UK Immigration: Firms with EU Workers Are More Likely to Report Growth

UK businesses that employ European Union migrants are more likely to report that their business have seen a boost over the past two years, according to the Chartered Institute of Personnel and Development.

The HR body, which questioned 1,000 employers, found that more than half (51%) of respondents who hire EU migrant said their business have grown.

In contrast, only 39% of firms who do not employ migrant workers said their business has been boosted over the last two years.

The CIPD said this suggests that many employers, as they grow and expand their need particularly for lower skill jobs, may be relying more on migrant workers to fill vacancies.

"Employers have been turning to EU migrants to fill vacancies, particularly for lower skilled jobs, often because they are a bit older and have more work experience than young people in the UK – emphasising the competitive nature of the market for entry level jobs," said Peter Cheese, the chief executive of the CIPD.

"This is a highly charged political issue, but our research shows that many of the negative assumptions about immigration are untrue.

"Employers are making rational decisions to employ more experienced and qualified workers from overseas over less experienced UK workers, or are hiring migrants because there are simply not enough applicants in the local labour market."

The research also revealed that there is "little evidence" to suggest that employers are recruiting migrant workers because they are cheaper than UK born workers or because they require less training.

The survey found that more than one out of ten of employers (12%) said they recruited migrant workers because they have lower expectations about pay and employment conditions.

However, studies have found that immigration into the UK has had a small impact on wages and has had "more significant effects" along the wage distribution, according to the Migration Observatory at the University of Oxford.

Economists Christian Dustmann, Ian Preston and Tommaso Frattini, in their The Effect of Immigration Along the Distribution of Wages report, found that each 1% hike in the share of migrants in the UK-born working age population leads to a 0.1 to 0.3% rise in average wages.

But it also creates a 0.6% decline in the wages of the 5% lowest paid workers and increases the wages of higher paid workers.

Immigration has become a political hot topic in the UK, with almost eight out of ten (77%) people wanting to reduce UK immigration levels, according to the 2013 British Social Attitudes survey.

Youth Unemployment

The CIPD also explored the impact of the increase in migrant workers over the last ten years on the UK labour market and in particular youth employment.

This found that some younger workers are likely to have found it more difficult to find work since EU8 migrants (the 2004 accession countries to the EU) have had access to the UK labour market because EU8 migrants are typically older, more experienced and better qualified.

The report said that both groups are also disproportionately represented in low-skilled work

For example, the CIPD found that almost 90% of EU 8 migrant workers are aged 25 or over, which means that they are likely to have significant work experience.

But the report stressed that migration has only been one factor amongst many in relation to youth unemployment, which dropped to 16.6% in the three months to July.

The findings come after the Office for National Statistics said that net long-term migration to the UK jumped to 243,000 in the year March – well above David Cameron's target of less than 100,000 by 2015.