EEA Workers in the UK Labour Market

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The Migration Advisory Committee (MAC) has today published an interim report on a continuing study into EEA migration and its impact on the UK. The main interim findings are:

  • Most employers seek the best candidate for the job. When EEA workers are appointed it’s because they’re perceived to be the best or only qualified applicant. This is the skills gap in practice and it’s widespread. British Chambers of Commerce report high reliance on EEA workers in agriculture, transport and hospitality while educational institutions report significant skills shortages in STEM subjects, particularly scientific research.  The Society of Motor Manufacturers and Traders says it’s needs 60,000 new people in its supply chain by 2020; the UK Fashion & Textile Association says manufacturing skills are taught in Eastern European schools so migrants from there are more skilled than their UK counterparts and the MAC notes a general concern that Tier 2 skill requirements increasingly exclude non-EEA migrants from a wide range of jobs.
  • EEA workers are seen as more reliable, more flexible and more willing to take on work which UK-born workers find unappealing. Their absenteeism rates are lower and by and large they’re better educated and better qualified.
  • There’s a growing feeling that the labelling of jobs as  skilled or unskilled is out-moded, but there may be an element of  “cause and effect” in play here. Skilled EEA workers are often willing to take lower-skilled UK jobs because they’re better paid than higher-skilled jobs in their own country.  The picture may also be distorted by high levels of unemployment, especially in Southern Europe. If so, this may point to factors concerning the time when statistical data is collected and interpreted; in broad terms Eurozone economies have turned round in the last 12 months so labelling may be a transitory anomaly.
  • The ratio of vacancies to UK unemployment is high so employers tend to plug the gap with EEA workers.
  • Employers generally insist they pay the same wages to workers doing the same job, regardless of nationality. The MAC wryly challenges this. Although it’s cautious because of age, regional  industry and occupational variations it reports that:

“Among EEA migrants there is a very big difference between EEA migrants from the older member states (those who were members before 2004) who earn 12% more than the UK-born and migrants from the new member states who earn 27% less than UK-born workers.”

The MAC also notes a paradox in the UK labour market; wage growth is weak while unemployment is low. It questions evidence that wages are irrelevant to recruitment and retention preferring squeezed profit margins and other cost pressures for holding wages back.

  • Employers are concerned about restrictions on the flow of EEA workers and the form of any control mechanism but contingency planning is patchy. The MAC notes:

“Many business do not seem well-prepared for a changing and tighter labour market in which they may be competing with each other for labour more intensively than in the past; still fewer seemed to be making provision for change. A large part of this is understandable – it is very hard to plan when there is considerable uncertainty about the future (including, but not confined to, the future migration system). This sense of pervasive uncertainty came across strongly in many submissions and during our stakeholder engagement.”

The MAC’s remarks are important because it’s final report  will inform the design of the post-Brexit immigration system. That final report is due in September by when the Settled Status scheme for EU workers should be operating. Settled Status will be important for your European staff and should reduce the uncertainty from which so many are currently suffering. Do contact us to talk about it.