By Ian Robinson, London Business Hub specialist adviser and Partner at Fragomen LLP.
In his role with the London Business Hub, Ian Robinson is working with SMEs to help them get ahead of changing EU employment legislation this summer.
Figures came to light in January that indicated that the UK was in for the sharpest fall in its population since the Second World War. And London has faced a bigger decline than almost any other area.
From July 2019 to September 2020, the Economic Statistics Centre of Excellence estimated that almost 700,000 people may have left the capital during the same period, which would mean that the population of London has fallen nearly 8% in just over 14 months.
This drop in population highlights the stark reality of the impact of Brexit and the pandemic on London’s foreign workforce. New employment legislation introduced as a result of Brexit has meant that for many workers, continued employment in the UK is simply not a viable option. The pandemic has compounded this by driving foreign workers back to their homelands to weather the pandemic with their families.
However, lockdowns have prevented the full impact of this foreign worker flight from being realised. Swathes of London’s economy have been near mothballed for the past 12 months, and the impact of new employment legislation and this shortfall in employee base has been deferred by lockdowns.
London’s SMEs from sectors as diverse as hospitality and professional services will face a sharp awakening as the economy opens back up this summer if they do not take steps now to adapt their workforce to the new environment.
Get on the front foot
Many Europeans living in the UK still need to confirm their status under the EU Settlement Scheme before 1 July 2021 or risk the hostile environment for immigration, which will place huge limitations on working. Employers need to help them confirm their residence and be ready to recruit from overseas once the economy begins heading back toward full steam.
That is why I am working with the London Business Hub to help London’s SMEs make the legal preparations necessary to avoid a disruption to their workforce this summer.
Employee engagement
Proactive engagement with employees will be key to mitigating the potential disruption to the workforce. SMEs need to quickly identify their European workers and direct them to make applications under the EU settlement scheme before the deadline.
The Home Office will accept late applications but only in exceptional circumstances, for instance where the person was trapped in an abusive relationship. People who forget or do not know about the scheme will not be able to take a new job, rent a new flat, access some health care and more. Without registration on the EU settlement scheme, their lives could be turned upside down.
New sponsorship rules
Moving forward, employers need to be ready for the new immigration system.
In the past free movement allowed smaller firms in sectors such as hospitality, care and retail to recruit and benefit from foreign workers including those considered unskilled. However, changes in immigration law mean that the reliance on foreign unskilled workers is coming to an end.
Employers will be able to sponsor overseas workers, but they will need to take skilled jobs and meet strict salary requirements of £25,600.
This could lead to a major depletion in the potential workforce, and SMEs will feel this acutely.
Firms in sectors with a high reliance on these workers must ensure they understand which of their employees will meet the new requirement and can be employed under the new immigration system. Employers need to have workforce plans in place to mitigate any sudden shortfall in potential employees this summer.
If you need to employ lower skilled workers from overseas, you need to plan for it being near impossible to do in a programmatic way. That is not automatically a bad thing, some employers are already looking at how British people in harder to reach groups can be recruited. It remains to be seen whether there will be enough people available and interested in the vacancies that need filling.
Sponsor licensing
Sponsor licensing is one way that employers can prevent their EU workforce falling off entirely after the 30th June cut-off date.
Sponsor licensing acts as contract between employers and the home office to allow firms to track and monitor foreign workers and ensure they are fulfilling the agreed terms of their visa and employment contract. While it can feel Orwellian, this is a necessary step to take if you want to employ workers from overseas.
Business must move fast to ensure they can get a license. There is likely to be a 2-3 month lead time before you have your licence and can actively start recruiting and making offers to EU workers.
It is key for small businesses to take these steps now to avoid losing their workforce beyond June or having their candidates snapped up by bigger firms.
Looking ahead
The employment landscape has changed drastically since January 1st 2021. While lockdowns and the ongoing grace period have somewhat shielded businesses from its impact so far, it is essential the businesses take steps now to ensure they are not caught off guard this summer.
Source link