of clever people of the last few years. And it means that the service that we offer is different because we can do cleverer things than other people.”

“One thing that’s made us different to most other companies is the breadth of skill that we have.

“When I set the company up I actually invited some other people to join me who had some very different sills. Most companies are created and built around the skill set of the founders.

“When I set the company up, my background was electrical and instrumentation. I brought on board people who at the time might have seemed a bit random. Jeremy, who’s co-director to this day, is a software engineer. A hardcore coder. And Bill’s an installation electrician originally. We’ve got a very diverse range of skills which means the breadth of what we offer is different to most companies.

“When we first set up I didn’t even have an office. I was working out of my conservatory, out on the road, doing all the work, doing everything. A guy in London agreed to answer our phones, a very nice chap - he was retired so he was just at home. And another guy who had an industrial unit that I know in Royston allowed me to use his address so it looked like we had an industrial unit, but I didn’t.

“The problem was, when people came to deliver parcels the guy in London would answer the phone, and he had no clue where in Cambridge it was, let alone what Unit we were able to use.

“It took a while. It was a bit of a nail-biting experience because I only had so much money to keep me going. It was July 12th, 2000, that I started doing this. And the reason I know that is that I didn’t chuck the towel in with the job that I had at the time until I got my mortgage.

“I knew that as soon as I chucked the towel in no-one would give me my mortgage, so the day I got the keys to my house that I couldn’t afford, I packed my job in. So that was a bit of a risk.

“Z-Tech as a company was already set up - I actually registered it in 1997. At first we did motorbike stuff.

“Me and a mate of mine ran it as a motorbike business which is my hobby. I learnt a lot about business but it wasn’t a success. My dream at the time was that that would be my future. I’d run a successful motorbike business, and live the dream: hobby, work, loads of money. We made a mobile dynamometer that we’d take to races. It was quite a new thing - there’s lots of them around now but in the 90s there weren’t many. They call it a rolling road now and we built one into a trailer. We did that which was an absolutely brilliant laugh, but it didn’t make money. At all. In fact it lost money. But I learnt how a business ran.”

Michael is from Durham and that’s where he registered Z-Tech in the business’ early years.

“I was also fortunate enough that whilst I was doing that there was some European grant money floating around to do courses at Durham University Business School.

“I signed up for a course payed for by grant funding and went to Durham, and that was an absolute revelation. I learnt properly then about how to run a business. I was just learning things as I went along prior to that and it made me realise that what I was doing was never going to work to the extent that I wanted it to. So I stopped doing that, and had a complete change and started the business that is what it is now. Doing what I knew from my trade.”