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One in 10 employers is planning to export jobs overseas as UK skills base goes into decline

August 22, 2010 -- Employers' groups are calling on the government to rethink its immigration cap as figures today reveal that almost one in 10 private sector companies plan to relocate jobs abroad in the next year.

Companies are looking to export call-centre, IT and finance jobs, according to a study by the Chartered Institute of Personnel and Development (CIPD) and the accounting firm KPMG. Two-thirds of those putting work offshore intend to take jobs to India, a third to China and three out of 10 to eastern Europe. The CIPD warns that more jobs are being sent offshore, and that an immigration cap, imposed too quickly, could have a "devastating" impact on the economy.

Today's research suggests that fears of a dramatic decline in the skills of British graduates and school-leavers are driving employers to look abroad.

Of those questioned, 42% felt the literacy skills of British graduates had fallen over the past five years, compared with just 6% who said they had improved. For numeracy the corresponding figures were 35% and 5%, and for communication and interpersonal skills 34% and 19%. There was a similar pattern when it came to British school-leavers.

Many firms are also looking to recruit from abroad, with one in six saying they will bring in migrant workers in the third quarter of this year.

Gerwyn Davies, public policy adviser at CIPD and author of the report, said the government faced a "complex juggling act". "The proposed introduction of a migration cap comes at a time when many employers are still struggling to fill skilled vacancies despite the high unemployment rate," he added. "The training of local or British workers to fill skilled jobs currently occupied by migrant workers will not happen overnight."

He argued that the current points-based system for immigration, which stops low-skilled workers coming to Britain, is working, and warned that a radical cap imposed too quickly could "choke off" the economic recovery. "It could potentially cut off a labour supply and impede growth in UK companies, which will be devastating given that the government's hopes for reducing unemployment hinge solely on the private sector growing jobs," added Davies.

The cap is a Tory policy announced before the election after the party's MPs said immigration was being raised repeatedly on the doorstep. David Cameron said he wanted net immigration to fall from its current position (163,000 in 2008) to the "tens of thousands".

But the policy is causing controversy, not least with the Conservatives' coalition partners.

During a recent trip to India, Vince Cable, the Lib Dem business secretary, admitted there was "debate" about the policy in the cabinet. Privately, he is said to think it is a "crazy" idea.

Employers say they want to have access to the best workers. "Companies want to hire local people, but they often have trouble finding local residents with the basic skills, drive and attitude needed to help the business succeed," said Adam Marshall, director of policy at the British Chambers of Commerce. He added that the "unintended consequences" of the cap could be widespread.

John Randall, the managing director of Kanes Foods based in the west Midlands, said he had employed migrants first from South Africa and later eastern Europe. He said he had always been impressed by the "work ethic" of the foreign employees.

Critics of the cap say it does not solve the political issue. They say people are nervous about the scale of immigration from both inside and outside Europe. But a limit can only be imposed on non-EU migrants, most of whom are coming for high-skilled jobs.

Sarah Mulley, senior research fellow at the Institute for Public Policy Research, said that such immigration was a "symptom" of the skills shortage in Britain. "The cap will deal with the symptom but not the cause," she said.

But advocates of the cap disagree. Sir Andrew Green, chair of MigrationWatch UK – a thinktank in favour of reducing immigration sharply – said: "The reality is that for every skilled worker imported, that is a British worker not trained. Employers should stop complaining and start training.

"If we make it easy for employers to take skills off the shelf from abroad they have no incentive to train British workers," he added.

Damian Green, the minister for immigration, said the government planned to take net migration down to the levels of the 1990s and said the limit on economic migrants from outside Europe was one measure to help achieve it.

"Businesses are going to have to reduce their reliance on migrant workers as this has done nothing to help the millions of unemployed," he added. The limit will be put in place next year.

Posted by Veronica Silva Cusi, news correspondent
Source: http://www.guardian.co.uk

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