Business immigration - sustainability of manufacturing from a business immigration perspective.

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Article

25 July, 2023

Mohammad_Chaudhry
Mohammad Chaudhry
Solicitor

Over the past decades immigration and globalisation have had an increasing impact on businesses globally. Migration of highly skilled individuals provides a means of productivity, adaptability, innovation and labour which allow for the maximisation of profit sustaining a growing UK economy.

Brexit and then a global pandemic has had a negative impact on the UK's economy in relation to businesses and manufacturing. This has increased the dependence on overseas workforce to run a smooth and vibrant economy.

Visa Sponsorship

UK has opened its doors for the bright and skilled individuals to come and provide their expertise in their relevant fields.

Many UK businesses now offer Visa sponsorship of employers in the UK allowing migrants to work within the UK as skilled workers for 3 - 5 years before the migrant needs to reapply to renew their Visa. Due to the shortage of manufacturing workers in the UK there has been a rapid increase in businesses registering with the Home Office to sponsor overseas workers increasing by 27% in the last year with 138% increase in the last two years as EU citizens lost the right of free movement.

In recent years there has been a shortage of workers cited at 1.3 million vacancies and unfilled positions across a growing number of sectors; particularly in the manufacturing industry with 36% of vacancies remaining unfilled for periods of time as many people lack the necessary skills and experience compared to the average sector shortage which stands at 24%. The issues within the Labour market have continued to grow since BREXIT and the limitation of free movement as EU citizens can no longer enter the country without a Visa. Visa's for migrant workers is a way which employers are solving these shortages with one in five (21.3%) of manufacturing workers now being born outside the UK, with many migrants being focused within specific areas of the manufacturing industry.

40% of those working in food manufacturing

40% of those working in clothing manufacturing

25% of manufacturers of pharmaceuticals

Productivity

Migrants are more likely to be overqualified for a job and as a result are more productive. In a study conducted by the EU 41% of non-EU migrants were overqualified for the roles that they apply for compared to 20% of national citizens. The discrimination faced by many migrants leads many to apply for jobs which are below their status of qualification inevitably leading to a positive and significant impact on productivity as they do not find their positions challenging. This increase of productivity partially mitigates the 'brain drain' (loss of institutional and technical knowledge) which 97% of national manufacturing firms are concerned about.

"There's more migrants with higher qualifications than UK applicants. … If a machine goes down they're able to fix it straight away, so that means we have less down time." (Manager, Manufacturing, Newport, 11-20% migrants, Large)

Ageing population of the workforce

The manufacturing industry now has an aging population as the employment rate of the older demographic has steadily rose through the last decades meaning in years to come there will be a dramatic labour shortage. Substantial cohorts of manufacturing workers will retire which cannot be replaced due to the decline of birth rates since the 70s leaving the manufacturing industry understaffed. Sourcing immigrants through Visa Sponsorship may be used more frequently in the future to re-populate the workforce as most immigrants arriving in the UK are between 20-30 years old. As around half of highly educated migrant workers in European states only applied for low and median skilled jobs in 2020 meaning many will fill vacant manufacturing positions when necessary.

Summary

Immigration essentially sustains the manufacturing industry, and will have a growing significance on the industries future as birth rates decline effectively resulting in a mass labour shortage of UK born workers. Businesses have begun to rely more heavily upon migrants to fill their skilled worker positions which has resulted in continuously growing new migration to the UK.

For more information contact Mohammad Chaudhry in our Manufacturing & Engineering department via email or phone on 01772220225. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Manufacturing & Engineering department here

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