UK companies "wasting skills of EU workers"

British companies are missing opportunities to boost productivity by failing to maximise the skills of the EU workers they employ, according to a new think-tank study.

Workers on Millennium Bridge in London with St Paul's in the background
A report, published by the Institute for Public Policy Research (IPPR), found that a third of EU workers in the UK were in jobs for which they were over-qualified - a figure that rose to 40 per cent among workers from central and eastern Europe.

What's the percentage of over-qualified EU workers in the UK?

Additionally, seven per cent of EU-born employees with degree-level qualifications were found to be in lower-skilled occupations, compared with two per cent of UK-born staff and four per cent of non-EU workers."We calculate that reducing over-qualification among migrant workers (educated to degree or 'A' level), so that it corresponds to over-qualification levels among the UK-born, would deliver an increase in annual economic output of approximately £7 billion," says the report.

Why is it important to reduce over-qualification among EU-born workers in the UK?

The report said this additional economic output was important for three reasons:
  • First, as the UK had grappled with persistent productivity stagnation since the financial crisis, skills matching should be a relatively small and low-cost action with immediate benefits for productivity.
  • Second, the increased output would generate significant income gains for workers. This would not only be direct benefit for their personal lives, but would also be likely to drive additional consumption; a factor in creating new jobs and business opportunities.
  • Third, there was likely to be a substantial fiscal benefit from skills matching. Based on estimates that the UK government receives approximately 33 per cent of GDP in tax revenues, the report estimated that the increase in economic output should translate into approximately an additional £2.3 billion in tax revenue.
IPPR researchers Marley Morris and Dean Hochlaf, the authors of the report, said the UK was currently wasting the qualifications and skills of hundreds of thousands of EU27 workers.

Strong economic case for a new programme of investment in UK labour market integration

“There is therefore a strong economic case for a new programme of investment in labour market integration – including in English language proficiency, which our research suggests is associated with poor labour market outcomes such as over-qualification," they said.“We have found that over-qualification is one of the key labour market challenges for migrant workers. Skills recognition should therefore be a priority for investment.“The government should support pilot projects for migrant skills recognition and accreditation in other parts of the UK. These projects could focus on particular sectors facing skills shortages, such as construction, IT, and social care.“The UK has grappled with persistent productivity stagnation since the financial crisis. In this context, skills matching should be a relatively small and low-cost action with immediate benefits for productivity.”Do you want to keep up-to-date on the most important trends and changes in the HR, Talent Management and Global Mobility world?  Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory