Small firms to struggle with new immigration policy, FSB report reveals

Mike Cherry of the FSB

A new report reveals that few small firms can automate processes to cover lost access to EU skills without additional support under the UK’s new points-based immigration policies.

According to ‘A World of Talent’, a new report from the Federation of Small Businesses (FSB), 38% of small employers have struggled to recruit the right staff over the past year, with 35% of these citing the unwillingness of UK citizens to work in their sector as a reason for this struggle.

48% of small firms state that they would be unable to meet the immigration fees currently levied on employers when they hire non-EU staff should they be extended to all workers from around the world.

Previous FSB research shows that 95% of small firms have no experience of using the UK’s current immigration system.

41% of small firms that operate in the professional, scientific and technical services sectors have engaged EU contractors. A similar share (35%) of small firms operating in the information and communication industries have done so.

The new report follows the release of a government policy paper confirming that the UK will move to a points-based immigration system from January 2021.

As part of the new report, FSB recommends that the future points-based system keeps the cost of hiring EU and non-EU staff to below £1,000 for small businesses and exempts smaller firms from the Immigration Skills Charge.

It also recommends the new system includes a special visa for social care workers to help address the severe personnel shortages in that sector – acknowledging the fact that it will take 15 years to train enough UK citizens to address that shortage – and pilots a visa for remote communities that struggle to recruit talent, including those within popular tourist destinations.

Further, it should include a Global Talent visa which allows the self-employed to come to the UK without a job offer; removes any unreasonable barriers to UK entry for overseas contractors who bring flexible access to sought after skillsets.

As well as recommending that the system is tested and is able to meet the needs of small firms before it goes live, the FSB said it should encompass an urgent review of the Innovator Visa, which has been granted to just 14 individuals since its introduction last year.

FSB National Chairman Mike Cherry said: “Small firms want to upskill their workforce, improve productivity and bring through the next generation, but they need support to make that happen.

“It’s critical that the upcoming Budget and Spending Review are seen as an opportunity to enable more small businesses to adopt digital technologies and automate.

“Equally, a meaningful share of the National Skills Fund should be earmarked for use by small businesses – enabling them to improve the skillsets of their existing workforce will be key to closing our productivity gap.

“With costs mounting – not least those linked to business rates, employment and compliance – the vast majority of firms are not in a position to put substantial funds towards investment. We look forward to working with policymakers on how we can increase take-up of automation and innovation within smaller businesses.

“Infrastructure more widely is vital in this space too, and delivery of this Government’s broadband commitments will be integral to closing our productivity gap.

“Ultimately, we need an immigration system that responds to the needs of our economy. A re-vamped Migration Advisory Committee should work closely with those at the business frontline when deciding on how our immigration system evolves.”