Migration

A migration system which allows businesses to access the skills and labour they need to deliver growth

Our consultation shows that there is a whole-economy need for labour and skills from abroad. Sectors which may initially prioritise highly-skilled employees have a reliance on non-graduate employees in their supply chains, and the benefits of innovation and productivity brought by higher-skilled employees from abroad are directly felt in every industry. An immigration system which promotes openness and flexibility of movement must go hand-in-hand with the domestic skills agenda.

Even before the referendum, businesses in all sectors of the economy were highlighting difficulties in recruiting staff, with gaps filled by workers from abroad

Hard-to fill vacancies are found in almost every sector, from construction to the creative industries, tourism to transport. Sectors from energy to technology project rapid growth in vacancies over the coming years, and there is a huge pressure for engineers from manufacturing to professional and business services. With the UK's employment levels at a record high at 74.5% [1] , over a third of businesses are not confident about filling their high-skilled jobs in future [2] .

The challenges of hiring workers from the domestic workforce has led companies to look abroad for employees. Access to workers from abroad has been part of the solution to support economic growth. This has led to a significant number of employees from other countries – but particularly from the EU – in businesses in every sector of the UK.

A solution is needed for skills in the UK. However, this must be a long-term solution, reached by co-ordination and collaboration between the many pressured industries, government and the education sector. Firms across the economy are already committed to developing talent in-house and working with schools, colleges and universities to help find a long-term solution [3] . 78% of companies surveyed by the CBI make use of external training and development [4] to meet needs in house, and UK business invested £45billion [5] last year in training - more than the entire secondary school budget. But there is more to do to develop a range of high quality routes to higher skills throughout our education system.

Urgent guarantees are needed to allow EU migrants already in the UK to remain. This is vital for businesses in every sector. Businesses across the economy have invested in their workers from abroad. They have provided opportunities, training, support, and earned their loyalty. The business community is highly motivated to ensure that migrants from EU countries already working in businesses can remain in the UK, and reciprocal arrangements are ensured for UK citizens in the EU.

The consequences of restrictions on non-graduate workers from abroad would be focused on labour-intensive sectors, but would have effects across the economy

Numerous labour-intensive industries have many hundreds of thousands of EU migrants already forming an integral part of their workforce. This includes sectors such as agriculture, construction, care, food and drink, hospitality, leisure, tourism and retail. As long as the UK remains a high employment economy, this need is likely to continue. Employers value the experience and talents that many EU migrants in these industries can bring, particularly if they have worked in the same sector in different geographies. Some of these sectors have a particular need because they undergo seasonal fluctuations in their requirements. However, this is not the case for all industries which require non-graduate migration to support their workforces.

It is important for the whole economy that the UK's new immigration system allows business to access the non-graduate labour it needs. The role that non-graduate migrants play in our economy is vital, particularly in labour-intensive industries that also play crucial supporting roles for other sectors. For example, difficulties fulfilling orders in the transport, distribution and logistics sector would have a negative effect on retail, manufacturing, food and drink, chemicals, plastics and life sciences – any industries that require goods to be moved from one location to another. Similarly, difficulties fulfilling construction projects as a result of labour shortages would impact infrastructure that supports the whole economy. Additionally, this would affect the cost of housing and real estate, with effects on every sector struggling with the effect of high house prices on workers and the cost of office space.

There are also numerous cross-sectoral occupations where shortages of UK workers have been filled by non-graduate workers from abroad. This includes hospitality roles within businesses in other sectors – cleaning and catering. It is important therefore that the UK's new system for non-graduate immigration recognises sectoral as well as occupational need.

An open, flexible, simple immigration system is needed, particularly for high-skilled immigration that boosts innovation and productivity

The advantages brought by openness to highly-skilled people are felt across the economy. These advantages must be protected. Employees from abroad work in every sector of the economy – from chemicals to education, life sciences to energy. There is a welcome, growing demand within industry for higher skills: over three quarters of businesses expect to have more jobs for people with higher-level skills over the coming years [6] . In particular high demand are more people with intermediate-level and leadership and management skills. Remaining open to highly-skilled employees bring wider benefits. The innovation fostered by openness and international specialism is often highlighted as a prize of the creative industries, professional and business services, education and technology. Those businesses which are more labour intensive – such as food and drink and construction – also highlight the ability of highly-skilled employees from abroad to contribute expertise that the UK does not currently possess in large enough numbers. The UK also benefits by attracting jobs that serve global markets.

Global mobility is also important for all corners of the economy. Sectors which have strong global networks – such as professional and business services, technology, and financial services – want to protect the benefits of easy inter-company transfers. These allow companies to move employees to work in other EU countries simply, sometimes for several years. Companies in numerous other sectors – such as manufacturing, energy and utilities – also benefit from the ability to temporarily assign workers to projects abroad at the times when it is most needed. And an easy system for visitor travel benefits the aviation, hospitality, leisure and tourism, and transport, distribution and logistics sectors.

For those companies which do business on the island of Ireland, the future of the Common Travel Area is one of the highest priorities. Companies in agriculture, food and drink, manufacturing, life sciences and retail have all raised this issue. This is critical both in terms of travel between Northern Ireland and the Republic of Ireland, and other parts of the UK and the Republic of Ireland. The last Census recorded 14,800 people commuting regularly between Northern Ireland and the Republic of Ireland [7] .

Recommendations: Migration

The UK government's new migration system must allow businesses to access the skills and labour they need to deliver growth:

1. It should be an immediate priority for the government to secure a reciprocal agreement on the status of EU nationals in the UK

2. It is important that the new migration system accepts the need for non-graduate migration to the UK

3. The UK's new migration system should be open, flexible, and easy – particularly for high-skilled employees


References

[1] ONS, November 2016 Labour Market Statistical Update

[2] CBI/Pertemps, Employment Trends Survey 2016

[3] CBI, The Right Combination

[4] CBI, The Right Combination

[5] UKCES, 2015: UK Results

[6] CBI, The Right Combination

[7] NISRA, Census 2011 – Ireland and Northern Ireland

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