Thursday 16 July 2015

Migrants are key contributor to London's success - LCCI

• London businesses appear to be struggling to navigate complex visa system
• Rules must be simplified to allow firms to bring in skills they need
• Claims job market is flooded with migrant workers unfounded

According to new research from London Chamber of Commerce and Industry (LCCI), the current visa system does not work for London business and threatens to put a brake on the economic recovery.

Migrant workers make a key contribution to London's economic success, filling the existing skills gap in the domestic labour market. For the last three successive quarters, more than half of London's businesses looking to recruit struggled to find the skilled staff they needed, and firms are turning to overseas workers.

However, claims that the London labour market is flooded with migrant workers are simply untrue. New research conducted for LCCI by research consultancy ComRes has found that only 33% of the capital's firms employ non-UK workers, with only 16% employing workers from outside the EEA. While there are relatively few non-UK staff employed in the capital, their contribution to London's economic success cannot be overstated.

Non-EEA workers are particularly important to London's burgeoning tech sector. Some of the reasons stated among tech firms for hiring non-EEA workers were for their innovative ideas and a short supply of UK applicants with the required skills or experience.

Research also found that arbitrary rules around how businesses should hire overseas staff may be stopping firms from bringing in the skills they need and unfairly penalising businesses through the prohibitive costs of hiring workers from outside the UK.

LCCI's research found that the top barriers London businesses face when trying to recruit workers from outside the EEA on tier 2 or 5 visas were uncertainty due to frequent changes in immigration law; the strict nature of the rules; and the cost and length of time it takes to comply with the process.

One example of a firm struggling to navigate the immigration system to hire international staff is a medium-sized engineering firm - Crofton Design. Steven Hale, Managing Director said: "Last year we advertised a post and the only suitable candidate was from outside the EEA. But as the post was not advertised in Europe from the outset as required through the Resident Labour Market Test, we had to re-advertise the post and within that six week period, the non-EEA applicant accepted a role elsewhere. It took six months to fill the post, which was a big setback."

As part of its research, London Chamber of Commerce calls on Government to make the following changes to the immigration system:

• Simplify rules for work visas - there are currently at least 13 different routes for work visas for non-EEA migrants; in comparison there are 4 routes for visitors. The system is so complex that many firms are seeking costly legal advice simply to fill out forms, to ensure they comply with the rules of the system. The system needs to be simplified and made easier to navigate online
• Introduce third party sponsorship - it is currently prohibitively expensive for small firms in particular to recruit overseas workers. A Certificate of Sponsorship typically costs £2,000 per employee and tailored support from the Home Office costs £8,000. The Government should look to licence third party sponsors, which could sponsor non-EEA workers on behalf of smaller firms, reducing the cost burden
• Reform Resident Labour Market Test - businesses currently have to advertise roles through JobCentre Plus, even if it's not relevant to advertise vacancies through this method. Instead, businesses should be required to advertise roles in two relevant publications for 28 days
• Address the arbitrary cap on numbers - Government should review the cap on the numbers of staff that can be recruited in certain areas and consider introducing regional variations, as London businesses are more likely to require international skilled staff than other areas of the UK

Commenting on the research, Chief Executive of London Chamber of Commerce and Industry, Colin Stanbridge said: "Businesses are being tied up in red tape trying to navigate the complex immigration system when trying to hire staff from outside the EEA. It is also hugely costly to bring in staff with the right skills, due to the cost of sponsorship and the increasing need to seek legal advice to navigate the system - smaller firms in particular are unfairly penalised by the prohibitive costs.

"Migrant workers have always been critical to the success of London's economy, so we must ensure that the visa system works for London businesses. The problem is certainly more acute here, where there are clusters of specialist businesses needing particular skills, which are in short supply among the domestic labour market.

"Government must make it easier for businesses to recruit skilled staff from overseas. London firms aren't trying to flood the market with overseas talent, nor are they looking to pass over appropriate UK candidates, they are simply to fill skilled jobs with skilled candidates, wherever they come from."

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 503 London business decision makers between 29 January and 16 February 2015. 100 of these decision makers employed citizens from outside the UK / EU / EEA, while 30 employ citizens from outside the UK / EU / EEA on a tier 2 or 5 visa. Data has been weighted to be representative of all London businesses by company size and broad industry sector.
4. 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