THE BLOG
28/08/2018 15:15 BST | Updated 28/08/2018 15:15 BST

How Employers Can Better Reap The Migration Dividend – For Communities And Themselves

William Barton via Getty Images

Pete works as a car mechanic on the outskirts of Coventry. For years, he has shared the workshop with colleagues from Poland. He has grown to admire their commitment and their expertise, even picking up some Polish slang along the way. When talking me through his decision to vote leave, Pete reflects on the dilemmas of this situation. Yes, he can appreciate that local employers would have a tougher time after Britain leaves the EU. He also knows that this would pose problems for the city – Coventry is growing fast and so is demand for MOTs.

But at the same time Pete’s view is that the fact so many workers like his colleagues have moved to the city has made life tougher for younger lads seeking to break into his profession. He tells me that in the past his employer would have had to work hard to find promising young workers, dealing with the local college, and taking responsibility for teaching adolescent apprentices to turn up on time and treat customers politely. Today, life is much easier for his boss. His colleagues from Europe arrived in their late twenties and early thirties, fully trained and driven by a keen desire to save as much as possible to put down a deposit for a house or start up a business back home. For him, he explained, Brexit should be an opportunity to remind the people in charge, including his own boss, to take greater responsibility. In his words: “They need to come back to their roots.”

There is no doubt that Brexit is going to make life a great deal harder for employers. From the CBI to the CIPD, business concerns about the impact of ending free movement are now centre stage. Already, relatively small falls in net migration are putting pressure on recruiters. In Coventry alone, surveys show that one in three businesses in Coventry see skill shortages as the biggest barrier to growth.

The private sector is right to point out that getting the immigration system right will be one of the ways of managing these pressures. Indeed, as argued by IPPR, Brexit means that we urgently need to make the UK’s approach to immigration more strategic, ensuring that the system is designed to actively address the structural weaknesses that affect our economy.

But for this to happen, business needs to acknowledge that it too has a role to play. Indeed, our research with leave supporters shows that the frustrations which drove that vote were as much directed at the private sector as they were at Brussels or Westminster. Our work reveals a widely shared expectation: access to workers from outside the UK should be conditional on employers giving back.

Recent IPPR analysis suggests that free movement may have let a large proportion of employers off the hook. Between 2007 and 2017, business per-employee investment in skills fell by 27%. Overall, employers are spending £3.7billion less on training than they were 10 years ago. Reversing this situation will require a change in mind set among British employers – moving away from an expectation that Government needs to cater for its needs towards a culture of shared responsibility for the UK workforce. One key starting point would be to think again about the way in which we approach immigration policy.

At present the system is doing nothing to achieve the kind of behaviour change that is required. The system to sponsor workers from outside the EU favours large employers who pay the highest salaries, can cover the expensive fees and can afford the top lawyers who can navigate the complex bureaucracy. Should the Government decide to apply those same rules to EU migrants after Brexit, which is what it has stated it aims to do, then many of the sectors which are most dependent on those workers are likely to be locked out of the immigration system altogether. Simply closing off all forms of low skilled migration from the EU, as argued by some, would not just hit the profitability of key sectors. The more likely outcome would be highly managed guest worker scheme catering for the sectors which are most desperate for workers. This approach could end up entrenching poor business models further by catering for low pay and productivity enterprises. This outcome would be in nobody’s interest.

A better alternative would be to design an immigration system which encourages greater social responsibility and commitment to the local workforce. In other words, businesses which can demonstrate high standards should enjoy significant privileges in the immigration system. This could include lower fees for visas or VIP treatment on the visa application queue. Sectors which won’t meet the high salary thresholds currently required to participate in the immigration system but can demonstrate good practice (paying the living wage, offering well-funded apprenticeship schemes, investing in progression, providing on the job English language classes for workers who need them, offering flexible working arrangements for working parents) should also have access to alternative (and more accessible) routes.

In exchange for these reforms, businesses should expect greater accountability regarding the ways in which high immigration charges are being spent. In the past 10 years not only has the price of sponsoring a worker from abroad increased five-fold, but employers are now also required to pay a high skills levy. But it is impossible to know where this money ends up. The quid pro quo for an expensive system should be greater accountability with systems in place to ensure that businesses get something in return (such as greater investment in the key skills they need). One way of doing this would be to invest a proportion of this money in local integration funds which are managed locally with the explicit aim of addressing the skills deficits which drive high dependence on workers from outside the UK.

The private sector is right to point out that the UK immigration system needs to regain the trust of the UK public. Government policy is critical to this outcome. But workers like Pete will only trust this is the case once business shows it has more skin in this game. Smart reform to the immigration system could help enable the change that is required.

Phoebe Griffith is IPPR’s Associate Director for Immigration and Integration. She tweets @PhoebeGriffith