Engineering companies in the East Midlands – including Rolls-Royce – are taking part in an innovative recruitment scheme.

Rather than lay off workers, 20 firms have signed up to a privately run ‘employment exchange’ so they can switch employees in under-performing businesses to firms with better order books.

Technicians will be trained in new skills at their new companies and can choose whether they continue to work there or return to their old employer when demand picks up again.

The aim of the scheme – backed by workers’ union Amicus – is to ensure that skilled workers are not lost to other areas of manufacturing. The scheme is also set to move to the West Midlands.

There has been a spate of redundancies in aero-engineering since the terrorist attacks of 11 September as orders for parts have declined.

Ivan Lewis, a minister at the Department of Education and Skills, said: “This can benefit everyone involved in our fast-changing industry.”