Hadi Law

One of the most common criticisms of UK businesses is that they rely too much on ‘cheap’ foreign labour rather than commit to investing in upskilling and training the local workforce. As a law firm that advises many businesses applying for or complying with a UK Sponsorship Licence, we decided to look into these allegations and determine whether they stand up to scrutiny. In May 2023, the CIPD published a report on Migrant workers and Skill Shortages in the UK based on a survey that included questions on:
  • Hiring practices of migrant workers.
  • Whether their workforce nationality breakdown has changed.
  • Which migrant routes have been used.
  • Views on the new immigration system.
  • Whether the system is addressing skills and labour market shortages.
According to the report, between 2011 and 2021, over half (57.5%) of the population growth in England and Wales was due to net migration. In addition, the country’s departure from the EU has not decreased net migration; in fact it has increased.

Governments ” ‘campaign in poetry, govern in prose”

“We can never implement your insights, because that would be political suicide” – Hans de Haas – How Migration Really Works The above quip by New York governor, Mario Cuomo applies aptly to the UK’s immigration policies for the 20 years. As one author succinctly put it: “…while politicians face considerable pressure to talk tough on immigration, there are powerful economic factors pushing them towards openness. More recent literature has developed these insights to explore how variation in national models of capitalism shape immigration policy regimes. Both the supply-side institutions of national economies (for example, industrial relations systems and education and training regimes) and the demand-side drivers of growth (which reflect an economy’s sectoral composition) shape demand for migrant workers, as well as the power of different fractions of capital and labour to secure their immigration policy demands.” In other words, although Governments talk about reducing immigration because they know that is what much of the electorate wants to hear, the foundations of growth and the ability to provide public services at a rate people can afford rely on the expertise of workers from abroad. A perfect example of this is medicine. In terms of funds the Government cannot recoup (i.e. through student loans), it costs around £175,000 to put one student through medical school. The Government also pays for additional training once a doctor is working. Therefore, it is the Government’s strategy to recruit around a third of doctors from overseas because another country has paid for their training. And of course, the flow of migrants runs both ways, with countries such as Australia and New Zealand aggressively pursuing NHS staff to fill recruitment shortfalls.

Do statistics show that UK businesses rely on ‘cheap foreign labour’?

Since the UK officially left the EU on 31 December 2020, the Home Office has approved record numbers of Skilled Work Visas and Health and Care Skilled Worker Visas. The key word here is skilled. According to the Home Office immigration statistics for the year ending December 2022, the top five visa applications by industry were:
  1. Human health and social work activities.
  2. Information and communication.
  3. Professional, scientific, and technical activities.
  4. Financial and insurance activities.
Given that the minimum salary for a Skilled Worker Visa is £38,700 (there are exemptions for this requirement, including those applying for health and care workers), the evidence suggests that employers are not relying on ‘cheap labour’ because the jobs that migrants are filling are highly skilled and highly paid. It is true that those who come to the UK on Temporary Work Visas work in lower-skilled/wage sectors such as agriculture, forestry, and fishing. These migrants are often highly dependent on their employers and are more at risk of exploitation and low wages. However, this requires regulatory and legislative enforcement by the local authorities and the Home Office to ensure the minority of employers who are abusing their workers are swiftly dealt with and the migrants who are being exploited are made safe. Employers who responded to the survey that provided data for the Migrant workers and Skill Shortages in the UK gave two main reasons for hiring workers from overseas:
  1. They had difficulty recruiting UK-born workers to particular types of jobs or roles, and
  2. They had problems finding UK-born workers with the desired skills.
“A large proportion of employers perceive migrant workers to have technical skills and qualifications that are hard to find (29%), with a quarter of employers believing migrant workers have a better work ethic than UK-born workers (26%). The latter perspective is evidenced by lower rates of absence among migrants compared with UK-born nationals.”[1] Despite reporting that they need to look overseas to recruit people with the skills and qualifications required, the report found that “organisations that have hired migrant workers since January 2021 are also those that are much more likely to be investing in their UK-born workforce in different ways than those employers that haven’t hired migrant workers” (my emphasis). They are also more likely to invest in technology and automation to address skills shortages. Steps taken include upskilling existing staff, taking on apprentices, raising wages, improving job quality, and attracting older workers.

Concluding comments

The argument that businesses, especially those with 250 plus employees, would rather save costs by employing migrants than give jobs to UK-born workers and pay the latter properly, instantly collapses when measured against facts and statistics. One of employers’ most significant challenges when recruiting workers from abroad is the administrative burden and cost of applying for and complying with a UK Sponsor Licence (something that an experienced Business Immigration Solicitor can help address). The fact is that, like most other European countries, the UK has a shortage of skills and employers need immigration to fill gaps to grow and make profits; thereby attracting local and foreign investment, which strengthens overall GDP. And given the birth rate has fallen below ‘replacement rate‘, this is unlikely to change any time soon. However, these organisations invest the most in technology, training, and upskilling UK-born workers, which is never mentioned by politicians or the media. Maybe it’s time these facts were pointed out. For further information on any personal or business immigration matter, please speak to our immigration law team on 01772 447000 or reach out to us on our seven-day-a-week WhatsApp helpline on 07869760533. [1] Dawson, C., Veliziotis, M. and Hopkins, B. (2018) Understanding the perception of the ‘migrant work ethic’. Work, Employment and Society. Vol 32, No 5, pp811 830. https://doi.org/10.1177/0950017017706306

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