May 15, 2019
The number of non-EU born workers in employment has increased over the past 12 months due to a tightening labour market, according to statistics published this week by the Office for National Statistics (ONS). Figures show that just over a third of the 364, 000 net annual increase in the number of people in work over the past year has gone to people from outside the European Union, although the number of EU-born citizens in work has also risen. The number of non-EU born citizens in employment has increased by 123, 000 during the past year, while there has been a notable quarterly increase of more than 117,000 EU-born citizens.
Gerwyn Davies,senior labour market analyst for the CIPD said: “It is easy to see why employers have turned to non-EU workers in relatively large numbers against the backdrop of a tightening labour market. What’s more, contrary to some recent reports, virtually all of the employment growth during the past year has come from skilled, permanent, full-time jobs.
“This has allowed employers to largely overcome the restrictions they encounter when recruiting non-EU workers that do not currently apply to EU workers. Non-EU workers are therefore playing a key, complementary role in the UK workforce; especially in sectors such as healthcare. Looking ahead, the data may herald a structural shift towards hiring more non-EU workers when restrictions are loosened for non-EU workers and tightened for EU workers from 2021.”
“It is easy to see why employers have turned to non-EU workers in relatively large numbers against the backdrop of a tightening labour market.”
The data also shows that pay growth is showing tentative signs of softening despite strong employment. Average weekly earnings growth, which has been increasing relatively sharply over the past two years, has fallen modestly for the second consecutive month. However low inflation has ensured that real pay growth remains constant at 1.5 percent. A prolonged stretch of inflation beating wage rises is putting more money in people’s pockets.
Davies continues: “The relatively sharp growth in the number of non-UK born workers in employment has also acted as a brake on salaries rising more quickly; especially in shortage occupations. This will come as a relief to employers who have been subjected to increasing pressure from workers to raise pay without accompanying productivity growth. Therefore, unless more firms are prepared to take hit to profits, the prospects for a further boost to earnings growth seem slim without a wider adoption of management practices and technological improvements.”