• Low-paying sectors turn to EU staff because they can’t recruit Brits, study finds

  • 19 Jun 2017
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CIPD and NIESR warn government that school leavers are not enticed by ‘meat factory or care home’ work

Traditionally lower-paying sectors – such as food manufacturing, hospitality and care – rely on EU27 staff because UK workers are unwilling to take the jobs, a study out today has revealed.

The report by the CIPD and the National Institute of Economic and Social Research (NIESR), Facing the future: tackling post-Brexit labour and skills shortages, found that more than a third (35 per cent) of employers in low-paying industries have hired EU staff after being unable to find UK-born workers to fill low or semi-skilled jobs.

“With the Brexit negotiations starting this week, there is still little clarity on the immigration system that the UK will adopt after Brexit,” said Peter Cheese, chief executive of the CIPD. “An overly blinkered approach focused on simply cutting immigration to tens of thousands and focusing only on high-skilled employees could leave employers high and dry, especially those that rely more on EU migrants to fill low-skilled jobs.” 

Gerwyn Davies, labour market adviser at the CIPD, added: “The report concludes that there is a strong need for employers to be able to continue to recruit unskilled labour from the EU where they are unable to recruit locally and have shown they have made all reasonable efforts to recruit from within the UK. Any efforts to hinder this will hinder business growth.” 

And Heather Rolfe, associate research director at NIESR, said: “Our research adds further weight to evidence that employers don’t recruit EU migrants in preference to British workers, but because they attract too few British applicants. Ideally, many employers would like to recruit more young people, but working in a meat factory or a care home is not top of the list for school leavers now, and never has been.”

The research also discovered the Brexit vote has already taken its toll on recruitment. A tenth (11 per cent) of the more than 1,000 organisations surveyed said the number of EU nationals they have recruited since the referendum has decreased. 

Meanwhile, a quarter (25 per cent) of those surveyed felt introducing a requirement where an EU migrant must have a job offer before they can enter the UK would have a negative impact on their business.

In light of their findings, the study’s authors are calling on the government to make any post-Brexit immigration plans flexible, straightforward and affordable.

The CIPD report has been published just a day after a consortium of business lobby groups – the British Chambers of Commerce, the Confederation of British Industry, the EEF (previously known as the Engineering Employers’ Federation), the Federation of Small Businesses and the Institute of Directors – sent an open letter calling on the government to “put the economy first” in the Brexit talks. Among the consortium’s requests was “a flexible system for the movement of labour and skills between the United Kingdom and the European Union, that enjoys public support”. 

Despite this month’s snap general election leaving Theresa May’s Conservative party without a majority in the House of Commons, Brexit negotiations have started today as planned. 

A previous CIPD study, published in February, discovered that more than a quarter (27 per cent) of employers had already clocked signs that their EU27 staff were planning to leave their organisation, or the UK entirely, in 2017.

Meanwhile, Office for National Statistics figures, released last month, discovered that net migration fell to +248,000 in 2016, a drop of 84,000 compared with 2015 and driven in part by a sharp spike in emigration from EU nationals.

A government spokesperson said: “We are working across government to identify and develop options to shape our future immigration system. We have always been clear that it is important to understand the potential impact on different sectors and we will therefore ensure businesses and communities are given the opportunity to contribute their views.”

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One-size, points-based immigration system could lead to staffing crisis

Should the current free movement of workers be ruled out after Brexit, the government must tailor its approach to the needs of each sector – or face chaos in 2019, says Alison Weatherhead

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  • This research rather misses the point. In the labour market for those sectors, the price of labour (wages) will need to increase until supply of labour increases, the higher price of labour will also cause employers to lower their demand for labour and the market will meet at a new equilibrium. Basic market economics. Otherwise we will be in a situation where wages will not rise until all sources of external labour have been exhausted and we will be doomed as a low wage economy for the foreseeable future. Our addiction to low cost labour as a driver of economic growth is unsustainable in the long term.