2007 - Migrant workers flex their wings
Just when the Trades Union Congress told us last week that
migrant workers are good for the UK economy, the first signs
are appearing that the influx of Central European job seekers
may have peaked.
Home Office figures monitoring the number of people from
European Union accessions states applying for work in the
UK show a decline in applications in the first quarter of
2007 compared with the last quarter of 2006.
John Philpott, chief economist at the Chartered Institute
of Personnel and Development, speaking at a seminar at Cass
Business School in London last week, said that the statistics
could be pointing to a levelling off of migration although
the fall off could be explained in part by seasonal fluctuations.
Nevertheless, other indicators suggest that it may be only
a matter of time before the shift begins to reverse.
The Home Office statistics show that more than half of
central European migrants who applied for work in the year
up to March 2007 said they intended to stay less than three
months. This is reflected in the high proportion –
again about half – of migrants who take temporary
work, much of it in low paid jobs.
Many of these people are students undertaking short-term
work before returning home. Others are biding their time
until the jobs market improves in their home country.
The same phenomenon happened among British construction
workers and tradesmen who moved East to find work in Germany
during the manufacturing recessions of the 1980s.
An experience that was reflected in the fictional adventures
of a gang of North East builders in the TV series Auf Wiedersehen,
Pet, ended when the UK economy began to improve, providing
new employment opportunities closer to home.
Home Office statistics show that 427,000 people from the
eight nations that joined the European Union in 2004 successfully
applied for work in the UK between May 2004 and June 2006
alone. If those who are self-employed and who do not need
to registered for work are taken in to account the Government
believes the figure could be nearer 600,000.
These include people from the Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Slovakia and Slovenia. But more
than half of the officially recognised migrant employees
The Centre for Economics and Business Research, an economic
think tank, has described the economic impact of Polish
workers, in terms of spending, as the equivalent of adding
the consumer demand of Liverpool to the economy in just
The impact has extended now to a shortage of £50
notes in circulation as Polish workers send home cash to
There is a knock on effect from this employment flow running
far beyond the borders of the UK, and, for that matter,
the EU. The shortfall in Polish construction workers, plumbers
and labourers has been filled by workers from the Ukraine.
Meanwhile, employers in the Ukraine are filling their shortages
with labour from Turkey, creating a snake-effect in employment
supply and demand that finds its tail in the poorest countries.
These economic flows should be beneficial in the long term,
helping the poorer countries improve their economies and
creating new markets for wealthier countries. But employers
in the UK - a country that has benefited from a labour market
that has proved more flexible than those of most of its
European partners - need to prepare for a receding tide
of migrant employment.
Polish workers have sustained parts of the British economy
that would be suffering without their support. It’s
difficult, for example, to find a medium to large sized
hotel in Wales that is not employing Polish or other Central
While some of these people may settle in the UK, the majority
will return to their home country, leaving behind them the
prospect of chronic skill shortages in the years ahead.
To what extent are employers preparing for skill shortages
that may grow even more acute in future than they are at
The depth of employee concerns is apparent in a study*,
carried out by Ipsos MORI on behalf of Vedior, the staffing
group, and launched at the Cass seminar. Researchers interviewed
human resources directors and managers from 200 employers
across the UK economy, including services, manufacturing
and public sectors.
The feedback revealed serious concerns over skills shortages,
particularly in engineering, skilled manual work, the financial
sector and among managerial grades. Nearly two fifths of
the HR managers questioned in the research thought that
existing skill shortages would grow worse in the next few
Up to now many employers have responded to such shortages
in the time honoured way by buying labour where they can
find it at the cheapest price. But rising salaries in offshore
labour markets may be deterring those who are engaged in
longer term labour force planning. The managers canvassed
in the Ipsos MORI survey viewed offshoring as one of the
least likely solutions to growing skills shortages.
The strongest response favoured concentrating on retaining
people. The next most popular strategies among large companies
are to employ more foreign workers, more older workers and
more temporary workers.
In the traditional labour market, skills, whatever they
may be, are commodities that attract a market value. Gluts
and shortages can arise in any profession and it is becoming
increasingly difficult as an individual to plan ahead for
Jim Murphy, the employment and welfare reform minister,
told the seminar that the “shelf-life” of skills
in the UK had gone from seven to eight years down to three
to five years. This means that people will need to keep
on their toes if they want to avoid their skills becoming
It can happen to the best of us. Only two weeks ago a heart
surgeon sent me his curriculum vitae, complain that demand
for his specific skills in heart-by-pass surgery had fallen
due to new methods increasingly employing the use of balloon-like
stents to keep arteries open and working.
In recent speeches Mr Murphy has highlighted the dwindling
number of opportunities for low skilled work in the UK.
While today the UK has some nine million highly skilled
jobs, by 2020 the need will have risen to 14 million. Today
while, there are 3.4 million unskilled jobs current estimates
suggest that the number will have dwindled to 600,000 in
the same period.
The future for employers seems clear. They need to view
migratory employment as a windfall rather than as a permanent
feature of employment – although a regular supply
of student workers is likely to be maintained in low skilled
The only solid way to an economically successful and high
skilled workforce is to increase the delivery of job-relevant
skills and abilities and this has to be a joint effort,
not just among employers and the Government. Individuals
too must work at ensuring that the work they do remains
in demand. Keeping up to scratch has become a full time
*The study: Is The UK up to the job? Can be downloaded
from the HR portal at www.vedior.com
See also: Temporary