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BUSINESS NEWS - Migrant restrictions fail to encourage worker investment

Posted 23rd May 2023 • Written by •

CIPD research on employers’ use of the post-Brexit immigration system find need to tackle skill and labour shortages

New CIPD research exploring how UK employers have adapted to the point-based immigration system after Brexit shows it works adequately for most employers that have hired high-skilled migrant workers since January 2021. However, two years on just 15 per cent of employers have used the system to sponsor migrant workers, despite six in 10 (57 per cent) employers having hard-to-fill vacancies. The report also suggests that restrictions on employers’ ability to hire migrant workers aren’t incentivising enough employers to invest more in the recruitment and training of UK workers as intended.

As a result, the CIPD is calling for a major revamp of skills policy and industrial strategy, to encourage and enable more employers to recruit, train and retain a wider range of workers.

The introduction of the new points-based immigration system in January 2021 was supposed to prompt employers to hire more UK-born workers for low-skilled jobs and increase investment in workforce skills development and technology.

The CIPD’s research suggests that this does not appear to be happening. It’s the minority of mainly large employers that have sponsored migrant workers since January 2021 that are most likely to be taking a range of actions to tackle hard-to-fill vacancies. In response to their organisations’ hard-to-fill vacancies, employers that have sponsored migrant workers since 2021 are more likely than other employers to have:

  • Hired apprentices (34 per cent vs 23 per cent)
  • Hired UK graduates (28 per cent vs 14 per cent)
  • Introduced or increased investment in automation (23 per cent vs 12 per cent)

Likewise, employers who have sponsored migrant workers are also more likely than those who have not to report that in the last three years they have:

  • Recruited Black, Asian or minority ethnic people (75 per cent vs 52 per cent)
  • Recruited people with a history of long-term unemployment (29 per cent vs 13 per cent)
  • Recruited people with a disability or long-term health condition (57 per cent vs 31 per cent)

An anticipated benefit of changes to immigration policy was that it would encourage employers to invest more in local workers, but in too many instances this doesn’t appear to be happening as intended,” notes Ben Willmott, head of public policy for the CIPD. “If the Government wants to support the employment and training of UK-born workers, it needs to work more closely with employers to address failing policies such as the Apprenticeship Levy.

“There is also the need for wider reform of skills and other areas of policy such as innovation, business support, Statutory Sick Pay and labour market enforcement as part of the development of a new approach to industrial strategy,” he added. “One that can boost labour market participation, training and productivity growth across all sectors of the economy.”

The CIPD’s research found that over half (54 per cent) of employers that have used the new system believe it is effective in helping address skill and labour shortages, compared to a third (34 per cent) that feel it is ineffective. Overall, it finds the new system has been used effectively to address rising skills shortages in certain sectors, including health, social care and IT.

The report also highlighted areas where the immigration system could be improved. Users of the system cited drawbacks with the internal administration time required to hire through the sponsorship system (48 per cent). Employers were also concerned about the costs of hiring through the system (44 per cent) and the overall time involved in hiring through this route (42 per cent).

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