Top Banner
CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET WRITTEN RESPONSE: SCOTTISH CHAMBERS OF COMMERCE NETWORK MIGRATION ADVISORY COMMITTEE
18

CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

Oct 06, 2020

Download

Documents

dariahiddleston
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

CALL FOR EVIDENCE: EEA-WORKERS IN THE UK LABOUR MARKET WRITTEN RESPONSE: SCOTTISH CHAMBERS OF COMMERCE NETWORK

MIGRATION ADVISORY COMMITTEE

Page 2: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

2

About the Scottish Chambers of Commerce Network

Scottish Chambers of Commerce (SCC) is Scotland’s largest business network. SCC brings the

views of the business community together, forming a clear and powerful expression of

Scottish business opinion through its network of 26 accredited Chambers of Commerce,

representing 11,000 members.

Introduction

Scottish Chambers of Commerce welcomes the opportunity to respond to the Migration

Advisory Committee’s call for evidence on the impact of EEA workers on the UK labour

market. Whereas colleagues at the British Chambers of Commerce will provide a

response focusing on the UK labour market as a whole, the following response will focus

primarily on the Scottish context.

Although this submission forms our written evidence for the Migration Advisory

Committee, we would ask that the oral evidence of Scottish businesses and associations,

heard during the SCC hosted engagement with the Migration Advisory Committee in

Edinburgh on 20th September, are also considered as part of this submission. This session

focused on several issues, including the current difficulties experienced in agriculture with

recruiting seasonal workers.

Context

Following the result of 2016’s EU Referendum, one of the issues that businesses expressed

most immediate concern about was the right of business owners and workers who are

European Union nationals to continue to live and work in the UK. Businesses in Scotland have

become accustomed to the free movement of labour within the EU single market and have

tapped into this availability of talent to make sure their business has the people and

workforce it needs to operate and grow their business. A number of Scottish businesses are

reliant on the skills of EU workers across a range of sectors, including agriculture, food

processing, hospitality, healthcare, manufacturing, financial services and retail.

Since the referendum, businesses have been seeking clarity on the residency and

employment rights of EU workers and, indeed, foreign workers more generally, with a

priority on the following;

a) the short to medium term rights of EU citizens currently living and working in

Scotland;

b) what will happen during any transitional period following Brexit;

c) the medium to long term policy for future immigration to the UK.

None of the above issues have yet been formally resolved by the UK Government. Indeed,

we are aware of reports that the level of enquiries and applications to the Home Office

regarding work and residency rights of EU nationals is significant. Over 3 million European

Economic Area nationals are currently in the UK and the systems must be able to cope with

the high volume of enquiries from these individuals as well as dealing with migration from

Page 3: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

3

non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer

from the UK Government in terms of securing the rights of existing EU workers but we

require an early deal between the UK and EU on this issue at the earliest possible stage of

the negotiation process governing the UK’s exit from the EU. In terms of long term

immigration policy, we believe that this must be determined and driven by business and

economic need.

An early agreement on EU workers’ rights is essential because business needs to understand

the impacts of the Brexit vote on the labour market and how immigration policy must change

to accommodate this. Businesses are already reporting changing patterns within the labour

market in terms of the availability of workers and we need to understand this and plan

transitional arrangements accordingly.

The Scottish Government must start planning now to ensure that skills budgets for the next

decade are being geared towards the developing needs of businesses. It must be considered

that any decisions taken on future skills policies and direction require time for adjustment.

Once a decision is made, it can take many years to educate young people and individuals on

the new opportunities and inspiring the workforce to enter sectors they may never have

considered before will have to be tackled.

We must ensure that more of our domestic supply of labour is equipped with the skills that

businesses need and that will require extended provision for the retraining of those both in

work and outside of work at all age levels. There is a real possibility that domestic skills

funding may need to increase if access to international workers becomes restricted.

The Model for Future Immigration Policy

The issue of the UK’s ability to control immigration was undoubtedly an important factor in

the EU referendum debate and it is clear that the current UK government considers that

future UK policy in this regard should be to set a target for annual net migration into the

UK as a whole. Whilst the Scottish Chambers of Commerce network believes that the setting

of such targets can be a reasonable approach, the real question is how these targets should

be determined. The SCC Network believes that annual migration targets must not be

determined arbitrarily; instead, they must be flexible, agile and evidence based. Our

contention is that future migration targets should be determined through detailed

engagement with businesses across the UK in order to understand their skills needs,

including which talents can be sourced domestically and where these require to be brought

in internationally. Consideration should also be given to where in the world the talents that

businesses need can be found. This will enable better, more targeted marketing of UK

businesses’ requirements, where they are seeking talent in international markets.

In determining the UK’s overall skills requirements from overseas, it will be necessary to

reflect both sectoral business needs and regional demographics. In these respects, Scotland

has very particular needs. Whilst UK immigration rules already recognise some limited

flexibility in terms of certain business sectors – for example, oil and gas businesses are able

to bring in to the UK overseas workers from other parts of their business – further

Page 4: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

4

consideration of sectoral needs will be required in order to define the UK’s overall migration

needs and targets.

As a first step, the UK Government and HMRC must produce data to chart the geographic

spread of foreign workers across the UK. This will help to identify concentrations of sectoral

skills needs across the country, for example financial services workers in Edinburgh,

agricultural workers in Angus, oil and gas workers in Aberdeen & Grampian, and tourism

workers in the Highlands and Islands. Work must then be done to anticipate the future skills

demands of businesses in these areas and to plan for meeting these demands from both

domestic and international sources. It must be remembered that EU workers currently fill

many very highly skilled roles in the likes of the food and drink, oil and gas and hospitality

sectors.

The Scottish Chambers of Commerce network does not believe that devolution of

immigration powers to Scotland is necessary to achieve a business solution to migration

targets, but sectoral and geographical factors are central to the ability of a UK-wide

immigration policy to meet business need. However, consideration must be given as to how

this can apply within and between the constituent parts of the UK, and here lessons can be

learned from other countries with geographically differentiated immigration systems such

as Canada and Australia.

In terms of demographics, Scotland’s projected population growth to 2024 is only 3.1%,

compared to a projection of a 7.5% increase for England over the same period. Such a

deficit, if unaddressed by migration, could have implications for Scotland’s ability to grow

our economy and fund our public services. This is particularly true under the devolved

taxation settlement, which assumes that, all else being equal, Scotland’s economy will grow

at a similar rate to the UK as a whole. This may be more difficult to achieve if Scotland’s

population – a key factor in economic growth – is rising at less than half the rate of England.

In Scotland, hospitality and agriculture benefit from migration, as do many other sectors,

and regions such as Borders are acutely aware of the need for a diverse population to support

its growth, including development of young entrepreneurs and access to international talent

to support its sectors. The reintroduction of the post-study work visa or worker talent

schemes can offer additional routes for businesses to access the talent they need.

Impact of EEA Workers: UK Level Data from Workforce Survey

To inform our response, find attached data, initially on a national level derived from the

British Chambers of Commerce Workforce Survey.

This annual workforce survey is based on the responses of over 1,400 businesses.

The survey found that 48% of firms had faced skills or labour shortages over the last

twelve months. Of these, most sought to address the shortages by increasing investment in

recruitment (35%), training (31%) and, pay and benefits (29%).

At a UK level, the survey found that only 8% of businesses target recruitment of non-UK

nationals overseas.

Page 5: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

5

According to the findings of the survey, two-in-five (40%) UK businesses have employees

from other EU countries on their workforce, while 23% have employees from outside the

EU. 38% of businesses say future restrictions on the rights of EU nationals to work in the

UK would have a negative impact on their business.

Additional relevant findings:

• 50% of businesses receive job applications from EU nationals and 30% from non-EU nationals

• Firms report that their non-UK workers have diverse skills sets: 42% skilled manual/technical, 37% professional/managerial, 35% un-/semi-skilled and 23% clerical/administrative

• 20% of businesses say they would respond to potential future restrictions on EU nationals to work in the UK by focusing recruitment on UK workers, while 15% don’t know how they would respond.

It is worth emphasising the final point that 15%, a significant proportion of businesses, were uncertain as to how they would react or respond in any sense a shortage / potential restrictions of EEA workers in the labour market. Attached below is an infographic summarising the response to access restrictions. There are some additional concerns illustrated here, with 7% of businesses stating they would need to relocate at least a portion of their operations in response to restrictions, and a further 6% stating they would need to downsize their business to react to this.

Page 6: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

6

Scotland Specific Results from the Workforce Survey

As highlighted in the most recent Labour Force Survey, Scotland has a slightly higher

proportion of EEA migrants in the labour force when compared with the UK average,

recorded at 8% in comparison with the UK average of 7%.

In terms of Scotland specific data, the BCC survey includes responses from approximately

100 Scottish businesses. In this section, we provide an overview of their responses split

out from the national sample.

As an initial point to set context, it is interesting to note that 51% of the Scottish sample

had noted skills or labour shortages in their organisation over the past 12 months. This is

reinforced by data from our Quarterly Economic Indicator, which has identified

recruitment difficulties as above trend in the Scottish economy for several quarters.

Only 7% of these businesses in difficulty sought to resolve these issues by recruiting

additional workers from outside of the UK. However, a significant proportion engaged in

practices that may have diminishing returns, or that are potentially negative to the labour

market / wider economy in general.

0% 10% 20% 30% 40% 50% 60%

Don't know

No

Yes

Over the past 12 months, has your business faced skills or labour shortages?

Page 7: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

7

As an example, 37% of Scottish respondents were retaining older workers as a strategy to

avoid labour shortages. Whereas this strategy may provide returns in the short term, this

acts as a potential indicator of concern if businesses are unable to recruit replacements

from the domestic labour market. The retention of older workers suggests potential issues

with knowledge management and succession, with firms unable to find the skills they need

in the domestic market. Although it isn’t certain that EEA workers would be able to

ameliorate this issue, it’s unlikely that there would be any positive effect from reducing

the overall pool of skills and labour available to businesses with these difficulties. It is

also worth noting that this figure is significantly higher than the average, with only 24% of

firms employing this strategy across the UK.

A further 13% have responded by downsizing or changing their business model significantly,

illustrating the effect of the historical high employment rate in restraining company

growth. This, in line with the finding that 22% of firms are increasing investment in

automation, suggests that the impact of the current shortage on organisational practices

may be somewhat pronounced.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other, please specify

No action taken

Targeted recruitment of non-UK nationals…

Downsized or significantly changed business…

Retained older workers

Increased pay and benefits

Increased investment in automation

Used self-employed workers/contractors

Outsourced work to other companies

Used inter-company transfers of staff

Developed relationship/pipeline with local…

Increased investment in training

Increased investment in recruitment

Over the past 12 months, how has your business sought to address skills or labour shortages shortages?

Page 8: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

8

It is worth noting that of the firms contacted, many are still engaging in traditional

recruitment practices which may restrict the use of EEA workers. For example, none of

the firms in our Scottish sample engaged with recruitment agencies based either in the EU

or in the Rest of the World. Word of mouth is still used by over half of surveyed firms as a

recruiting tactic, suggesting that many vacancies are being filled through leveraging local

networks. The preference for local newspapers vs national also suggest this, although it

is unclear from our data how much of these decisions are based on economic circumstance

versus optimum communication method.

As demonstrated by this initial chart, approximately a third (32%) of Scottish businesses

covered in this sample are receiving 10% or more of their job applications from the EU.

This compares to 8% for the Rest of the World.

0% 10% 20% 30% 40% 50% 60%

Other, please specify

None of these

Use recruitment agencies based in the UK

Advertise in trade publication or national…

Advertise in local newspaper

Word of mouth

Contact JobCentre

Post job adverts to online job search website

Post job adverts to company website

Which of the following approaches does your business typically take to fill job vacancies?

0%

20%

40%

60%

80%

0% 1-9% 10-19% 20-49% 50-79% 80-100% Don't know

Approximately what percentage of job applications for roles within your company come from the EU or rest of the world?

Page 9: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

9

Exactly half (50%) of the Scottish sample employed at least a small percentage of EEA

workers in their labour force. In contrast, this figure is approximately 22% for workers

from the Rest of the World.

There is a core of firms that are employing a significantly higher level of EEA workers,

with 10% of our respondent base reporting their workforce has an EU worker proportion of

20% or more.

0% 10% 20% 30% 40% 50% 60%

Don't know

80-100%

50-79%

20-49%

10-19%

1-9%

0%

Approximately what percentage of your organisation's employees are from other EU countries (i.e. non-UK)?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Don't know

Un-/semi-skilled

Clerical/administrative

Skilled manual/technical

Professional/managerial

How would you describe the skill levels of the non-UK employees in your business?

Page 10: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

10

In terms of skill level, it is clear that a significant proportion of the EEA workers employed

by our Scottish sample are engaging in skilled work, with professional / managerial and

skilled technical work each accounting for a third of employed individuals.

As with some of our earlier findings, this presents cause for concern if these workers are

situated in professions without a significant domestic pool of labour.

When asked to evaluate the overall impact of migration rights restrictions into the UK,

firms were split on the impact. The majority (49%) expressed that restricting access

would cause at least a slight negative impact on their business. However, a significant,

but lesser proportion (43%) stated that restrictions would have no impact on their current

workforce.

Aside from the data suggesting that around half of our respondent base would experience

a business impact without access to this labour market, there is further concern in that

almost 10% of our sample are unclear of the impact on their business. Given the current

uncertainty around future restrictions and labour market access issues, it is perhaps to be

expected that businesses are unsure how they would be directly affected by this issue.

None of the businesses in our sample expected restrictions to have a positive impact on

their operations.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Don't know

Significant negative impact

Slight negative impact

No impact

Slight positive impact

Significant positive impact

What impact, if any, would any future restriction on the rights of EU nationals to work in the UK to have on your business?

Page 11: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

11

First of all, over half (58%) of respondents stated that they are either unaffected, or

unsure of how they would respond to further restrictions. We then have a core of

businesses that are pursuing options that focus on domestic investment (18% focusing on

UK workers; 10% focusing specifically on apprentices; 5% investing in training), against

another group engaging in practices that focus on structural changes. This includes 6% that

would relocate; and 14% who stated they would downsize or make significant business

process changes.

Nine per cent of the sample would opt to pay additional costs to continue to recruit EU

workers, if this option were made available to them as part of the final UK-EU

arrangement. Of course, this assumes additional cost to businesses and a resultant effect

on overall profitability, affecting their ability to invest in other activities.

Our data also highlights another group that would engage in practices with limited long-

term viability. As with our evidence on how businesses are coping with current staff

shortages, a substantive group (14%) would respond to restrictions by attempting to retain

their older workers. As previously stated, although this may be capable of sustaining

business operations for a considerable period of time, this tactic is inherently limited in its

viability. It could also be expected that these firms would face increased domestic

competition for their more experienced workers in the context of restricted EEA access,

further limiting their ability to retain these employees. This assumes that outflows of EEA

workers would continue to rise in line with the recently observed increase, further

tightening access to the labour supply in the current context of low unemployment.

0% 5% 10% 15% 20% 25% 30% 35%

Other, please specify

My business would not be affected

Don’t know

Relocate business partially or complete…

Downsize or significantly change business…

Plan to retain older employees

Invest more in training

Focus recruitment on apprentices

Focus recruitment on non-EU (rest of the…

Focus recruitment on UK workers

Pay additional costs to recruit from the EU…

How would your business respond, if at all, to any potential future restriction on the rights of EU nationals to work in the

UK?

Page 12: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

12

Few of the businesses in our sample (2%) were considering increased employment from

non-EU countries. As with many of the questions / options in the survey, this data is

limited by the continual uncertainty over future agreements.

Key Themes + Conclusions

From the evidence provided via the workforce survey, there are a number of key themes

which stand out as relevant.

1. The majority of businesses surveyed are experiencing difficulties in recruiting

appropriately skilled labour. Which has translated to increased investment in the

domestic labour force, through training and other initiatives.

2. In a Scottish context, there is evidence that some of the strategic choices made by

organisations to ameliorate these labour shortages may be limited in long term

effectiveness. In particular, our data shows an increased likelihood by firms in

Scotland to focus on the retention of older workers, which may impact on the long-

term prospects of these firms around issues such as knowledge management and

succession planning.

3. A significant proportion of our respondent businesses would react to restrictions in

EEA worker access in ways that would significantly change the structure of their

businesses. Although the largest subset of businesses report that they would not

need to react in any way, 20% of our sample would either restructure operations

significantly, or relocate, in order to respond to these restrictions. As with the

number of firms retaining older workers, this combined figure is somewhat higher

than the UK average.

Generally, our data demonstrates that although a proportion of Scottish firms would not

be affected by restrictions on EEA nationals, there are underlying labour market issues

which suggest continued difficulty in recruitment, and that some of the strategies being

employed by firms to account for these difficulties are limited in their long-term

effectiveness.

As a final point, although the majority of firms stated that internally they would not

require to respond to restrictions in EEA migration, Scotland’s slightly higher proportion of

EEA migrants relative to the UK average could see competition for labour increase

(assuming increased outflows).

Fundamentally, it is clear that there is a degree of dependence on EEA migrants in the

Scottish labour force within the member firms that responded to the workforce survey.

The Scottish Chambers of Commerce would reiterate our prior position that any new

arrangement on migration must recognise the need for employers to access the skills of

EEA area migrants where required as a business need. Although Scotland has some

specific differences in this matter (for example, the differentiated Shortage Occupation

Page 13: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

13

List), our evidence session in Edinburgh clearly showed that concerns exist across a wide

range of skill levels.

Particularly in agriculture and hospitality (as illustrated by our initial case study), there is

a clear need for maintaining flexibility around seasonal workers, which may perhaps

require the introduction of revised Seasonal Workers Schemes to ensure industries are

protected from any short-term shock and drop in labour availability which may present as

a result of the exit decision.

The Scottish Chambers of Commerce would welcome further engagement with the

Migration Advisory Committee on this issue, and can provide additional case studies and

business evidence if required.

Scottish Chambers of Commerce Network: Scottish Chambers of Commerce

Aberdeen

Ayrshire

Caithness

Cairngorms

Dumfries & Galloway

Dunbartonshire

Dundee & Angus

East Renfrewshire

Edinburgh

Fife

Forth Valley

Glasgow

Inverclyde

Inverness

Lochaber

Midlothian & East Lothian

Moray

Perthshire

Renfrewshire

Scottish Borders

West Lothian

Case Studies

To illustrate some potential impacts of migration restrictions, and the current impact of

the exit vote on recruitment, we have included three case studies. One from a hospitality

focused business in Lochaber in the Scottish Highlands, and one from a large food

manufacturing firm in Aberdeen, with included commentary from Aberdeen Chamber of

Commerce. Finally, there is a Chamber level case study included from Glasgow Chamber

of Commerce.

Case Study 1: Hospitality Business in Lochaber, Scottish Highlands

Context:

• Relatively small hospitality business based in Scottish Highlands

Page 14: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

14

• Traditional focus on A8 / EU8 countries for recruitment, particularly Czech

Republic + Slovakia.

• Recruited between 2-4 staff on an annual basis, for seasonal work. These staff are

recruited from hospitality courses at Czech + Slovak universities, through a

recruitment agency. The business owner will accompany an agency representative

to recruitment sessions in these countries. Up until exit vote, average pool of

potential recruits / interviewees was around 100.

• Currently, universities / hospitality course structures in the UK do not allow

sufficient flexibility to meet the seasonal demands required for this business.

What level of skills do these migrant workers have?

Although these migrants work in positions / pay levels that may be defined as “low skill”,

it is relevant that the migrants themselves are studying at university level, and thus hold

higher levels of education that may generally be observed in the occupation / wage level.

Generally, on wages, the member was clear that the broader benefit package should also

be considered when making these classifications. Although pay levels would not be

considered “high” relative to the population, the accommodation package offered to

seasonal workers allows for a substantially lower overall cost of living, and higher take

home pay than may be expected for the salary level.

What would be the impact on businesses in your area if access to migrant labour was

restricted post Brexit?

Immediate impacts would be severely restricted business growth. Currently, despite

advertising domestically for vacancies via Job Centre and other avenues, very low uptake

/ applications from UK nationals. Respondents that were attracted from Job Centre also

tended to be EU nationals – e.g. Lithuanian / Polish.

If it isn’t possible to attract workers in appropriate timescales, one option is simply to

significantly scale down the business to sole trader level. This will have an impact on the

local economy in terms of spending, and on the overall tax take from the business.

Are you noticing any change in the number of EU workers applying for jobs or leaving

current jobs?

Yes. Previously, when visiting Czech Republic or Slovakia for recruitment, around 100

applicants were available for interview. On latest visit, only 20 applicants presented.

Perception is that fewer students are choosing English as their main language track / route

on the course, with significant numbers in this cohort opting to pursue alternative options

in Germany, Austria, Norway & Sweden. This has also been accompanied by both a drop in

speculative applications, and generally a decrease in the perceived quality of candidates.

The concern raised by the member specifically was that from their experience, there has

been a marked shift in language / destination preferences for hospitality graduates

towards European mainland destinations, rather than the United Kingdom. The

Page 15: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

15

implication is that these choices will lead to a more pronounced impact in the future

availability of seasonal workers if they continue this trajectory.

Case Study 2: Food Manufacturing Business in Aberdeen & Grampian, North East

Scotland

Below, a case study on a food manufacturing business in the Aberdeen and Grampian

Region is provided. Alongside this, Aberdeen Chamber have provided a summary of their

overall perception of migration concern within the region, which is also enclosed.

Aberdeen & Grampian Chamber Commentary

In your local economy, which sectors rely to a large extent on the employment of EU

migrant workers?

We have held roundtable discussions with our members specifically regarding migration

and more generally regarding leaving the EU. We have heard from different sectors that

EU migrant workers are significant to many businesses in the North-east. Key sectors

include:

• Fish processing – heavily reliant c50% of workforce in many cases (not seasonal)

• Food processing e.g. – heavily reliant over 30% of workforce in some cases

• Oil & Gas

• Research / Academic

• Brewing and distilling

• Hospitality – high percentage

• Retail – high percentage

What level of skills do these migrant workers have: low skilled, semi-skilled, high

skilled, or a mix?

The level of skills of migrant workers in the region is mixed. It is wrongly assumed that

industries are only securing low paid / unskilled labour. This is not the case:

• Our fishing processors are securing high skilled labour, technically skilled labour

• Oil and gas companies have high quality scientists etc.

Are businesses noticing any change in the number of EU workers applying for jobs or

leaving current jobs?

We have heard evidence that businesses are noticing a change in the number of EU

workers applying for jobs. This anecdotal evidence has been supported by our case study

Page 16: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

16

which highlighted that there has been a change in the number of EU workers applying for

jobs.

What would be the impact on businesses in your area if access to migrant labour was

restricted post Brexit?

The impact would be significant in the North-east with many industries relying on migrant

labour. One of the issues we have heard is that it is unlikely that these positions will be

filled by the local workforce and therefore without EU migrants there would be a

detrimental impact on businesses.

Do you have any case studies to illustrate this?

Yes, please see below one case study of a business in the food manufacturing industry (509

employees).

Of the 509 employees, 340 are non-UK citizens. The diagram below illustrates the

significant proportion of migrant workers from the EU.

What level of skills do these migrant workers have: low skilled, semi-skilled, high

skilled, or a mix?

The table below demonstrates that many of the workers are employed in key roles.

Page 17: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

17

What would be the impact on businesses in your area if access to migrant labour was

restricted post Brexit? [quote from member]

“The impact would be huge and have a detrimental effect on the entire industry. To put

it bluntly, UK workers can’t/won’t do the work so we have to look at out with the UK for

labour, many of our processes cannot be done mechanically so we rely heavily on our

workforce. Restricting migration would be catastrophic, not just for us, but all companies

in the seafood sector. If migration was to be limited, the UK government would have to

relax migration rules for non-EU workers, allowing ‘lower skilled’ workers from countries

such as the Philippines to come and work in the industry. The UK cannot be self-sufficient

if people won’t do the work.”

Are you noticing any change in the number of EU workers applying for jobs or leaving

current jobs? [quote from member]

“Yes, since Brexit was announced our turnover has increased. We are finding it a daily

struggle to attract quality applicants and went from receiving around 10 speculative

applications a day to 1. There has been a significant decrease in application from EU

workers. However, when recruiting UK workers, we have found that either did not attend

the interview or would start with us then leave within a week.”

Case Study 3: Glasgow Chamber of Commerce

In your local economy, which sectors rely to a large extent on the employment of EU

migrant workers?

Glasgow has a diverse economy and there are concerns about the impact across Glasgow’s

key sectors as highlighted in the Brexit and the Glasgow Economy - Impacts, Actions and

Asks’ report published last year:

Specifically we would highlight concerns from:

• Tourism and hospitality

• Financial services (given Glasgow’s role as a top European financial centre)

• Digital and tech

• Higher and further education sector employing over 1,200 EU staff.

What level of skills do these migrant workers have: low skilled, semi-skilled, high

skilled, or a mix?

The roles range from low to high skilled.

Page 18: CALL FOR EVIDENCE: EEA- WORKERS IN THE UK LABOUR MARKET · 3 non-EEA countries. The Scottish Chambers of Commerce network welcomes the initial offer from the UK Government in terms

18

Are businesses noticing any change in the number of EU workers applying for jobs or

leaving current jobs?

Our members are noticing a decline in applications from EU workers as well as more EU

workers leaving current jobs.

What would be the impact on businesses in your area if access to migrant labour was

restricted post Brexit?

Our members have concerns that it would have a negative impact on their business. The

Chamber is concerned that it would impact the city’s ability to attract investment and

new companies.

ENDS