Vast majority of small firms have never used points-based immigration system

25 Apr 2017 By Marianne Calnan

Smaller organisations must provide ‘training and development opportunities to upskill staff’ post-Brexit, says CIPD

The overwhelming majority (95 per cent) of small firms have never used the UK’s points-based immigration system to recruit staff, research released today has found, raising concerns about skills and labour shortages post-Brexit.

The report by the Federation of Small Businesses (FSB) also showed that more than one in five (21 per cent) small employers have employees from the EU27 on their books already, suggesting firms might struggle with staffing levels following Brexit.

More than a fifth (29 per cent) of small businesses were worried about being expected to enforce new immigration rules post-Brexit. This figure rose to more than half (56 per cent) for organisations already employing EU citizens.

The FSB’s research revealed resistance towards increased costs of recruiting EU nationals. Three-quarters (75 per cent) of respondents with non-UK staff said they would be unwilling to pay any additional one-off costs to recruit workers from the EU.

Under the Tier 2 visa system, employers will have to pay a £1,000 skills charge for some EU workers they hire after Brexit. Critics have slammed the system, which is part of the Immigration Act 2017 and came into effect in April, as failing to recognise the importance of overseas workers to UK industry.

The changes also include an increase in the minimum salary threshold for experienced workers from £25,000 to £30,000.

However, employers will not be required to show that they could not recruit locally for a post when employing university students switching to a Tier 2 visa, or for companies relocating high-value businesses to the UK, as the Resident Labour Market Test has been relaxed for these groups.

Lizzie Crowley, skills policy adviser at the CIPD, said the FSB’s research highlighted the need for organisations to look at a variety of ways to retain and recruit staff.

“This includes ensuring their reward packages are capable of attracting and retaining staff, providing training and development opportunities to upskill their workforce, as well as ensuring their existing workforce skills are being fully utilised, and ensuring they are looking at reaching wider talent pools,” Crowley said. “Only by looking at these problems in the round can businesses deliver practical solutions.”

Mike Cherry, the FSB’s national chairman, added: “Securing the right to remain for EU workers in the UK must be a priority. It’s also crucial that small firms are given time after the UK leaves the EU to prepare for the new immigration arrangements – there can’t be a sudden cliff edge preventing small firms from accessing the workers they need.

“This means having sensible transitional arrangements first, followed by the phased implementation of a new immigration system.”

In a speech today, the shadow secretary of state for exiting the EU, Keir Starmer, said a Labour government would “immediately guarantee” that all EU nationals who live in the UK would see “no change in their legal status as a result of Brexit”.

“EU nationals do not just contribute to our society, they are our society,” he added.

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