All change? Migration and the UK workforce

There seems little doubt that the UK is in a state of flux.

Only weeks after suggesting that the country would officially avoid slipping into recession, the Bank of England has now raised interest rates once more and warned of stagnation for some time to come (https://www.thetimes.co.uk/article/7091cc54-c94c-11ed-ba0d-3f0d2d616787?shareToken=cd2c65e68a875fbbc6a9031f9f121726).

That uncertainty was echoed just 24 hours later, when the business consultancy, Accenture, announced massive job cuts due to concerns about how companies across the globe would be able to contend with a series of serious challenges (https://www.thetimes.co.uk/article/db20aff8-c984-11ed-ba0d-3f0d2d616787?shareToken=7edcda41516ff77697ff03cbe169abfe).

Even though the economy has been hobbled by rising prices resulting from - among other things - the continuing war in Ukraine, I would suggest that there has been something of a lack of direction since start of the coronavirus pandemic.

It is perhaps a timely coincidence, therefore, that the Office for National Statistics (ONS) chose the week of the third anniversary of the UK's first lockdown to release data relating to one key driver of economic mobility; namely, migration (https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/articles/thechangingpictureofshortterminternationalmigrationenglandandwales/census2021).

Drawing on the findings of the 2021 census, it was rather illuminating.

The figures showed that almost half of the short-term migrants (ie, those intending to remain in the UK for fewer than 12 months) recorded by the census were students, an increasing proportion of whom were from non-EU countries, such as China.

Of those recorded as having come to work in the UK, fewer were from the EU than in 2011, when the previous census took place.

India provided the largest single contingent of short-term migrant workers, followed by Romania, Poland and Pakistan.

It goes without saying that the 2021 figures should carry a sizeable caveat.

Although at the time the census was conducted we were a year into the pandemic, we were still bound by some of the restrictions put in place to prevent the spread of coronavirus.

Therefore, we don't know the degree to which the data presented by the ONS has been skewed by the largest public health crisis in a century.

That said, it is possible to see some trends reflected in the UK economy and the caseload handled by myself and my colleagues.

For example, the influx of employees from India does tally with my experience. In recent years, I have handled a large number of work permit applications on behalf of employers recruiting staff - especially in the IT and technology sectors - from India.

I believe that whilst that is interesting in itself, it says something else about the UK economy.

One reason why it has become a distinct pattern is because UK companies are having difficulties attracting skilled staff in the UK.

It was a point made only last month in the latest quarterly 'Labour Market Outlook' report published by the Chartered Institute of Personnel and Development (CIPD) (https://www.cipd.co.uk/Images/labour-market-outlook-winter-2022-23_tcm18-113997.pdf).

A study made up of the views of 2,000 businesses, it found that some 57 per cent of UK employers are having trouble filling vacancies.

One possible reason why was highlighted by another report, issued in January by a research group funded by the Economic and Social Research Council (ESRC) (https://ukandeu.ac.uk/the-impact-of-brexit-on-the-uk-labour-market-an-early-assessment/)).

It concluded that the UK's withdrawal from the European Union had led to a shortfall of almost half a million "EU-origin" workers.

That deficit has not been closed by a rise of 130,000 employees from outside the EU, most of whom are in less skilled professions.

Given that situation, it is perhaps only natural that employers look further afield in order to fill vacancies.

Even so, there is another dimension to consider, one underlined by yet more ONS data.

A day after setting out the emerging patterns in short-term migration, the ONS explained a drop in the number of job adverts placed by businesses right across the UK (https://www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/economicactivityandsocialchangeintheukrealtimeindicators/23march2023).

It remains to be seen whether that is something of a blip or indicative of the kind of anxieties about economic prospects which has already prompted Accenture and others to reduce their headcount.