What do employers need to know about post-Brexit immigration rules?

Economy & Politics | Reports

BrexitWhen the UK Government published its white paper on EU immigration after Brexit, it sketched out a regulatory framework which could impact UK businesses of any size and sector. If a business employs workers from the EU – or indeed, from further afield – UK immigration policy must inform HR best practices.

In the foreword to the white paper, Prime Minister Theresa May wrote: “This will be a system where it is workers’ skills that matter, not which country they come from. It will be a single system that welcomes talent, hard work, and the skills we need as a country. It will attract the brightest and best to a United Kingdom that is open for business.”

It is the Prime Minister’s job to laud her government’s policies, but Marley Morris, Senior Research Fellow at the Institute for Public Policy Research (IPPR) is less convinced. Marley says: “Our concern is that the immigration system has lacked a sense of strategy for quite some time. It’s been largely contradictory, with different demands and expectations from different government departments.

“On the one hand, you have the net migration target from the Home Office, but then you also have the Department of Education’s intention to expand international student population in the UK, our aims for housebuilding and infrastructure development which require a significant number of construction workers, the demands of the health and social sectors – there are clear tensions between different government objectives.”

However the new immigration system unfolds – and there will likely be plenty of creases to iron out – these new policies dictate the rights of current EU workers in the UK after Brexit and the future scope for businesses to recruit labour and talent from abroad. Alongside much-discussed fears of a skills shortage, the system also raises a somewhat underpublicized question: that of EU-based entrepreneurs, and their ability to found businesses in the UK.

Current EU workers based in the UK

The impact of the new system on current EU workers is relatively simple. After Brexit, EU citizens currently based in the UK will need a settled status document to live and work in the UK, and to enjoy the continuation of their current rights and free movement.

Gerwyn Jones, Senior labour market advisor for the Chartered Institute of Personnel and Development (CIPD), urges UK business owners to ensure their EU employees are aware of the need for settled status.

Gerwyn says: “It’s important for employers to communicate to their employees their value to the organisation and just how easy and free of charge the digital process is. It requires fifteen minutes of their time and there is a very generous deadline of June 2021, if we get the deal, or December 2020 under ‘No Deal’.

He emphasises: “The uncertainty EU citizens will have felt after the referendum result is unnecessary as they will have the right to live and work here indefinitely under the settled status document.”

Though the announcement of the settled status policy may be a relief for EU workers after years of uncertainty, employers should not simply leave their employees to it. They may be able to offer practical support in the application process, along with, perhaps more significantly, emotional support. The latter may prove crucial for employers hoping to retain top EU talent in their workforce.

Gerwyn recommends that employers “help with the process in terms of making use of facilities and IT equipment – and make [EU workers] feel valued by the organisation.”

The impact on future migration

Much more complex for UK businesses is the impact of the new immigration policy on future recruitment from abroad.

IPPR’s research suggests that if the suggested conditions were applied to EU workers currently living in the UK, around 75% wouldn’t meet the requirements. That 75% of current workers can still get protection under the settled status programme, but the requirements – the £30,000 salary requirement and medium-skills threshold – will certainly impact EU immigration after Brexit.

Businesses and sectors which currently rely on EU workers to make up their workforces will have to adapt to the new skills-based system. Gerwyn Jones (CIPD) suggests employers look to the exceptions built into immigration policy.

“There are some loopholes,” Gerwyn says. “One of them is the Youth Mobility Scheme, which allows all 18-30 year olds to live and work in the UK for up to two years. Organisations may want to try and attract those younger workers, perhaps through social media.”

Reminiscent of similar schemes in countries like Australia, the Youth Mobility Scheme may particularly suit sectors like tech and the creative industries, where adventurous young workers might look abroad for inspiration in their field.

How else can UK businesses which rely on immigration adapt to the new system? For skilled workers, Gerwyn Jones suggests that employers learn to look beyond the EU. “The new system might deter EU nationals from coming to the UK because the other EU countries and economies across Europe have free movement and are flourishing just as well, such as Germany and Holland.

“But it will also be easier to recruit non-EU workers from 2021, which I think has gone underreported. One might expect high levels of recruitment from Commonwealth countries in particular – doctors from India and Australia and South Africa, for example.”

Migrant entrepreneurs in the UK

Another potential solution – or at least, partial solution – to the fears of a skills shortage in sectors like construction is for the government to empower migrant entrepreneurs to open businesses in the UK. New immigration policies have so far focused on migrant workers and have somewhat neglected migrant entrepreneurs.

Gerwyn Jones says: “The Home Office needs to open up a new route, potentially, for entrepreneurs to come to the UK alongside the current routes they’re mapping out for employees. This will be especially important for sectors such as construction where EU nationals from Poland have come over and set up their businesses and been very successful.”

Without freedom of movement and the preferential status EU citizens have enjoyed thus far, EU migrant entrepreneurs will effectively face the same conditions as Non-EU founders. But that does not make founding a business in the UK impossible: Brazilian entrepreneur Rafael dos Santos, founder and CEO of the tech PR platform, High Profile Club, considers the UK to be particularly welcoming of migrant entrepreneurs, despite current rhetoric.

“I see entrepreneurship in the UK as way more positive than most people,” Rafael says. “I never felt that I was in any way discriminated against or that someone would buy someone else’s products or service because I’m Brazilian. My experience, and my experience of helping other migrant entrepreneurs, has been that the government is super supportive.”

After the UK leaves the EU, Rafael does not foresee any fundamental change to that openness. He says: “After Brexit, if we leave the EU, it is very difficult to predict how things will be. But, for example, I’m a member of the Institute of Directors. It’s a very welcoming, open network. And entrepreneurs’ personalities are friendly, we help each other. So, it’s difficult to think that there will suddenly be no support after we leave the EU.”

That is not to say that migrant entrepreneurs have it easy. Rafael says: “Obviously it is more difficult currently if you’re not from the EU, but there are other things too – you need to learn the language, the vocabulary, the culture, the ways of doing business.

“The other thing is that if you’re born in the UK, by the time you start a business you have a support network around you. If you’re a migrant entrepreneur, you don’t – you have to build that up, and it takes two to three years to build a really good network around you. You have to be way more resilient and you have to push harder as a migrant entrepreneur to get your business off the ground in the UK.”

Looking forward

Where does this all leave UK employers trying to plan for the future? Despite the white paper, so much of Brexit remains unclear and uncertain. Gerwyn Jones (CIPD) predicts an increase in Non-EU migration, a decrease in EU migration, and a net decrease in total migration from 2021. He also forecasts some risk of skills shortages.

“The prevalence of skills shortages has been exaggerated in the recent past – around 10% organisations are at risk of genuine skills shortages. But this is still the worst level in a generation, and that will worsen when migration becomes stricter in 2021.”

Gerwyn adds: “You will see it’s not just skilled positions – perhaps a bigger problem will be unskilled labour shortages, given that migration restrictions will hit low skill sectors such as hospitality, retail and construction the hardest.”

Finally, Gerwyn cautions against focusing on the negatives: “I think there are going to be winners and losers in this, and the debate has so far been dominated by the losers. But we shouldn’t forget that the performance of the Labour post-Brexit has been remarkably strong.

“We’ve seen record low unemployment rates and wages rising – but what we need above all is a political agreement that gives some certainty to business. The main drag on economic growth of the last few years has been the fall in business investment which is completely understandable given the uncertainty surrounding future trading agreements.

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