Skills are central to manufacturers achieving their ambitions on innovation, exporting and growing their business. But such plans are being restricted by problems in accessing the skills companies need. In fact over a half of companies we recently surveyed said a lack of skills was their main business concern.
Whilst businesses are being more proactive in addressing their skills needs (increasing their training spend, recruiting apprentices and engaging more with schools, colleges and universities) sometimes this is not enough and they need to widen their talent pool by recruiting non-EEA workers.
Such employees play a key role in delivering the high-level skills manufacturers need, with a quarter of companies relying on the use of intra-company transfers (ICTs) to bring in new skills to their business and 11% bringing in new skills explicitly by recruiting non-EEA employees.
Manufacturers need to be able to respond to changing markets and circumstances and this is very much dependent on the UK's labour market, which has remained relatively flexible. However there is an increasing concern that such flexibility is being eroded and the recent proposal to introduce a sunset clause of two years for jobs on the Tier 2 shortage occupation list will further these concerns.
Up until now, the shortage occupation list provided some light relief to employers struggling to find highly-skilled engineers. Recruitment problems are widespread with four in five of our members experiencing difficulties recruiting.
This has stemmed from candidates lacking technical skills and/or experience, an insufficient number of applicants and applicants not being eligible to work in the UK. This both suggests that domestic applicants do not always have the skills manufacturers need and that companies cannot always recruit the best candidates because of strict immigration rules that apply.
Employers can, and do, train new and existing employees but what is sometimes needed is a quick, response to changes in demand particularly at a time where skills are scarce. One way to ensure manufacturers do not miss out on opportunities due to a lack of skills in the domestic labour market is to easily recruit highly-skilled labour from outside the EEA.
Going down the Resident Labour Market Test (RLMT) route does offer this rapid response. Far from it. It is time consuming and burdensome and rarely offers real results. It delays recruitment processes and can lead to employers losing the best non-EEA candidates to competing companies. Manufacturers may subsequently face problems in winning and fulfilling orders.
Putting it simply - a sunset clause would have damaging impacts on businesses.
Moreover, the proposed time period of two years is simply not a reasonable amount of time to enable mitigating action to be put in place and be effective. Manufacturers are exerting efforts to alleviate skills shortages but this is a long-term problem. There is no ‘quick-fix.'
In our Route to Growth campaign, we set a benchmark to reduce the number of hard-to-fill vacancies to 20% by 2013 and maintain it at this rate, but if government continues its direction of travel with regards to immigration policy, it seems our chances of meeting this target are looking pretty slim.
To get back on track, the government urgently needs to listen to the voice of business on this issue and review these damaging proposals.