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How is the new points-based immigration system impacting businesses?

One year ago, the government launched the points-based immigration system and opened the Skilled Worker Visa, marking the UK’s biggest shift in immigration policy in recent history. With supporters and detractors of the move, Business Leader has looked at the impact of the new system.

According to the Government, the new points-based immigration system means the British immigration system is now under the control of the UK Government. This has given British firms the freedom to recruit and employ people based on the skills and talent they offer, rather than basing employment decisions on the country where someone comes from.

Home Secretary Priti Patel said: “Our departure from the European Union enabled us to end freedom of movement and introduce a new points-based immigration system to control who can come to our country legally.

“One year on, our system is making it easier for businesses to hire the skills and talent they need, while incentivising investment in our domestic workforce, boosting wages across the country.

“But illegal migration remains a long-standing problem with the number of small boats crossing the Channel unsafe, unfair and unacceptable. My New Plan for Immigration will reduce the pull factors in our asylum system enabling us to have full control of our immigration system.”

The government revealed that the ‘Skilled Worker’ route, which accounts for 61% of work-related visas granted, saw the largest increase in visa numbers, up 45,866 or 57% to 126,017 and the Global Talent route increased from 595 to 2,786 visas issued by the end of September 2021.

In comparison, 110,721 Skilled Worker visas were granted by the end of September 2019 and 80,151 granted by the end of September 2020.

What has been the real impact on UK businesses?

Supporting the UK to build back better, the points-based immigration system is working in tandem with government initiatives such as the Plan for Jobs and the Lifetime Skills Guarantee which are designed to help more people secure a great job while ensuring businesses have access to the workforce they need now and in the future.

Lynne Watson, Vice President of Human Resources, Thales UK said: “The work we do at Thales, from engineering to manufacturing, is highly skilled and requires us to draw on talent from across the globe to deliver cutting edge technology and products for our customers.

“We are very proud of our diverse workforce at Thales and we see our sponsored route visa workers as a strong asset to that. We are pleased that the UK continues to be such an appealing place for so many of our global employees to live and work.”

And according to the Government, there will be changes in the New Year.

In Spring 2022, more visa routes will open, including the Scale-Up, High Potential Individual and Global Business Mobility routes. Apparently, these will provide more opportunities for businesses to recruit leading people in their fields and encourage innovators and entrepreneurs to open enterprises in the UK – supporting British jobs, contributing to the economy and improving the UK’s standing on the world stage.

But what about the impact on the supply chain?

As concern grows regarding the availability of goods in the approach to Christmas, Thanos Papadopoulos, Professor of Management in Kent Business School at the University of Kent explains how supply chains have been strained long before now.

He said: ‘This Christmas the supply of Christmas trees, toys, alcohol and food are “under threat” in UK, mainly due to issues surrounding supply chains. The shortages in labour in the farming and agricultural sectors have been the result of the double act of the pandemic, and the disruptions caused by Brexit and workers’ visas. With the new immigration rules in effect but without necessarily enough preparation from both the government and suppliers, sectors relying on workers from EU, such as HGV drivers and workers in fields/poultry farms, have struggled.

“Unharvested vegetables and fruit, as well as surplus of pigs in farms have created waste, stress, financial problems within supply chains and a catastrophic collapse in the price of pork. At the same time, shoppers are getting their orders for Christmas food very early and shortages, as well as panic buying, were predictable.

“The Prime Minister attributed the shortages to the pandemic; to businesses for using immigration as an excuse not to invest in their company or staff; and to necessary pains for the economy to thrive after Covid and Brexit. It is true that the supply chain challenges may relate to Brexit and Covid, but they are also related to materials and workers’ shortage, as well as transportation delays happening at the same time with spikes in demand for consumer goods and materials.

“The government has been re-active by issuing temporary visas for workers and HGV drivers, which is only a short-term solution as many of these expire on New Year’s Eve. It is a matter of urgency, for consumers getting their goods and British businesses being saved from huge losses, that we go beyond the holiday of Christmas to be able to create a resilient supply chain that will allow for responding well in unprecedented challenges.

“Christmas will be saved. More planning, coordination, collaboration, and local sourcing are all taking place. But it important to look ahead, acting proactively to mitigate risk, and delineating a long-term resilience strategy. This strategy must include investments in local supply chains to foster collaboration and adaptation to changing circumstances; technology adoption, integration and swift informed decision-making based on data will allow to predict shortages and challenges as well as to re-act quickly when the situation worsens. The better and quicker a long-term strategy is put in place, the stronger and more resilient the supply chain will be in unprecedented challenges.”

If the new immigration system – why is there still a skills crisis?

According to The Open University’s annual business report published in partnership with the Institute of Directors, UK employers are facing a skills shortage when it comes to hiring specialist, entry level talent.

The Open University’s annual Business Barometer 2021 report reveals 63% of organisation leaders are struggling with recruitment as candidates lack specialist skills and relevant experience. In fact, almost a quarter (24 per cent) believe that finding staff with the right skillset remains the single biggest challenge facing organisations in the next five years.

The report reveals almost half (45 per cent) of employers struggle when recruiting for non-senior roles. Despite the challenges associated with hiring entry level talent, more than half (56 per cent) of businesses believe that apprenticeships and work-based learning are critical to their long-term success, an 8 per cent increase from last year. Additionally, 96 per cent of employers currently working with apprentices plan to maintain or increase the number of apprentices in their organisation.

Based on survey amongst 1,500 senior organisation leaders, The Business Barometer report is a temperature check on the UK’s business landscape across a multitude of different nations, regions and sectors. The skills shortage has remained a challenge with 40 per cent of business leaders in 2021 struggling to recruit specialist talent and over a quarter recognising the difficulty in hiring entry level staff.

Viren Patel, Director of the Business Development Unit at The Open University commented: “The ability to find specialist talent is proving a real headache for business leaders today. Our survey findings highlight the skills gap is here for the long haul and it hasn’t improved in the last twelve months.

“The skills and labour shortage is being felt across multiple sectors of the UK economy and many employers see this as a long term challenge. Almost two thirds of organisation leaders admit they have struggled to find the right people with the right experience, demonstrating the need for enhanced training to nurture employee skills, knowledge and workplace learning. We want all organisations from all sectors to think ahead and invest to fuel future talent and success.”

The survey reveals more than half (56 per cent) of employers leaders believe unfilled vacancies overextend their workforce and similarly the skills shortage stifles their growth potential and may impact staff wellbeing. A third (33 per cent) say they have left a position vacant due to not being able to find an appropriate candidate, while 32 per cent have introduced new training to existing employees.

Kitty Ussher, Chief Economist at the Institute of Directorshighlights: “This year’s Business Barometer demonstrates the huge impact that both the pandemic and Britain’s decision to leave the European Union have had on recruitment at all levels; over six in ten firms now say they have a skills shortage. On the plus side, we are also seeing optimism around the potential for remote working to fill skills gaps and an appreciation of the role of apprenticeships to train tomorrow’s workers. We’re asking the UK government to put lifelong learning, retraining and upskilling at the heart of their forthcoming Budget so that firms and individuals alike can fully take advantage of the massive opportunities that are available as our economy recovers and restructures.”

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