Firms unprepared for new visa system - CIPD

Employers in the UK are facing a "painful adjustment" to the new immigration system due to be introduced at year's end, according to a report from the Chartered Institute of Personnel and Development (CIPD).

David Sapsted

7 July 2020

The end of freedom of movement for workers from the European Union requires action from both employers and government, according to a report from Gerwyn Davies, CIPD’s senior labour market adviser.A survey by the institute found that only 12 per cent of employers had made adjustments in anticipation of the upcoming restrictions under the new, points-based immigration system.The situation of those who had not yet made changes has been made worse by having to confront the problems caused by the Covid-19 pandemic, said the CIPD. "This finding is worrying given the scale of the challenge facing employers that want to hire EU nationals," commented Mr Davies."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."Mr Davies said that the survey found relatively few employers had carried out a workforce audit to assess how the minimum salary and skill requirements under the new system would affect them, with 41 per cent of firms admitting they did know whether the new migration restrictions would enable them to meet their future 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," said Mr Davies."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, his report added that the net impact of the changes might not be as negative as many commentators had stated."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."

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Mr Davies added that there were a number of ways government policy could better support employers. He suggested the introduction of umbrella sponsors to allow third parties, such as membership bodies, to sponsor overseas workers.He said that such an 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," he said."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."