Future of Sourcing - Immigration https://www.futureofsourcing.com/tags/immigration en Brexit: The Impact of Immigration and Trade on the Search for Talent in the UK https://www.futureofsourcing.com/brexit-the-impact-of-immigration-and-trade-on-the-search-for-talent-in-the-uk <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Brexit_Immigration%20624x325.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Brexit_Immigration%20624x325.jpg" title="Brexit: The Impact of Immigration and Trade on the Search for Talent in the UK " class="colorbox" rel="gallery-node-1205-H-ogR3ey8bU"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Brexit_Immigration%20624x325.jpg?itok=41rybGZH" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>As many people know, the UK has voted to leave the European Union effective of Friday, 29 March 2019, with a 21-month transition period. There has been a provisional agreement over three issues, most notably budget commitments and EU citizens&rsquo; rights, and talks have now moved to agreeing on the future relationship between the UK and EU. With this relationship yet to be decided, it is difficult to predict what the UK labour market will look like outside of the European Union and the &lsquo;single market,&rsquo; which guarantees free movement of goods, capital, services and labour for all members. We are, however, able to examine the current impact that single market access has had on the UK to understand the potential repercussions of a &lsquo;hard exit&rsquo; on trade and immigration where no deal is agreed prior to leaving.</p> <p><strong>What does the current UK workforce look like?</strong></p> <p>The UK workforce is saturated with EU workers, a result of EU freedom of movement, which equated to 7.3 percent&nbsp;of all UK employment in 2017. Breaking this down by industry and occupations there are some notable trends. Almost one-third of EU workers employed in the UK sit within the top-three skilled occupational groups (managers, professionals and associate professionals). Looking at the different industries, large proportions of EU workers exist in highly skilled industries such as IT and banking, as well as in lower skilled industries such as manufacturing. Over the past decade, the number of EU workers employed in the UK saw a significant increase and based on available data this trend has continued into 2018.</p> <p><img alt="" src="http://outsourcemag.com/sites/default/files/Brexit_AGS_Image1.png" /></p> <p><em>*2017 figures are an estimate based on Total Industry Employment and Total EU Nationals Employment data.<br />Image property of AGS</em></p> <p><strong>What impact would a decrease in immigration have?</strong></p> <p>Assuming <a href="http://outsourcemag.com/node/651">demand for skilled talent</a> remains at current levels, a decrease in the numbers of <a href="http://outsourcemag.com/node/798">EU workers</a> relocating to the UK due to the loss of freedom of movement would lead to a greater shortage of talent and much more competition among employers. With unemployment currently at just 4 percent, and even lower when focusing on the skilled industries and occupations, there is little available talent in the market. This is already leading to high levels of competition and wage inflation, up 2 percent on the year across the in-demand skill sets. Further falls in the availability of skilled talent could cause even greater sourcing challenges and wage inflation.&nbsp;</p> <p><img alt="" src="http://outsourcemag.com/sites/default/files/Brexit_AGS_Image2.png" style="width: 881px; height: 468px;" /><br /><em>Image property of AGS</em></p> <p><strong>How could Brexit affect international trade?</strong></p> <p>There is a strong chance that Brexit will negatively impact the demand for UK goods and services due to reduced trade with the EU. As of 2017, 45 percent of all UK goods and services exports go to the EU, making it the UK&rsquo;s largest single trading partner. Unless the UK can negotiate a substantial trade deal with the EU prior to the official leaving date, it is likely that the value of UK exports will fall and in turn, so will the level of demand for British goods and services. As overall demand in an economy falls, there is an equal rise in unemployment as the need for workers to provide goods and services declines. The sector to feel the largest impact from this would likely be manufacturing given that manufacturers accounted for &pound;267 billion in exports during 2017.</p> <p>Assuming that Brexit does have a negative impact on trade, this will lead to a fall in the demand for UK goods and services. As a result, there will be less demand for the inputs used to produce these, namely &lsquo;capital&rsquo; and &lsquo;labour.&rsquo; Since 2011, the number of job vacancies in manufacturing has grown exponentially &ndash; up 44 percent. A shock to demand for goods and services in these industries would see this trend reverse and numbers of job vacancies decline. &nbsp;</p> <p><strong>Conclusion</strong></p> <p>Over the past 10 years, the UK has come to rely a great deal on the EU, particularly for its supply of skilled labour and demand for UK goods and services exports. If no agreement is determined prior to the hard exit of the UK from the EU, impacts to the UK could be far reaching.&nbsp; On one hand, reduced immigration could create an even greater labour shortage, which would result in increased levels of competition for talent and heavy wage inflation for UK workers.&nbsp; On the other hand, impact to UK exports to the EU could result in a slowdown that would certainly impact manufacturing, but would ultimately reach to other industries as well.</p> <p>Despite an unknown future, employers who source in the UK can undoubtedly expect to see changes to candidate availability and sector-specific demand over the next few years as the UK adjusts to a world outside of the European Union. Innovation and flexibility in hiring will be of utmost importance as the UK adjusts to its new reality.</p> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/law" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Law</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/politics" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Politics</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/talent-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Talent Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/talent-acquisition" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Talent Acquisition</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/immigration" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Immigration</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Brexit: The Impact of Immigration and Trade on the Search for Talent in the UK - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/brexit-the-impact-of-immigration-and-trade-on-the-search-for-talent-in-the-uk"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/europemiddle-eastafrica" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Europe/Middle East/Africa</a></div></div></div> Thu, 05 Jul 2018 17:24:20 +0000 Alex Springate 1205 at https://www.futureofsourcing.com https://www.futureofsourcing.com/brexit-the-impact-of-immigration-and-trade-on-the-search-for-talent-in-the-uk#comments Immigration worries for outsourcing https://www.futureofsourcing.com/node/651 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Jamie-Liddell-Jan-30-2017-1-420x215.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Jamie-Liddell-Jan-30-2017-1-420x215.jpg" title="Immigration worries for outsourcing" class="colorbox" rel="gallery-node-651-H-ogR3ey8bU"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Jamie-Liddell-Jan-30-2017-1-420x215.jpg?itok=Xa4v2PZ3" width="420" height="215" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Little more than a week into his presidency, and Donald Trump has already taken plenty of steps to ensure that anyone hoping or fearing that his more aggressively populist pre-election promises were merely vote-summoning rallying cries that would be forgotten were he to be elected will have their doubts dispelled. Most immediately controversial - thus far - has been his executive order issuing a temporary ban on immigration from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen, which despite denials from the President and some of his officials is being seen as targeting Muslims, in line with his campaign statement calling for a &quot;total and complete shutdown&quot;of US borders to practitioners of that faith.</p> <p>An American president and government openly discriminating, in 2017, against members of any particular religion, let alone one with well over a billion adherents (including millions of Americans) would be a truly remarkable development, and one with vast ramifications for the world at large. It remains to be seen just how far the Trump administration is prepared to go to back up the new commander-in-chief&#39;s more virulently anti-Islamic stump pronouncements. What is already clear, however, is that Trump is prepared to place immigration reform - perhaps &quot;transformation&quot; might be a better word - at the heart of the first phase of his presidency: along with this executive order, his first ten days in office have seen confirmation that his most notorious campaign commitment - the building of &#39;The Wall&#39; on the US-Mexican border - will also become reality.</p> <p>President Trump is well aware that for the majority of those who voted for him last November immigration is a - if not the - key issue, tied in with unpopular trade deals as the major contributing factor to industrial decline in the battleground states whose voters - predominantly white, blue collar workers - turned to him in their droves. The extent to which these factors are actually responsible for this decline (and, going forwards, to which tackling or even reversing them will have any chance of turning that decline round, in the face of a global automation revolution with the potential to rip up the rule book altogether) is somewhat irrelevant for Trump, who knows that it is the superficial and visible which counts: if he can be seen to be &quot;doing something&quot; about the betes-noires of his core constituents they will continue to love him at least for long enough to get him reelected - if that is even his ambition at this point - regardless of whether or not his actions have any significant impact upon what those constituents see as being the downward spiral of American industry.</p> <p>This is worrying indeed for the international outsourcing industry (including, counter-intuitively, more than a few homegrown providers), many of whose members now stand in the firing-line at least twice over: firstly, because &quot;doing something&quot; about outsourcing (which in the mind of the average voter is synonymous with &quot;offshoring&quot;, itself little less than treason in many eyes) is a populist no-brainer, and a restructuring of the USA&#39;s trade policies into a more isolationist framework could have serious consequences for everyone in the space (and, of course, for the global economy generally); and secondly because cracking down on immigration could cause severe problems for organisations the success of whose operations in the USA depends upon their ability to bring in key talent from outside the country.</p> <p>The H-1B visa - <a href="https://en.wikipedia.org/wiki/H-1B_visa" target="_blank">as per Wikipedia</a>, &quot;a non-immigrant visa [which] allows US employers to temporarily employ foreign workers in specialty occupations... and requiring the attainment of a bachelor&#39;s degree or its equivalent as a minimum (with the exception of fashion models, who must be &#39;of distinguished merit and ability&#39;)&quot; - in particular has come under significant fire from many observers who see it as open to numerous abuses: such critics charge that outsourcing providers are able to undercut their US competitors (and, of course, in-house/insourced alternatives) by bringing in foreign workers who are paid much less than their American equivalents. This is, of course, a biased perspective and the H-1B program is not without its merits; nevertheless, it&#39;s the sort of high-profile, controversial target which Trump could tackle boisterously to much cheering and the waving of flags, without having to discuss the issues which led to its adoption in the first place and which are hardly being wafted away by all those flags: an ongoing skills shortage and the ability of specialists in places like India, China and many others to provide good work at a fraction of the cost.</p> <p>Clamping down on immigration, the offshoring of work and anything else affecting the ability of the average Joe in the USA to get a job will only stand a chance of benefiting the national economy if the solutions are correctly thought through. In the case of the H-1B visa, for example, enterprises need certain work done and outsourcing providers are able to ensure that it is carried out well at an acceptable cost; pulling away that visa program will be akin to yanking away the carpet underneath the feet of those organisations unless they can find replacements to fill those roles at a cost which isn&#39;t prohibitively high, otherwise either the work doesn&#39;t get done - catastrophe - or their wage bills go through the roof - less catastrophic in the short term but a significant problem nevertheless, and inflationary at a macro level. Are the skills available in the USA to mitigate a serious assault on white-collar, as well as blue-collar, immigration? The debate is ongoing. What isn&#39;t really up for debate is that with every increase in uncertainty in this area the value of automation is enhanced - the more work that can be done by robots, the less exposed employers are to volatility in the talent arena (who cares who Trump does and doesn&#39;t let into the country if none of the employee base is a human anyway?) - driving more and more work ever further into the electronics arms of the robots, and ever further away from disgruntled, Trump-voting wannabe-workers in the Rust Belt.</p> <p>Joining me on my panel for <a href="http://outsourcemag.com/event/outsource-talks-episode-10/?instance_id=2643" target="_blank">the first Outsource Talks webinar of the year</a> (Weds Feb 15, 10am Eastern/3pm UK: <a href="https://sourcingindustrygroup.webex.com/mw3100/mywebex/default.do?nomenu=true&amp;siteurl=sourcingindustrygroup&amp;service=6&amp;rnd=0.1785272460283679&amp;main_url=https%3A%2F%2Fsourcingindustrygroup.webex.com%2Fec3100%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b0000000266ba6f59c4dbc7074c2321dbd5c49f9b96673fc76fe147cb613e2aef2a5c1db6%26siteurl%3Dsourcingindustrygroup%26confViewID%3D1758907069%26encryptTicket%3DSDJTSwAAAAKtxrLERZVvVd6sdLFed88qVnoD5Y6NsvbHwHszGih4sA2%26" target="_blank">register here</a>) will be, among others, Simon Boardman of US onshore BPO and ITO provider Eagle Creek, a passionate opponent of the H-1B system who will be keen to engage any attendees on the topics of immigration, visa reform and anything else impacting this area. While we don&#39;t, of course, have set themes for Outsource Talks, we&#39;ll definitely be devoting a portion of the show to this discussion, so if you&#39;d like to participate - or simply listen in - join us then: you can send your questions to the panel to me in advance of the show at <a href="mailto:jliddell@sig.org">jliddell@sig.org</a>, which is also where I will be happy to take any ideas you may have for articles on this topic - a topic which I expect will only grow in prominence over the course of the coming months and years.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/strategy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategy</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/offshoring" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Offshoring</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Automation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/trade" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Trade</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/immigration" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Immigration</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Immigration worries for outsourcing - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/node/651"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Mon, 30 Jan 2017 13:00:10 +0000 Jamie Liddell 651 at https://www.futureofsourcing.com https://www.futureofsourcing.com/node/651#comments