Question Daniel Dennehy Business & Management

Will disclosing percentage of foreign workers help with UK nationals' unemployment levels?

Will Amber Rudd's proposed requirement for Businesses to declare how many foreign workers they employ help with 'UK nationals' unemployment levels?

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Answer Internal Staff

Firms could be forced to disclose what percentage of their workforce is non-British as a way to encourage them to hire more locals. Currently, there is an existing Resident Labour Market Test (RLMT). An employer can only sponsor a non-EEA migrant for employment if a RLMT test has been conducted and there is not a suitable settled worker, British citizen or EEA national that can fill the post (Sherghill, 2015). Amber Rudd believes that this should be toughened up.

Companies recruiting from outside the EU could be required to demonstrate what they have done to foster a pool of local candidates. It is expected that this will give a clear incentive for businesses to properly consider the merits of British candidates or to spend more on training to equip them. Whether this will actually incentivise businesses remains to be seen, although at the moment this proposal has been met with backlash from businesses for its discriminatory nature (The Guardian 2016). Also, companies may refuse to publish a breakdown of the nationality of their workforce.

A major issue with this proposal is skills gaps. The argument here is that British companies do so much in the UK to train up their workers and look for UK hires before going overseas. In fact, they invest £45 billion a year training workers in the UK, but there are skills gaps and if firms do not fill them they cannot grow (BBC 2016).

To conclude, whether this proposal will help with UK nationals’ unemployment levels, depends on how this will be regulated. Businesses have already voiced their concerns and it depends on whether they will be willing to be penalised for filling the skills gaps by recruiting from overseas.

References

BBC (2016) Businesses react to Conservative plans for listing foreign workers. Available from: http://www.bbc.co.uk/news/uk-politics-37563064

Shergill, J. (2015) 5 things you need to know about the Resident Labour Market Test. Available from: http://www.turbervilles.co.uk/blog/5-things-you-need-to-know-about-the-resident-labour-market-test/

The Guardian (2016) Amber Rudd faces backlash from businesses over foreign workers. https://www.theguardian.com/business/2016/oct/05/government-faces-backlash-from-business-leaders-over-foreign-workers