Why immigration isn’t working

first_imgRelated posts:No related photos. Why immigration isn’t workingOn 5 Jun 2001 in Personnel Today Previous Article Next Article An influxof immigrants could be the solution to the UK’s skill crisis over the next10-15 years.  But to what extent canmigrant workers resolve labour shortages and how do they fit into the complexpicture of the changing workplace?  JaneLewis reports in a six-page specialThankslargely to the impact of Kubrick’s masterpiece, 2001 has long been a date toconjure with – one of those red-letter years in which anything was onceconsidered possible, a futuristic beacon of times to come. The reality, ofcourse, has been far more prosaic. Here in the UK, 2001 has so far been a dampsquib of a year.Perhapsthe best lesson to be learnt from 2001, therefore, is the inherent danger ofplacing too much trust in future projections – however scientific theirprovenance. As many of the policy experts canvassed for this article havenoted, even the best futurologists can become badly unstuck. While many displayan uncanny knack for correctly identifying key trends they often completelymisinterpret the impact these will have on society. Thus, although it isimpossible not to admire the prescience of Orwell and Huxley for 1984 and BraveNew World – interactive TV, test tube babies, the emergence of the drugculture, and the rest – the nightmarish worlds they thought would result fromthese developments have, thankfully, not happened – yet.Thesame has been shown to be true of many of the more optimistic projections ofthe past. As Stephen Bevan, associate director of the Institute of EmploymentStudies points out, 20-30 years ago futurologists were predicting a rosy futureof leisure for most of us. They thought that the main impact of IT would be toreduce the hours we spent at work. In fact, the acceleration of pace wrought bycomputerisation has had the opposite effect. “Theeconomy now is based on even longer working hours, and some people havevirtually no leisure life at all,” says Bevan. Similarly, as theInternational Labour Organisation’s World Employment Report for 2001 remarks,the onset of the mobile digital era, hailed as the facilitator of a betterwork-life balance for many workers, may turn out to be a double-edged sword.”Far from adjusting working needs to the needs of family life, there canbe a rising pressure to work everywhere all the time,” it states.Soit is with some trepidation that we embark on an analysis of the future shapeof the UK workforce in 10, 15 or even 20 years time when so many highly influentialfactors are as yet unknown. Even taking the broadest possible brush, as theWorld Employment Report seeks to do, it is impossible to predict futureoutcomes with any degree of accuracy. “The prospects of improving theglobal employment situation will depend mainly on whether the current expansionof the world economy can be expected to continue,” it reports. And that initself is hardly a given. “There are many uncertainties, including thetrajectory of the US economy (towards a hard or soft landing), the possibilityof Europe taking over as the global economy’s dynamo, the sustainability ofRussia’s upturn and India’s ability to maintain its high economic growthmomentum.” And that is before you consider the impact that a potentialsuperpower like China may have on world trade and security. ForBritain itself, it is clear that the most important “what if” will bethe extent of our future commitment to the European Union – particularly ifsome of the predictions for 2020 made by the Futures Observatory, a think-tankled by David Mercer of the OU Business School, are given credence. As “thefirst empire built not on military conquest, but on political ideals”(itself a hardly uncontroversial point of view) the think-tank predicts thefuture importance of the EU could extend to it becoming “the worldgovernment of the future”.Onthe whole, the picture painted by the Futures Observatory is highly optimisticacross the board. Life will be better in nearly all respects. We’ll behealthier, live longer and enjoy more control over our destinies. All in all,the projection is for a more “peaceful and prosperous planet”. Withinthe workplace itself, Mercer’s main prediction is the triumph of oestrogen overtestosterone. “It may become known as the ‘women’s century’,” heclaims. “We shall see women, who are better suited to the modernworkplace, taking more of the jobs, certainly at junior and middle managementlevel. We shall also see the spread of ‘feminine’ values – cooperation ratherthan competition – throughout society.”Incommon with many commentators, Mercer places particular emphasis on the impactof an ongoing “major skills shortage” which he believes will have aparticular impact on the relationship between companies and employees.”Organisations will have to market themselves as much to their ownemployees as to their customers,” he predicts. Moreover, this skillsshortage will also necessitate a longer working life for most individuals,”Retirement age will have to be raised to 70″.Indeed,of all the predictions made by the Futures Observatory, this is the one mostgrounded in hard statistical evidence – because it is linked to long-standingdemographic trends that point to a potential time bomb in Western employmentpatterns. The main problem relates to fertility. As the Nobel Laureateeconomist Gary Becker points out, although world population over the past fewdecades has doubled to one billion, birth rates in many high-income countries –including the whole of the EU – have fallen to unprecedented levels. “Theresult is a demographic divide between nations that will have enormouspolitical significance,” he says. Accordingto Dr Wolfgang Lutz, demographic analyst at the Vienna-based EU ObservationCentre for Family Policy, OeIF, with an average 1.45 births per female, some EUcountries are already filling more coffins than cradles and the birth rate iswell below the level needed to maintain the union’s 377 million population. Hepredicts that by mid-century the population could well drop by as much as 20per cent. By 2020, meanwhile, half of the population will be over 50 years old.The impact of this on the health of the European economy and its futurecompetitiveness is likely to be pronounced. Not only will there be dwindlingnumbers of workers to make insurance contributions to finance state pensionsand elderly healthcare, but productivity is also bound to suffer. “Anageing labour force is not particularly innovative or productive,”concludes Lutz, who backs the Future Observatory’s claim that most of us willbe forced to remain in the workforce until we are 70, “merely to supportourselves”.SomeUK commentators have used the seriousness of the pan-European situation as anargument against Britain’s continued membership of the EU. “It is extraordinarythat so many politicians seem obsessed with encouraging further integrationwith Europe when its markets will decl-ine sharply with shrinkingpopulations,” says restaurateur entrepreneur and Sunday Telegraphcolumnist Luke Johnson.Heargues that the UK is better placed than most of its European peers to dealwith the situation. Our future workforce will not fall as dramatically as thatof Italy or Germany – predicted to decline by 40 per cent over the next 30years. And Britain has two further advantages. First, “We havesignificantly greater pension provision than anywhere else”. With 16million UK nationals holding either occupational or private pension schemes, weown 52 per cent of total EU pension fund assets. Second, our fertility rate isstill substantially above the EU average. “Consequently Britain willexperience nothing like the decline in living standards faced by countries likeItaly over the next 50 years,” says Johnson.Butgiven the extent of the perceived skills shortage already afflicting the UK, itis clear to many government ministers that the short-term situation is seriousenough to merit immediate action. Moreover, even if our own long-termdemographic prospects are marginally better than those of our Europeanpartners, the situation is still grave enough. As a report published by theGovernment last year, Winning the Generation Game, makes clear, the UK’scontinuing youth-centric business culture, which has seen retirement at 50become increasingly the norm, has already cost the country dear. With anestimated 2.8 million of 50- to 64-year-olds out of the labour market, theeconomy has forfeited £16bn in lost the GDP since 1979, while the public pursehas had to stump up between £3-5bn in extra benefits and loss of tax.Althougheconomists such as Peter Robinson of the Institute for Public Policy Researchinsist that claims of widespread skills shortages have been over exaggerated,evidence on the ground demonstrates that employers are increasingly concernedabout short-term recruitment prospects. “The service sector is the worsthit, in particular banking and accountancy,” says Jason Cartwrightinternational recruitment manager at TMP Worldwide. The problem is we don’thave enough managers. Today’s managers are the graduates of nine to 10 yearsago. When they left university the country was in one of the worst recessionssince the war and they could only find jobs as taxi drivers.”Accordingto a pan-European survey conducted by TMP, almost half of the 350 managerssurveyed said that the skills shortage was having a severe adverse effect ontheir businesses, and four-fifths believed it was set to worsen. A leadinggroup of industrialists recently lobbied Europe’s ministers to take action tocounter the threat. Toa large extent the problem has been caused by prosperity – healthy economieshave outstripped local ability to supply qualified workers. But other factorshave also played a part. In France, for example, the imposition of a 35-hourweek means that more workers are needed to produce the same economic output.Meanwhile, over-lengthy training periods have spelled delays in gettingvaluable workers to the market in the first place. Themost obvious shortage across Europe is for computer engineers. It is estimatedthat by 2003 there will be a deficit of some 1.7 million IT specialists. Butunglamorous industries like construction and metalworking are also in trouble.According to Miriam Lewis, a construction industry account manager at theEmployment Service’s Large Organisations Unit, “There is a shortage ofelectricians, bricklayers, welders – all the core skills even down tosemi-skilled people like scaffolders and demolition people. Everyone in theindustry knows we need to have commitment to training, but no-one wants to provideit. There needs to be a whole culture change, a whole rethink.”Fewwould disagree. But the real debate centres upon exactly what direction thisrethink should take. Indeed, the Labour Government is itself split on theissue. Some ministers, most notably Foreign Secretary Robin Cook, have come outopenly in favour of tailoring immigration policies to fill the skills deficit.In what has become widely known as his “tikka massala” speech – acelebration of the strength of the UK’s multicultural heritage – Cook claimsthat legitimate immigration is “the necessary and unavoidable result ofeconomic success” and “a condition of growth and prosperity in themodern world”. Thereare many others prepared to sign up to the view that the free movement ofpeople is the missing link in globalisation and, far from costing hostcountries in terms of increased benefit expenditure, actually boosts revenuesand productivity. “Self-selection by migrants is likely to mean they aremore resourceful, entrepreneurial and ambitious than the norm,” saysimmigration minister Barbara Roche. Indeed, some academics, most notablyJagdish Bhagwati, professor of economics at Columbia University, believe thatthe US will remain predominant in the 21st century economy, precisely because”other countries cannot reproduce America’s attitude to immigration”.Butthe political barriers to even a controlled process of immigration in the UKand Europe are huge. Germany was criticised when it announced a specialimmigration programme for 30,000 computer engineers from India – unionsprotested and opponents called the move discriminatory. Consequently the schemewas scaled back. By the end of January this year, fewer than 5,000 workers hadsigned on and most of these had come from Eastern Europe. Moreover, withunemployment still running at 8.1 per cent across Europe as a whole, manycommentators believe it would be “political dynamite” to suggest thatimmigration is the answer to shortages.Thisis certainly the view taken by Cabinet ministers such as trade minister, KimHowells, who believes the emphasis in the UK should be on training indigenousworkers rather than on bringing them in from abroad. Others, most notablyInternational Development Secretary Clare Short, have argued that encouragingeconomic migration would “cream off” high-fliers from poorercountries, where their talents are needed more urgently. ButProf Bhagwati disputes this claim, maintaining that the wealth generated byemigrants invariably benefits their home countries. It was the Taiwanese andIndian computer experts who migrated to Silicon Valley who, in the end, wereinstrumental in building up the industries of their home countries. And somecountries actually bargain on training up more staff than they need, precisely sothat they can export them – Filipino nurses being a case in point.Whatis clear is that all over Europe there are examples of ad hoc arrangements tocircumvent strict immigration laws in favour of a more pragmatic approach. TheFrench economist Jean-Pierre Garson claims that the most innovative approach isbeing shown in the UK, where both public and private sectors have long taken apragmatic approach to shopping around for missing skills. Moreover, theGovernment is often prepared to “drop eligibility criteria and replacethem with fast-track work permits,” says Garson.Meanwhile,research by the Recruitment Confidence Index last year showed that many UKcompanies are achieving this themselves. During the six months to August 2000,more than half the organisations surveyed were employing non-UK citizens –primarily to fill gaps in management positions. Butwith immigrants estimated to make up no more than four per cent of Europe’stotal population over the next five years, it is clear too that drastic actionneeds to be taken on the home front to counteract the demographic time bomb.”We’re going to see a lot of social change, but the underlying theme is afundamental labour shortage which will remain for a long period,” saysJohn Purcell, professor of HRM at the University of Bath.Themost effective short-term means of tackling this is by removing barrierspreventing older men and women from participating in the labour market. Labour employmentminister Margaret Hodge announced in February that the Government intended toabolish compulsory retirement at 65. Meanwhile, by 2006 it will havelegislation in place that effectively outlaws age discrimination. According tothe Employers’ Forum on Age work also needs to be done to scrap inflexiblepension rules which prevent older workers claiming part of their pensions.Ideally, says the EFA, we need to revise the way we see retirement – instead ofbeing an unequivocal cut-off date, it should be phased in gradually in a”decade of retirement” it says.Somecritics, most notably CBI director general Digby Jones, have argued that it maybe irresponsible to employ people over retirement age. Others have suggestedthat older workers are more likely to be in poor health, are more resistant tochange, less creative, more cautious, less responsive to training and moreresistant to technological change. But there is increasing evidence that – hardeconomic realities aside – employers are beginning to warm to the merits of amore diverse workforce.Thependulum is beginning to shift away from the cult of youth, which reached aclimax in the 1990s, when 35-year-old women and 42-year-old men routinely foundthemselves classified as “older” workers. As one commentator remarks,in potentially tough economic times, “employers want to seebattle-scars” and much of the attraction of youthful workers has waned inline with the new economy principles they preached. Ideally, of course, youneed a balance of ages. Predictingfuture outcomes is about as inexact a science as is possible to devise. The onething that seems to unite commentators – despite all contrary evidence aboutthe inherent conservatism of human nature – is a belief that life in 2020, formost of us, will be very different to the way we perceive it now. As John Bank,professor of HRM at Cranfield concludes, the gap between the “haves”and “have nots” both in the UK and across the world generally, is setto increase still further. Butfor those of us in the fortunate position of being able to enjoy it, “Ireally do think it’s going to be a pretty radical future”.Whereshortages hit homeHighemployment levels are proving to be a nightmare for those seeking skilledstaff. This is a snapshot of the sectors most affectedAlthoughthe monthly statistics indicate a slight decline in skills shortages since thelast quarter, nearly two-thirds of firms across the UK and Ireland report theyare continuing to experience problems, says James Reed, chief executive ofrecruitment specialist Reed. “The year-on-year rising trend indicates asteadily increasing problem for business.”Moreover,there is clearly a discrepancy between the figures, which the experts claim areimproving and the experience of those on the ground. A recent survey of 150 topHR professionals at a CIPD meeting showed that 90 per cent identified skillsshortages as a major problem for their businesses.Interms of regions, Reed reports that Thames Valley has now been overtaken bydemands of the fast-growing service sectors in Wales and Ireland and Scotlandwhere between 68-73 per cent of organisations are experiencing recruitmentdifficulties.But,as the Recruitment and Employment Confederation monthly survey points out, thesituation is still tight in the South East, with only 1.6 unemployed peopleexisting for every unfilled Job Centre vacancy.TheREC claims that the most acute shortages have shifted away from technical andengineering skills to support staff. Nearly a quarter of employers saidsecretarial and administrative positions were particularly hard to fill, butonly 17 per cent reported problems with IT.IT sectorAlthoughthe outlook is brightening for IT, there are still key skills in short supply,most notably consultants, technicians, Java, C++ and CRM programmers, softwaredevelopers and Web designers. High-level database skills such as Unix and Linuxare also in demand. A chief problem in recruitment is that the profession isstill seen as a male domain – only 5 per cent of young women canvassed in onesurvey consider entering IT.VoluntarysectorThisis beginning to feel the highest pressure with 67 per cent of thoseorganisations polled having difficulty finding suitably skilled staff, up from44 per cent the previous quarter. “Charities are being forced to be farmore lateral in the way they look for staff,” says a spokesman.RetailThesurvey found 42 per cent of firms are reported as having difficulty fillingsales vacancies.Hoteland cateringPermanentand temporary assistant managers, housekeepers, chefs, waiting staff aretreated as gold dust, despite the downturn caused by the foot-and-mouth crisis.There are currently 30,000 vacancies for chefs in this country.Executive/professionalAbig shortage of graphic designers, and continuing dearth of good managers meanssalary levels continue to rise way ahead of those of more junior staff. The USdownturn has mean that skills shortages in the City – most notably for accountants,bankers and legal personnel – are now easing.Engineeringand constructionThisis considered one of the most critical sectors in terms of a long term shortageof engineers of all disciplines. But there is also a pronounced shortage ofblue-collar workers: bricklayers, crane operators and drivers. The winding downof many apprenticeship schemes in the 1980s and ’90s is beginning to be heavilyfelt.PublicservicesForty-threeper cent report problems recruiting accountancy staff.Teachers:Recruitment ex-perts put the shortfall at around 10,000 nationwide andpredict the situation will worsen because the number of pupils in secondaryeducation will continue to rise over the next four years. This is the mostserious shortage of teachers there has been for at least a decade.Nurses: Estimates suggest that the UK iscurrently short of some 20,000 nurses.Doctors: There is a deficit of some 5,000doctors. Socialworkers: According to a recent survey, there is now a 16 per cent vacancyrate, rising to 20 per cent in London. Comments are closed. last_img read more