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POST-BREXIT: UK EMPLOYERS ARE NOT PREPARED

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Following the CIPD’s recent report, they recommend that the UK government should rethink their current EU immigration proposal to better accommodate business. New immigration restrictions are planned for 2021. Part of the proposal plans are to introduce a £30,000 minimum salary threshold for immigrants from the EU.

The CIPD’s findings, sampled from 2,182 employers, report that more than half of employers are ‘completely in the dark’ about the 2021 immigration proposal. Instead, most employers are focused on the immediate issue of retaining existing EU staff. Furthermore, most employers preferred a minimum salary threshold of £20,000 over the government proposed £30,000. This strategic misalignment between government and business is where the problem arises.

A labour supply shock (leading to higher prices and lower output) is already expected after Brexit from the decreased rate of people entering the workforce. The CIPD is warning that the lack of planning, knowledge, and asymmetry in threshold preferences between interested economic agents will lead to the negative effects of the supply shock being exacerbated. This is particularly undesirable for industries, such as healthcare and nursing, that are already on the shortage occupation list and have been using immigration to help support labour supply.

In response, the CIPD is calling on the Government to consider the following key recommendations:


  1. Merge the planned 12-month temporary visa route with the Youth Mobility Scheme to create a two-year temporary visa route for all workers, to be reviewed in 2025.

  2. Allow for lower salary thresholds to be set for skilled workers based on jobs covered by the shortage occupation list

  3. Make the system more user-friendly through reform of the sponsorship system

For further information on the CIPD’s recommendation, you can read their full proposal here.