Only 15% of employers have used the post-Brexit immigration system to sponsor migrant workers, according to research by the CIPD.
The HR body’s analysis of how UK employers have adapted to the points-based immigration system, in place since January 2021, shows that it works “adequately” for those hiring highly skilled workers, but it has not encouraged greater investment in local talent.
Almost six in 10 (57%) of employers still have difficulty recruiting for hard-to-fill vacancies, the CIPD found.
Organisations who have been sponsoring migrant workers since the system was introduced were more likely to be actively addressing skills shortages more broadly, it revealed.
Just over a third (34%) of those that had sponsored migrant workers had hired apprentices, versus 23% that had not, for example. Twenty-eight per cent had hired UK graduates, while 23% had introduced or increased investment in automation.
Employers that sponsored migrant workers were also more likely than those who had not to have boosted the diversity of their workforce, the CIPD said.
Immigration system
Three-quarters had recruited Black, Asian or minority ethnic employees versus 52% that did not sponsor overseas workers; 29% had hired people who had a history of long-term employment; and 57% had recruited people with a disability or long-term health condition.
Ben Willmott, head of public policy at the CIPD, said the intended aim of the points-based immigration system – to encourage organisations to invest in local workers – had not been realised.
“If the government wants to support the employment and training of UK-born workers, it needs to work more closely with employers to address failing policies such as the apprenticeship levy,” he said.
Despite the system not having the impact that was envisaged, more than half of employers (54%) thought it was effective in helping to address skills shortages, compared to 34% who thought it was ineffective.
However, 48% noted issues with the administration time required to hire through the sponsorship system, and 44% were concerned about the costs involved.
Willmott added that broader action was needed to link skills policies with industrial strategy.
“There is also the need for wider reform of skills and other areas of policy such as innovation, business support, statutory sick pay and labour market enforcement as part of the development of a new approach to industrial strategy. One that can boost labour market participation, training and productivity growth across all sectors of the economy,” he said.
The CIPD made the following recommendations for government:
- Regularly review and where necessary extend the shortage occupation list to address skill and labour shortages damaging economic growth or key services
- Extend the Youth Mobility Scheme to include EU nationals
- Review the operation of the points-based system to identify areas where it could be made more user-friendly for employers, to reduce the time and cost of sponsoring migrant workers.
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It should also reform the apprenticeship levy into a more flexible skills and training levy, it advised, improve the quality of local support for small businesses around people management, and develop a refreshed approach to skills policy and industrial strategy.
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