Is Migration Cap hampering UK productivity? - Business Works
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Is Migration Cap hampering UK productivity?

O ne in six (17%) UK employers has been prevented from recruiting non-EU migrant workers due to the temporary cap on non-EU workers that is due to end in April 2011 and be replaced with a permanent cap. More than a third of NHS employers, for example, say that they have been restricted from recruiting skilled non-EU workers as a result of the temporary cap.

On the day that the Home Office quarterly immigration statistics for Q4 2010 are released, the latest Chartered Institute for Personnel and Development (CIPD) / KPMG study on skills, migration and offshoring in the Labour Market Outlook report shows that demand for migrant workers has increased despite rising levels of unemployment, with more than a fifth of employers planning to recruit migrant workers in the first quarter of 2011.

Almost two thirds (63%) of UK employers report that non-EU workers have allowed them to increase productivity. Public sector employers are more likely to report productivity improvements (66%) than private sector employers (50%).

Over 4 in ten (43%) of the 759 employers surveyed report that they are struggling to fill vacancies from within the UK / EU, with 23% saying they are recruiting non-EU migrant workers for engineering vacancies, 15% for IT positions and 7% for both nursing and accountancy/finance positions.

The findings also point to greater offshoring activity. Fifteen per cent of private sector companies plan to offshore jobs in the 12 months to December 2011. Less than one in ten (9%) private sector employers planned to offshore jobs in the summer 2010 report. Of those planning to offshore UK jobs, almost three quarters (71%) intend to offshore to India, around a third to Europe (35%) and more than one in five to China (22%). The most common functions offshored by employers include IT (39%), call centres (25%), and finance (23%).

"The introduction of the temporary cap has had an impact on employers' ability to fill vacancies and improve productivity, particularly in the NHS," comments one of the reportís authors, Gerwyn Davies, CIPD public policy adviser. "It remains questionable whether the increase in the number of employer-related visas issued by the government for the next year will be enough to address the projected increase in the demand for migrant workers."

"We should not forget that the UK still has skills shortages in many key areas, nor should we forget that the number of non-EU workers amounts to the tens of thousands rather than the hundreds of thousands. So while it is right to highlight our concern about rising unemployment, we should not overlook the benefits and invaluable expertise and experience that a relatively small number of non-EU workers bring to the UK economy. Keeping out skilled non-EU workers won't help unemployed people in the UK in the near term, but could have real and negative consequences for business and the public sector."

Michelle Quest, KPMG UK Head of People, says, "It is not always possible to fill vacancies from within the EU. When the specialist skills that businesses need are not available here in Europe, organisations will spread their recruitment net more widely. KPMG is already near the cap on its non-EU workforce - who add to the rich diversity of an organisation and the broad perspectives offered to clients."

"We welcome the concessions that have already been made by the Coalition Government. However, in a difficult economic environment, the forthcoming permanent cap will create some uncertainty in businesses' ability to hire non-EU talent, and those factors need to be carefully weighed when detailed decisions are taken around implementation."

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