Challenges faced by employers
1) Only a small portion of employers are aware of the government proposals and fewer still have begun to prepare for these impending restrictions. This leaves employers vulnerable to a potential labour supply ‘shock’ from 2021. Employers say this was primarily due to resource constraints and ongoing Brexit-related uncertainty.
2) Upon learning about current white paper proposals, the majority of employers were daunted or alarmed by the prospect of using this new immigration system. In particular, concerns were focused on the new minimum salary threshold of £30,000 to recruit EU workers, as well as the full range of costs that employers would incur.
3) The administrative burden of the new system also worried employers. If implemented, it would require additional HR resources to learn and administer the new system.
4) Employers were apprehensive about their future ability to attract workers from the EU – especially those who rely on this supply pool for low-skilled occupations.
The CIPD’s policy recommendations
To address these challenges, our report sets out policy recommendations for government that are simple, low-cost, fair and user-friendly. These recommendations are designed to buy more time for employers in the short-term, while ensuring the UK economy can continue to attract needed skills from overseas in the medium-term. This would soften any potential Brexit-related labour supply shock.
Two-year mobility scheme for all EU citizens
To ensure employers continue to have a practical way of employing low-skilled EU workers, the CIPD recommends that the two proposed mechanisms from government (Youth Mobility Scheme for 18-30 year-old EU citizens, and a temporary 12-month visa) be merged to create a two-year visa. This visa would allow EU citizens to live and work in the UK for a maximum of two years to study or work without a job offer – irrespective of age. This would simplify the system, make it fairer, and reduce administrative costs.
Minimum salary threshold
If the two-year unskilled route were introduced, the CIPD would support keeping the current proposal of a minimum salary threshold of £30,000 for EU workers. We do however, recommend imposing a lower salary threshold for occupations which currently are experiencing a shortage in labour supply (e.g. healthcare and social workers). This should become the default minimum salary for that occupation, ensuring affected employers can access the labour they need.
Abolishing the minimum skill threshold
To ensure simplicity and accessibility, the CIPD suggests the removal of the current proposals around a skill threshold. The need for both a salary and skill threshold in deciding whether employers can recruit EU nationals is unnecessary. For example, very few occupations which require below intermediate level skills would provide a salary of £30,000 or above.
Costs
The potential costs of recruiting workers via the skilled route, which would involve a sponsorship licence, skills surcharge and a visa, worried many employers. We therefore support initiatives to consider a ‘tiered’ sponsorship system. Amongst other streamlined schemes, this would include an umbrella sponsorship system that would allow membership and sectoral bodies to be responsible for compliance duties.
Read our report for the full findings and policy recommendations.
