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UK Economy Competing With One Hand Tied Behind Its Back | IAC Recruit

By David Haylor | 23rd June 2015

Do you run a business? Lead a team, or perhaps organise a group of volunteers? If so then I challenge you to identify a bigger issue than having the right people in place. If you have the right people then you can achieve anything. Motivated, engaged, passionate and appropriately experienced people, when working as a team, are unbeatable.

The UK economy is (in very simplistic terms) one big team, one big business and one big voluntary organisation. Therefore to succeed, the UK needs as many of those motivated, engaged, passionate and appropriately experienced/educated people it can get. Without them the country suffers in the same way as any smaller organisation. It can’t grow, it underperforms, fails customers and takes a beating from the new team with better more motivated people.

As an open trading nation we compete daily with countries around the world. Our companies, our sports teams, our creative industries all compete to outperform and out trade their global competitors. We are currently doing that with one hand tied behind our back. Current UK Government policy seeks to drive down immigration, bizarrely including skilled immigration. An example of which is that the monthly allocation of Tier 2 Visas for highly skilled immigrants reached its limit for the first time this month.

As an example of the issues driving this, one of the Big 4 accountancy firms told us that the majority of their experienced hire vacancies in 2014/2015 were filled by non UK and often non-European citizens, and that is not for want of trying to source people in the UK. This year is highly likely to be even harder.

I know I am biased, I can hear the complaints now. Yes I run a recruitment firm, and yes we place highly educated and trained people from around the world in the UK and other countries, and yes we financially benefit from this transaction. However the other side of the coin is that every day we can see the impact of not having these people. We get a helicopter view of the economy allowing us visibility of skills gaps and the economic impact they have.

The UK Government wants us to train and employ more UK educated people. Well who could disagree with that. However at approaching 5% unemployment, we are arguably near full employment (a level below which you would expect not to drop for various structural and economic reasons). So where are these people to come from? We have skills shortages, in construction, the NHS, finance and technology, to name but a few. Whichever area of specialism we are discussing they all require many years of training, and experience. I don’t particularly want my house built solely by a sixteen year old straight out of school, no more than I would want my annual accounts signed off by an eighteen year old just finishing A-Level maths.

So we are approaching full employment and we already have growing skills shortages. We should undoubtedly strive to constantly push the education system to supply the skills we need, but the shortages are now. If not addressed then salaries will rise quickly, they are already near double digit growth in some niche sectors, followed by inflation. Inflation sounds good right now, it won’t take long for that view to change once inflation becomes entrenched due to labour shortages.

However from my point of view what is even more important is that we are sending our best teams out to play without a full team. We wouldn’t want our women’s football team going into the world cup quarter final with only ten players, and we don’t want to be playing the Aussies in the Ashes with only ten men! So why on earth are we sending our best companies out to compete in the world without the best talent, without even enough people to get the job done to the best standard?

We should encourage and be rightly proud to have hard working, well-educated and/or highly experienced immigrants from around the world wanting to work in the UK. They will contribute greatly to our tax base, both personally but also from the positive impact on the organisations they join. The best people make us more creative, move competitive and ultimately world beating.