CIPD Voice: Issue 13

One of the biggest challenges facing many HR professionals in the next few years will be how they respond to migration restrictions for EU nationals when they are introduced. The key question on everybody’s lips, therefore, is what system we can expect from the new system, and how rigid the Government’s plan to have an immigration system based on attracting the ‘brightest and best’ EU nationals will be in practice. We had expected the Government to set out its thinking in a White Paper as long ago as last summer, however it was recently announced that this has been delayed – it might not even be due until the end of this year.

To help inform our lobbying efforts with the Home Office, which is facilitated by our membership of the primary employers’ forum that meets monthly, the CIPD has carried out an in-depth survey to assess employer attitudes. And the results reveal that employers overwhelmingly support a national approach to tackling the UK’s skill and labour shortages post-Brexit if migration restrictions are introduced, as expected. 

The national survey of more than 2,000 employers found that the majority of employers (41%) would prefer a UK-wide immigration system that is based on national labour or skill shortage occupations in the likely event of migration restrictions once the UK leaves the European Union. In contrast, around one in ten (13%) favour a sectoral policy and just 5% would back a regional policy. The preference for a national labour or skills shortage occupation, that would essentially provide a low-skilled route for employers, scheme reflects the main reason given by organisations for employing EU nationals, which is because they can’t find local applicants to fill lower skilled roles, with 28% of employers citing this.

The idea of post-Brexit national skills or labour shortage occupation list would have many advantages. It would help meet the Government’s objective to bring net migration down while not penalising employers who have no alternative than to recruit EU nationals for low-skilled roles. A national scheme would also be the most straightforward, unbureaucratic option to implement, especially compared with a regional system, which multi-site organisations would have particular difficulty dealing with. It would also be fairer, because certain regions or sectors would have preferential arrangements over others.

The survey also shows clearly that organisations that employ EU nationals are significantly more likely than employers that don’t recruit EU nationals to be investing in training, as well as seeking to recruit from a wider range of under-represented or disadvantaged groups such as older workers or those from minority ethnic backgrounds. The survey indicates that it is highly unlikely that future migration restrictions on EU nationals will act as a catalyst for improving skills investment and the participation rates of under-represented groups in the UK. 

It is highly uncertain just how organisations would respond to migration restrictions, as it is dependent on what policies are introduced. However, while the survey data points to strong appetite among employers that they will continue to seek to employ non-UK nationals, some say that they will seek to recruit from a wider pool of applicants and/or increase in investment in skills. It also seems clear that offering high pay and automation are not seen as potential substitutes for employing EU nationals overall.

As a result, the CIPD shall be putting forward its case for a less restrictive EU immigration policy that recognises that employers recruit EU nationals to help fill labour and skills shortages because they cannot find local applicants. The research also shows that employers that recruit EU nationals are more sophisticated in their approach to workforce development than those that aren’t on average. So if we are to kick-start greater investment in skills across the economy as the UK prepares to leave the EU then we need a wider look at the UK’s skills policy, a point underlined and amplified by the UK’s poor productivity record recently. One way the Government could begin with is by broadening out the Apprenticeship Levy to make it much more flexible to employers’ skills requirements.

Gerwyn Davies

Gerwyn Davies, Labour Market Adviser

Gerwyn is the CIPD’s Public Policy Adviser for a wide range of labour market issues. With lead responsibility for welfare reform, migration and zero-hour contracts at the CIPD, Gerwyn has led and shaped the policy debate and achieved substantial national media coverage through various publications. These include Zero-hours contracts: myth and reality (2013) and The growth of EU labour: assessing the impact on the UK labour market (2014). In addition Gerwyn authors the institute’s high profile and influential quarterly Labour market outlook report. Gerwyn is an experienced labour market commentator, making regular appearances in the national media and on other public platforms, including several appearances before the House of Commons Work and Pensions select committee.