Relocation and automation – answers to immigration curbs?

Immigration restrictions expected to be introduced after Brexit will leave UK companies competing for an ever-reducing pool of overseas workers, according to a report from global consultants Mercer.

Relocation and automation – answers to immigration curbs?
UK companies in every business sector will be competing for an ever-reducing pool of overseas workers following Brexit, according to a report from global consultants Mercer.The manufacturing, hotel and catering, and transport sectors – whose workforces currently comprise between a fifth and a third of workers not born in the UK – will be hardest hit, says Mercer's latest Workforce Monitor. But it also points out that 18 per cent of staff in financial services were not British born.

Relocation abroad

Mercer says the upshot will be that some firms will relocate operations abroad or be forced to turn to increased automation.The Workforce Monitor, which analyses 11 different sectors of the UK economy, makes it clear that companies not only face post-Brexit limits on EU workers but also new curbs on recruitment from elsewhere in the world.Gary Simmons, a partner at Mercer, commented, “Since 2013, the UK-born workforce has been declining as people retire and we can see how reliant certain industries are on overseas workers filling the gaps.“The UK is likely to impose more stringent migration controls in the future and this will reduce the number of overseas workers available. While we have focused on 11 industries in this report, the fact is that every company in every sector in the UK will be competing for a reduced pool of available workers.“Problems in one sector will impact on a variety of others, so organizations need to understand the make-up of their workforce, the risks and plan how to address this challenge.”

Five core mitigation strategies

According to Mercer, there are five core strategies open to companies to help mitigate the twin impacts of demographic change and migration limits. The first is to ‘buy, build and retain’ staff, while the second is to diversify their employee base to hire those sectors of society that may be under-represented in work.Additional options are automation, the relocation of operations or, more drastically, ceasing business operations in the UK.Looking at manufacturing, the report says, “Despite being one of the larger employers of EU and non-EU workers, this sector may be less impacted by the talent crisis as its employee base has already dropped by 25 per cent since 2000. Any workforce shortage could accelerate further automation, and spur relocation.“Workers in this industry may be a potential source of talent for other sectors. A larger risk is the industry’s ability to attract the skill sets needed, especially advanced, technical skills to support automation and robotics. Retention may be a problem as other more attractive industries try to attract skilled workers.“A major risk to the UK is that manufacturers move offshore in response to this talent scarcity and possible Brexit-related trade restrictions.”

Hotels and catering will be hard hit

In the hotels and catering sector, Mercer points out that the industry has grown by 32 per cent since 2000 with the bulk of new jobs going to workers not born in the UK.“It relies heavily on a large volume of low-skill employees and the nature of this work means that relocation to other countries is unlikely. Automation poses a problem: people like to be served by people and, as a people business, the industry’s demand for talent will increase, unless fundamental changes in customer experience through automation occur,” says Mercer.On information and communication firms, the report says, "The industry is growing particularly in digital, computer, mathematical, sales, architecture and engineering roles. According to the ONS, the sector has grown by over 200,000 since 2000, with a large proportion of net new roles going to non-UK born workers.“Any decline in workforce availability poses a major risk more broadly for the UK’s competitiveness, attractiveness and productivity. High demand will make skilled workers expensive due to increasing wages. The consultancy believes that employers in this industry should look to change the demographic profile of their workforce and tap under-represented sources of talent.“Automation and remote setup of installation and maintenance activities may be possible and relocation (or contract and home working) may be appropriate for many roles. However, this has a downside as offshoring in this industry poses a risk to the UK economy.”
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In financial and insurance services, the report says major changes have already occurred since the turn of the century. “Demand for many of the traditional roles, including broking, customer services and sales, will decline as a consequence of automation and digitisation but there will be large increases in management, computer and mathematical roles. The competition for the talent needed to support digital, regulatory and cybersecurity needs is expected to be intense.”For related news and features, visit our Human Resources section.Access hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory  Get access to our free Global Mobility Toolkit Global Mobility Toolkit download factsheets resource centre

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