Businesses in the UK look for workers from overseas

The National Institute of Economic and Social Research (NIESR) has issued a warning that businesses are becoming increasingly dissatisfied with their attempts to recruit British workers and are turning to international recruitment to fill vacancies.

According to The Telegraph, there has been a doubling in the number of companies seeking sponsorship to hire overseas workers over the past two years, a trend driven by a significant departure of British workers from the job market.

With over 9 million working-age individuals withdrawing from the job market, the economically inactive population has increased by 884,000 since before the pandemic. Despite substantial wage hikes, many of these individuals remain hesitant to fill the more than 900,000 available job openings. Consequently, employers find themselves compelled to seek essential staff from overseas.

"International workers are essentially supporting the labor market in many respects," remarked Max Mosley, an economist at the National Institute of Economic and Social Research, to The Telegraph. "Employers face significant challenges—the conventional tools they have, such as raising wages to compete, are no longer effective."

The number of people receiving out-of-work benefits has surpassed 5 million, a significant rise from 3.5 million in 2015. The Office for National Statistics (ONS) has identified 2.8 million individuals who are neither employed nor actively seeking employment due to long-term illness.

Despite a 6.5% increase in average wages in the year leading up to November, claimants are choosing to remain on benefits for longer periods rather than pursuing available job opportunities, as noted by the NIESR.

According to Home Office data, the issuance of new work visas surged to 169,000 last year, a 50% increase from pre-COVID levels. Moreover, the number of businesses authorized to sponsor visas has more than doubled since 2021, reaching 76,310, indicating the challenges faced by employers in recruiting from the existing UK workforce.

"That's why you might see them turning to international workers. Previously, only around 30,000 companies were registered," explained Mosley. The rapid increase in registered businesses occurred "right at the point when the supply of domestic workers became extremely tight, during the pandemic in 2021," he added, "reflecting firms potentially growing frustrated."

David Miles, an executive member of the Office for Budget Responsibility (OBR), cautioned against the government's reliance on immigration to stimulate economic growth and alleviate Britain's debts.