Friday 9 January 2015

Less than one third of London businesses employing migrant workers

According to research from London Chamber of Commerce and Industry, the perception that huge swathes of the London labour market are being swallowed up by migrant workers is a misnomer. The research shows that only 28% of London businesses employ workers from outside of the UK.

However, the skills brought by migrant workers are critical to helping the capital's businesses compete in an increasingly international market. The main reasons stated for employing staff from other parts of the EU are their foreign language skills (29%) and a short supply of UK applicants with the required skills (27%) or experience (23%).

Demand for migrant workers is far higher among larger firms that are likely to require more skilled workers, and this includes those in sectors such as IT, communications, education and health.

The research also found that an abundance of red tape is stifling London businesses' potential to employ more skilled workers from outside the EEA to meet their needs for particular skills or languages.

Among those who have recruited workers from outside the EEA on tier 2 or tier 5 visas* including skilled workers, many reported encountering problems around the cost of compliance with immigration law, the complexity of the tax system and uncertainty about the eligibility of the worker.

Commenting on the research, Chief Executive of the London Chamber of Commerce and Industry (LCCI), Colin Stanbridge said: "A pool of workers with a diverse range of skills and experience is critical to London businesses' success in this increasingly competitive global marketplace. However, the perception that migrant workers are propping up huge swathes of the London labour market, is misplaced.

"We cannot, however, overstate the importance of migrant labour to London's economy. Although only a small proportion of businesses employ non-UK staff, those that do are seeking skills and experience that are in short supply in the domestic labour market.

"We must up-skill our workforce to ensure that firms have access to the skills they need to compete. It is also imperative that visa restrictions are relaxed to make it easier, and cheaper, for firms to recruit staff from overseas to fill the skills gap that exists.

"In addition, 22% of businesses told us that restrictive regulations for overseas business visitor visas had a highly negative impact on the London economy. We must make it easier for London firms to trade with international businesses to help boost exporting levels."

Within the average London business, the workforce composition is 88% UK citizens, 8% EU citizens and 4% citizens from outside the EU. However, as 72% of London businesses are composed of UK citizens only, within the 28% that do employ migrant workers, these proportions will be higher.

To address the issues identified, LCCI calls for:

• The Government should invest in education and training to equip young people and adult learners with the skills that businesses need, including compulsory foreign language learning from age seven to 16. However, this is a long-term challenge and London businesses must be able to access the services of skilled migrant workers in the short term.
• The Home Office should simplify non-EU worker visa application procedures, including exemptions from the requirements to advertise jobs in the UK under the Resident Labour Market Test for smaller businesses looking to recruit highly-skilled workers.
• The Home Office should relax the immigration regime for foreign business people and simplify application procedures for key trade partner countries.

ENDS

Media contact
Jo Hooper, Press & Media Relations Manager
T: +44 (0)20 7203 1897
M: +44 (0)7827 241528
E: jhooper@londonchamber.co.uk

NOTES TO EDITOR:

1. London Chamber of Commerce and Industry (LCCI) is the capital's largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole traders.
2. Colin Stanbridge is available for further comment and interview.
3. ComRes interviewed 516 London business decision makers between 26th August and 22nd September 2014. Data were weighted to be representative of all London businesses by company size and broad industry sector. ComRes is a member of the British Polling Council and abides by its rules. Data tables are available on the ComRes website, www.comresglobal.com
4. The results relate to the proportion of non-UK employees within businesses' UK-based workforces. Three in five (63%) of companies with ten or more staff employ workers from outside the UK, compared to just a quarter (24%) of micro-businesses (fewer than ten employees)
5. Based on London businesses that employed workers on tier 2 (general), tier 2 (intra-company transfer) and tier 5 (temporary worker) visas (63 respondents).