The sudden reversal of growth in numbers of EU and non-EU migrants in employment in the UK are hitting employer plans to take on more staff growth. The decline of migrants has been increasing the shortages of labour and worsening of skills.

This is the conclusion of the latest quarterly Labour Market Outlook from the CIPD and The Adecco Group, based on a survey of 1,002 employers, which shows that while the short-term outlook for employment remains strong, labour and skills shortages are accelerating.

The survey’s net employment balance remained extremely positive, however, among employers which currently have vacancies, seven in ten (70%) report that at least some of their vacancies are proving hard-to-fill, higher than in Summer 2018 (66%) and Spring 2018 (61%).

In addition, over two in five of all employers (44%) report that it has become more difficult to fill vacancies over the past 12 months at their organisation, while over a third (34%) of employers say that retention pressures have risen during the same period.

According to the latest official data, the number of non-UK-born workers in the UK decreased by 58,000 between 2017 and 2018, compared with an increase of more than a quarter of a million (+263,000) from 2016 to 2017.

Interestingly the number of non-EU-born workers in the UK has also decreased by 40,000 between 2017 and 2018, compared to the increase of almost a quarter of a million (225,000) during the same period in the previous year.

From 2021 when migration restrictions for EU citizens are introduced, the labour supply of lower-skilled workers (the most crucial for the hospitality industry) will be constrained. Employers have expressed concern that the main route for recruiting EU citizens to fill lower-skilled roles that was recently proposed by the Migration Advisory Committee won’t be enough to satisfy their recruitment needs.

Gerwyn Davies, Senior Labour Market Analyst for the CIPD, the professional body for HR and people development, said:

“The data implies that the pendulum has swung away from the UK as an attractive place to live and work for non-UK born citizens, especially non-EU citizens, during a period of strong employment growth and low unemployment. This has heightened recruitment difficulties for some employers. It also underlines the risk that more non-UK-born citizens and employers will be discouraged from using the post-Brexit system if more support is not provided and it is not made simpler, fairer and more affordable; especially for lower-skilled roles.

“Against the backdrop of a tight labour market, failure to do this will heighten recruitment difficulties and could lead to negative consequences for existing staff, such as higher workloads, and loss of business or orders for firms. It’s vital that businesses understand the workforce challenges they face and make the relevant investment in skills and adopt the right people management practices to boost productivity in their organisation.”

The pay barrier is another issue that employee feels will affect their industry. A third (33%) of employers who employ non-EU citizens say that the administrative burden of using the current points-based system for non-EU citizens system, which will most likely be adopted for EU citizens from 2021, is too great. Around a quarter (26%) say that the salary threshold is too high and a fifth (20%) of employers say that the cost implications of the current system are also too high.

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