London’s recruitment challenge

London is undoubtedly a great place in which to work and live. The UK capital is a global hub for business and culture, attracting a growing number of commercial headquarters and strong inward investment.

Yet London is facing a growing recruitment challenge. Figures from LCCI’s Capital 500 survey, which polls around 500 businesses on a quarterly basis, found that 61% of businesses looking to recruit in the second quarter of this year faced difficulties doing so. At the same time, the number of firms looking to hire new staff increased in both quarters of 2019 to date. Four in five London businesses didn’t try to recruit, despite the fact that over 60% of all businesses reported operating below full capacity.

Demand

On a positive note, a quarter of London businesses trained up an existing staff member to address skills gaps, highlighting the part employers are playing to support the workforce to get up to speed with current demand. But more needs to be done to get the right skills into the capital’s pipeline and equip our future workforce with the skills needed for an ever-changing landscape.
Government initiatives such as apprenticeships and T-Levels are welcome steps in developing our talent pipeline, and LCCI continues to play an active role in ensuring that they are fit for purpose. Ahead of their introduction into the workplace in 2020, our polling revealed that two thirds of London business decision makers would not be willing to offer paid or unpaid placements or work to a T-Level student or graduate. This highlights a significant lack of understanding among employers about the benefits of this training route. LCCI has therefore called on the government to boost its communications so that this information reaches industry, and the Chamber’s Work and Education Policy Committee is looking at what steps can be taken to bridge gaps in understanding, as well as the impact T-Levels will have on key sectors.

Gaps

Skilling up our workforce will take time, however, and there are recruitment gaps that need to be filled now. London’s businesses need access to international workers at least in the short to medium term, and our immigration system must reflect this need. Polling released by LCCI in July found that over half of London’s businesses believe the £30,000 salary threshold for migrants post-Brexit, proposed by the previous government, would worsen London’s skills shortages. Two-thirds fear it would reduce the supply of low-skilled labour in London. Whilst political rhetoric has focused on attracting the ‘brightest and best’ talent, it must recognise that vital sectors of our economy, such as health and hospitality, rely on lower-skilled workers.

Fast – track

LCCI has long called for an immigration system to meet London’s recruitment needs, not least because non-UK nationals make up a quarter of London’s workforce, compared to eight per cent in the rest of the country. The LCCI has called for the creation of a Shortage Occupation List (SOL) for the capital to fast-track people and fill specific occupations where the need for overseas workers is greatest. This would give employers a mechanism to report acute skills shortages more swiftly than they would through the national SOL. The Mayor of London supported this proposal at a recent event at City Hall (see pages 4-5), pressing for the capital being able to create its own dynamic SOL. He also reiterated the call on the government to lower the £30,000 salary threshold for the Tier 2 ‘skilled worker’ visa.

Benefits

With the new government looking into an Australian-style points-based system, there are potential benefits for London. LCCI board member Julia Onslow-Cole highlighted the Australian immigration system’s focus on regionalisation at a seminar held in partnership with Fragomen and Migration Matters Trust on the day Boris Johnson took office. There is clear appetite for a regionalised approach. LCCI’s London Tomorrow survey published earlier this year revealed that 56% of businesses identified allowing the capital to set its own immigration targets for people with key skills as one of the three most important matters for ensuring London’s success post-Brexit.

There is no silver bullet to solving the capital’s recruitment challenge. But with a new government in post, LCCI will continue to advocate the key steps to ensuring businesses have access to the talent they need both now and in the future: equipping our workforce with the right skills and ensuring our immigration system works for London.

Nadine Tewfik-Saad, Head of Public Affairs and Esenam Agubretu, Policy Manager


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