CIPD Voice: Issue 24

The recent introduction of the Immigration and Social Security Co-ordination Bill into the House of Commons has effectively confirmed that EU nationals will be placed on the same footing as non-EU migrant workers from January 2021. And according to a recent survey by the CIPD, this will leave a substantial proportion of employers with a matter of months to prepare for them while having to deal with Covid-19.

CIPD’s survey and Brexit’s impact

Only 12 per cent of employers say they have made changes in anticipation of the migration restrictions. This finding is worrying given the scale of the challenge facing employers that want to hire EU nationals. Substantial fees, right to work checks, the requirement to have a sponsorship licence and a slower recruitment process are all features of the new post-Brexit immigration system that employers will have to get used to.   

The concern extends to workforce planning, where it seems that relatively few employers have carried out a workforce audit to assess how the minimum salary and skill requirements for EU workers will affect them. This is reflected by the relatively high proportion (41%) of employers in the same survey who don’t know whether the migration restrictions will allow them to meet their recruitment needs.

This is a worry for low-wage industries, such as hospitality especially, where staff budgets will be under severe strain following Covid-19 and where large numbers of EU migrants are employed. In addition, the removal of the proposed one-year temporary visa, and the continued uncertainty over a reciprocal Youth Mobility Scheme, may mean that there will be no route for employers to recruit unskilled labour from the EU in the future. 

However, it is important to point out that the net impact of the proposals may not be as negative as many commentators believe. First, the relaxation of the proposals will make it easier for employers to recruit non-EU nationals from next year, mainly through the lowering of the skill threshold to A-level occupations. Second, official data shows that employment has increased sharply among managerial and professional occupations, which would not be affected by the new immigration regime in terms of eligibility. In contrast, employment growth has been slow in low-skill occupations.

What the Government could do

Nonetheless, while the post-immigration Brexit policy has been finalised, there are a number of ways government policy can better support employers. One practicable measure would be to introduce umbrella sponsors, which would allow third parties, such as membership bodies, to sponsor non-UK workers. This arrangement would be economical from an administrative and cost perspective and would appeal especially to low-volume users of the system.   

The other obvious route to help fill recruitment gaps would be to encourage greater investment in skills in the domestic workforce. To do this, the Government must invest more  in further education and lifelong learning, broaden the apprenticeship levy to make it more flexible to cover other forms of accredited training and provide enhanced business support on people management and training for small firms delivered at a local level. These changes can both help employers adjust to the new system and help support efforts to improve the UK’s productivity, which remains our biggest economic challenge.

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.