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Post-Brexit restrictions failing to plug low skilled vacancy gap

Post-Brexit restrictions on hiring migrant workers have not led to employers investing more in the recruitment and training of UK workers for low-skilled jobs.

The introduction of the new points-based immigration system in January 2021 created restrictions on employing low-skilled migrants.

It aimed to encourage employers to hire more UK-born workers for low-skilled jobs and increase investment in skills. 

In his budget speech in March 2023, chancellor Jeremy Hunt stated Brexit represented a decision to change the UK’s economic model from “one based on unlimited low-skill migration to one based on high wages and high skills”. 

Yet CIPD research has found organisations that hired migrant workers since January 2021 were more likely to be investing in their UK-born workforce than those employers that haven’t hired migrant workers.

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Employers that have sponsored migrant workers since 2021 were more likely than other employers to have hired apprentices (34% vs 23%), hired UK graduates (28% vs 14%) and introduced or increased investment in automation (23% vs 12%).

Ross Kennedy, senior client manager at immigration law firm Vanessa Ganguin, said political parties and press had unhelpfully framed the debate around post-Brexit skills shortages as a choice between hiring from abroad or the UK. 

Speaking to HR magazine, he said: "The picture isn’t a dichotomy between employers that hire from abroad or those that train up a local workforce. It therefore can’t legitimately be said that the immigration system is taking opportunities away from resident workers.

"The post-Brexit landscape is one of some employers that have the resources to invest in sponsoring foreign talent and invest in training, while less well-resourced organisations are struggling to do either." 

In the CIPD research, the two main reasons employers hire migrant workers was because they have difficulty in recruiting UK-born workers to particular types of jobs or roles (37%) and problems with recruiting UK-born workers with the necessary technical skills (35%). 

Just 15% of employers have used the points-based system to sponsor migrant workers, despite six in 10 employers having hard to fill vacancies.

Kennedy added: "Politicians keep saying that they don’t want immigration to be a sticking plaster solution to longterm skills shortages. Yet investing in sponsor licences to hire abroad and setting up training schemes are both burdens that fall on employers." 

The CIPD also found that EU nationals tended to work longer hours, around 6% more than their UK counterpart.

Ben Willmott, head of public policy for the CIPD, said government policy had not encouraged employers enough to invest more in UK workers.

He said: “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. One that can boost labour market participation, training and productivity growth across all sectors of the economy.”

Over half (54%) of employers that have used the new system think it is effective in helping address skill and labour shortages, compared to a third (34%) that think it is ineffective.

Willmott also recommended changes be made to the immigration system.

He added: “The shortage occupation list should be regularly reviewed and broadened where necessary and there is a strong case for extending the Youth Mobility Scheme to include EU nationals.”  

Supinder Singh Sian, partner in the immigration and global mobility team at Lewis Silkin, said responsibility for upskilling does not lie solely with employers.

Speaking to HR magazine, he said: "The right balance needs to be struck so that regulations and tariffs don’t damage the UK’s reputation and attractiveness as a premier destination for the world’s best and brightest which remains key to helping fuel economic growth and innovation.

"Time will tell regarding the extent to which the UK can foster a new generation of skilled workers from within and how far the levy on foreign workers and reinvestment into upskilling will prove successful.”

Despite the UK’s departure from the EU, there has been no overall reduction in net migration into the country, according to the Office for National Statistics.

In the year to June 2022, long-term immigration into the UK was 1.1 million, with net migration at approximately 504,000.

This has been impacted by the war in Ukraine, which led to an influx of refugees.