CIPD: Government should maintain the current Tier 2 visa limit
Only a tiny proportion of UK employers hold that migration cap has a damaging impact on their organisation in the short to medium term, new research by the Chartered Institute of Personnel and Development (CIPD) has revealed.
The effect of migration cap is not being felt now because of the ongoing economic crisis and the resultant stagnation in the labour market.
The CIPD has however warned that the economic context is the key, and urged the government to be ready to respond flexibly as the economy recovers if the UK wants to remain equipped with the skills and business environment required to compete internationally.
The migration cap was introduced to put an annual limit on the number of non-EU economic migrants that can live and work in the UK.
The CIPD has previously expressed concerns about the potentially damaging impact of the cap.
According to the organisation, an increase in supply of skilled workers from the UK and the EU, against the backdrop of a sharp fall in hiring intentions across all three major sectors of the UK economy, is the main reason why the government is not filling its monthly allocation of Tier 2 visas, not the cap.
The CIPD’s research reveals that the small proportion of employers who say that they are affected by the cap tend to be global companies, a disproportionate number of whom are based in the City of London.
The research also shows that fewer employers plan to hire highly skilled non-EU migrant workers in the short to medium term.
The most recent quarterly CIPD Labour Market Outlook report shows that demand for migrant workers fell in the three months to December 2011 alongside a fall in overall recruitment intentions.
The number of private sector firms planning to hire migrant workers decreased over the quarter to 23% from 32% alongside falls in the public and voluntary sectors.
The fall in demand is particularly noticeable for highly skilled roles, such as engineering, IT and finance and accountancy professionals; roles that employers have historically hired non-EU migrant workers for. The number of employers reporting difficulties filling engineering vacancies fell from 24% to 19% over the same period, alongside a bigger fall in filling IT vacancies, down from 19% to 10%.
The number of employers reporting difficulties filling accountancy or finance roles fell by a quarter, down from 12% to 9%.
According to the same survey, London employers are more likely to hire non-EU workers than other regions of the UK, with London employers particularly keen to hire IT professionals, lawyers and senior managers or executives from outside the EU.
Despite this, the CIPD argues that the number of Tier 2 visas should not be cut given the impending closure of the Tier 1 post-study worker route.
As students will have to seek employment via the Tier 2 route from April 2012, which will require the offer of employment from an employer, the CIPD argues that freezing of the current Tier 2 visa limit for April 2012-13 would amount to a decrease in real terms.
"Looking at migration statistics in isolation, it might look like the migrant cap now fits,” Gerwyn Davies, CIPD Public Policy Adviser said. “However, when you consider the context, it's apparent that the cap only fits because demand for non-EU workers has fallen sharply in recent months, with more employers now looking to take advantage of the growing supply of skilled workers in the UK and the EU, especially Eastern Europe.”
He observed that with employment prospects set to deteriorate further in 2012, there is scant evidence that the cap is hampering or will impact on employers' ability to fill vacancies with skilled workers in the short to medium.
“However, this could change quickly if the economic situation improves in the UK and EU, in which case, the Government needs to be alert to raising the bar accordingly if we face a situation where the demand is exceeding supply of suitably qualified and experienced staff for highly skilled roles," Mr. Davies said.