CIPD Voice On…migration to the UK and associated skills/labour shortages. Plus our policy calls in this area. By James Cockett, CIPD’s Labour Market Economist
Estimates from the Office for National Statistics (ONS) of long-term international migration show that net migration in 2022 was 606,000. While on the surface this appears high, it’s mainly driven by students, dependants, and major humanitarian events, such as those migrating from Ukraine.
In total, 925,000 people came to the UK from outside the EU, which is 80% of the total immigration figure. However, only 127,000 non-EU nationals came specifically to work in the UK (just 13% of the total immigration figure). This is considerably fewer than the number who arrived via humanitarian routes (172,000) or to study (286,000).
Approximately 108,000 people arrived in the UK long-term on work dependant visas, most of whom were family members of those on skilled worker visas, of which over half are now working in the NHS or in care. Allowing these dependants to live in the UK is a key driver in determining whether skilled workers decide to move to the UK, currently mitigating some workforce pressures.
The low migration figures for work visas are unsurprising and are reflected in our recent report, Migrant workers and skills shortages in the UK. The report explores how UK employers have adapted to the point-based immigration system and finds while the new system works relatively well for the organisations that have used it, only a minority of employers (15%) have sponsored migrant workers since it was introduced.
As the report highlights, there are two main reasons why employers are hiring migrant workers. Firstly, because they have difficulty in recruiting UK-born workers for particular jobs or roles (37%). And secondly because they have problems recruiting UK-born workers with the necessary technical skills (35%).
Seven in 10 (71%) employers who employ migrant workers believe they are reliant on migrant workers to some degree. Something the UK Government is trying to avoid. The UK is currently suffering from persistent labour and skills shortages with six in 10 (57%) employers experiencing hard-to-fill vacancies. These employers are more likely to be proactive in using the new immigration system to recruit, but the immigration system is failing to meet their needs. Sectors such as transport and storage, and hospitality are seeing the biggest shortfall in workers yet are unable to access appropriate labour through the current system.
The immigration system is broadly meeting its aim of enabling employers to bring in migrant workers for skilled jobs. Employers in health and care have reaped this benefit the most. However, policy-makers should continue to improve the system and make it flexible and user friendly, particularly for SMEs. Changes such as extending the Youth Mobility Scheme to EU nationals and broadening the shortage occupation list to other areas of the economy is likely to alleviate labour shortages in the short term.
If UK Government plans address skills shortages and support the development of UK-born workers, then the government needs to work with employers to change failing areas of skills policy such as the Apprenticeship Levy. Wider reform of skills and other areas of policy is also necessary, including in innovation, business support, Statutory Sick Pay and labour market enforcement. This wider reform should form part of a new industrial strategy. One that can boost labour market participation, training and productivity growth across all sectors of the economy.
Click here to read our immigration report, Migrant workers and skills shortages in the UK.