Kim Hoque, Professor of Human Resource Management at Warwick Business School, explores the issue of the labour shortages Brexit may well provoke and advocates that it is time to turn the potential of the UK’s disabled population into a reality.
In December 2018, the UK government unveiled its proposals for a post-Brexit immigration system. The proposals, driven by the government’s perceptions of public concerns about the social and economic effects of immigration, are considered the most significant reform of Britain’s immigration policy in 40 years.
Central to the proposals is the introduction of a new skills-based immigration system and the end of free movement of people from the EU, with the new system making no distinction between migrants from EU and non-EU countries. Although the government proposes to remove the cap on skilled workers coming into the UK, it also proposes to introduce a minimum £30,000 salary threshold. Those coming to the UK for a job paying less than the threshold will be allowed to stay for just 12 months, will not be able to bring family members with them, will not accrue rights to settle, and will have to undergo a 12-month cooling off period once their visa expires during which they will not be allowed to return to the UK for work.
However, the plans, which have been put out to a 12-month consultation, have led business groups, including the Confederation of British Industry, the Institute of Directors and the Federation of Small Businesses to accuse the government of prioritising populist immigration restrictions ahead of economic prosperity, given the labour shortages they have the potential to cause.
An internal migration: the hard road south
While businesses have welcomed the removal of the cap on high-skilled migrants, they are concerned that the £30,000 threshold will remove an important source of labour supply across a wide range of industries. According to the Institute of Directors, the cap could affect around 60 % of jobs at intermediate skills levels. The Confederation of British Industry estimates the government’s plans could prevent nine in 10 firms being able to recruit and retain staff, resulting in significant staff shortages. The Federation of Small Businesses say that seven in 10 small employers rely on mid- or low-skilled staff who would face restrictions working in Britain under the plans.
There are also significant barriers to low-skilled, low-paid workers relocating from depressed parts of northern England, Scotland, and Wales to ease the labour shortages in the south east, where the loss of European workers will hit hardest. Chief among these barriers is the prohibitively high cost of buying a home or renting in the south east, especially for families.
These concerns have in turn been met with arguments that employers should seek alternative sources of labour among the domestic population, by hiring from among marginalised groups or identifying ways to encourage people back into the labour market, for example. Travelodge recently announced it would seek to hire parents by providing work patterns that enable them to meet their caring roles. Last year, David Gauke, the justice minister, argued that boosting the employment of ex-prisoners could play a role in addressing Brexit-related labour supply problems.
Disabled people: Time to turn their potential into a reality
Beyond this, my disability@work colleagues and I have argued in recent discussions across a range of government departments including the No.10 policy unit, the DWP, the Cabinet office and the Treasury, that a focus on increasing the employment of disabled people could also play an important role in reducing post-Brexit labour shortages.
The disability employment gap (the difference between the proportion of disabled and non-disabled people who are in work), remains stubbornly high in the UK at around 30 percentage points, with only 52 % of working-age disabled employees currently being in work in comparison with about 82 % of the non-disabled working age population. This gap is larger than for all other protected groups, and does not compare well with other EU countries. Across the EU as a whole, the disability employment gap is around 20 %. Finland, France, Latvia and Sweden have gaps of around 10 %, while in Luxembourg it is less than 3 %.
As such, we have argued that if employers seek to make their workplaces more accommodating, thus enabling them to draw on the large pool of disabled people within their local labour market who are willing to work but are currently not in employment, this would provide one solution to their Brexit-related labour supply problems.
This in turn raises the question of what employers would need to do to make their workplaces more attractive to disabled people. Employers often express the fear that making the necessary adjustments will be dauntingly expensive and that they lack the necessary expertise, although the Government’s Access to Work scheme offers advice and financial assistance where necessary.
In reality, many of the adjustments disabled people often need are relatively low cost or cost-neutral, and are also increasingly viewed as good employment practices that employers should apply not just to disabled people, but to their whole workforce. Such adjustments include: time off for medical appointments; greater flexibility in working patterns; opportunities (where possible) to telework; flexibility regarding the start and end time to the working day; and, on occasion, additional flexibility in the design of jobs to enable impairment-related restrictions to be accommodated.
A win-win for labour shortages
Should employers implement such practices, they would likely gain not only from having fewer unfilled vacancies, but they would also have happier and more productive disabled employees (as studies from the US demonstrate). They would also gain from happier non-disabled employees, not least those with caring responsibilities, who would also benefit from these practices.
This is, however, unlikely to happen the absence of leadership from the very top of the organisation. There is now considerable research showing that equality and diversity initiatives need to be led from, and championed by, the boardroom, if they are to be sufficiently prioritised for genuine action to be taken across the organisation. Hence, if business leaders are serious about maintaining their post-Brexit labour supply, it is incumbent on them to seek to develop a new culture in which disabled people are viewed as an asset to the organisation and their contribution is genuinely valued, thus enabling them to thrive.
The government is increasingly aware that unless solutions to labour supply problems can be found in the post-Brexit era, the economic consequences will be dire. This is no doubt one reason it is taking the disability employment agenda increasingly seriously.
For example, in November of last year, Sarah Newton, then Minister for Disabled People, called on large companies to reveal the numbers of disabled people they employ, as part of a drive to build a more inclusive society. It is in business leaders’ interests to heed this call not only to address future labour market shortages, but also because there will undoubtedly be increased clamours for mandatory reporting (as has been introduced for gender pay gap reporting, for example) should they fail to do so.
A further example of the government’s increasing focus on the employment of disabled people is recent changes regarding the Social Value Act. Last year, David Lidington, Minister for the Cabinet Office, announced that all Government departments must take social value into account within procurement decisions. One of the ways companies bidding for contracts will be able to demonstrate social value is via the positive treatment of disabled employees and job seekers. This is likely to provide a further strong encouragement to business leaders to engage with the disability employment agenda, given that public procurement contracts are worth in the region of £242 billion per year in the UK. Winning a share of this business may, in future, be dependent on the manner in which they treat disabled employees and jobseekers.
Beyond this, the Government’s main initiative to encourage employers to improve their treatment of disabled people – the Disability Confident campaign – may undergo change. Disability Confident was launched in 2016 as the successor to the Two Ticks ‘Positive About Disabled People’ scheme. Given the process-oriented nature of the scheme, that it is possible for employers to secure accreditation without employing a single disabled person. Indeed, our own disability@work research suggests that neither disability employment rates nor disabled people’s experiences of work are likely to be better in organisations that sign up than in those that do not, suggesting Disability Confident is largely toothless in encouraging employers to raise their game.
Business means society
The signs are that the UK Government’s recent focus on increasing the employment of disabled people is set to continue for some time to come, with the Cabinet Office, in collaboration with the Number 10 Policy Unit, having recently launched a consultation on disability employment.
This is encouraging as it suggests disability employment policy is increasingly being viewed as a cross-departmental responsibility rather than solely the responsibility of the Department of Work and Pensions, but also as it suggests a greater willingness on the part of Government to explore the development of new policy initiatives.
It is of course, not only for labour supply reasons that employers should focus on the employment of disabled people. There are also straightforward moral arguments. Disability equality, as with all equalities issues, is a matter of social justice, hence it is something that all progressive, socially responsible employers should seek to promote. This affects not only job seekers, but also the organisation’s existing workforce, given that most disabilities develop in adulthood once individuals are already in employment.
Business leaders, therefore, have a duty of care towards their employees as they age, enabling those who develop disabilities to stay in work. This requires significant and increased investment in occupational health services to help make adjustments and facilitate reintegration after the onset of long-term health problems or permanent disability.
Nevertheless, a focus on employing disabled people in greater numbers is undoubtedly a key route by which employers can increase their source of labour supply. Should they do so, this may go a long way in helping them address the damaging effects of a curtailment of the supply of migrant workers from the EU in a post-Brexit world.
- For further details on Professor Kim Hoque’s research on disability, visit disability@work
- View Prof. Kim Hoque’s academic profile
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