February 2024
In the first episode of our “In Conversation with…” podcast series for 2024 Lucy is joined by fellow Lewis Silkin partner Naomi Hanrahan-Soar.
We need to have a discussion around the purpose of migration in the UK, what do we want from it, and where does the economy sit within it?
Lucy and Naomi discuss the trends behind shifting migration patterns and what that means for the workplace. They explore how employers can harness the benefits of migration, while also addressing a range of challenges.
In Conversation With… Naomi Hanrahan-Soar
Season 4: Episode 1
Lucy Lewis: Hello and welcome to the Future of Work Hub’s “In conversation with…” podcast. I'm Lucy Lewis, a partner in Lewis Silkin’s employment team, and in this podcast series I'll be hosting exclusive discussions with innovators, business leaders and thought leaders to explore their perspectives on the longer-term trends and immediate drivers shaping the world of work.
In 2020/2021, the end of free movement, combined with EU nationals returning to their country of origin during the pandemic, contributed to reduced inward migration and the British economy experienced significant recruitment shortages as a result. But net migration has been at unusually high levels in the past two years, and the Office of National Statistics estimate that net migration to the UK was over 670,000 by June last year (up from about 184,000 before the pandemic).
So, how did we get to a point of record net migration in the UK? How has the government responded and how will that impact future migration levels? What does this mean for the make-up of UK workforces, and how do employers harness the benefit of the increased workforce diversity that migrant workers bring? How do employers manage the challenge that comes from needing to build people strategies in an environment where it can feel like policy decisions on migration are driven by “knee jerk” responses to the political climate?
So, in this first episode of 2024, I'm joined by my fellow partner at Lewis Silkin, Naomi Hanrahan-Soar. Naomi is a partner in our immigration team, and she advises a wide range of employers across a variety of sectors on UK immigration law and issues relating to work migration and global mobility. Welcome, Naomi.
Naomi Hanrahan-Soar: Thank you very much, it's good to be here.
Key drivers shifting global migration patterns
Lucy Lewis: I thought a good way to start the podcast would be to set the scene for our discussion and understand how and why global migration patterns have shifted in recent years and how that's impacted the world of work. Can you start by telling us what are the key drivers that are driving these changes?
Naomi Hanrahan-Soar: Well, migration is something that we've had for centuries, and so we have both common patterns that have been driving that for centuries, and we have more recent influencing factors. So, over many years, we find that the economy is a big influence on how many people are coming, which is fairly obvious. People come to a country in order to get work a lot of the time, so they need to know that there are jobs available and that the pound is strong.
Over history we can see that when the economy is strong, people tend to come to the UK. When it is weak, what we see isn't just people leaving the UK, but also a turn domestically against migration. So, even back in medieval times when there was a recession, we can see the public having an outcry against migration. We also, of course, had the COVID-19 pandemic, which personally I think probably had less impact than you might expect because whilst migration ceased effectively for a short period of time, it came back with a boom. People missed that globalisation.
So, you sort of have these polar opposite effects within it, where some people are staying home and afraid of COVID, or unable to leave, but other people are even more motivated to travel. And the travel ban moved around the world at different paces and different times, and their ultimate impact on the UK migration figures didn't last for very long.
Really, the big influencing factor on UK migration and net migration figures, in particular, has been Brexit and what that means for the change in where migration is coming from, and what kind of migration it entails.
UK net migration hits new high
Lucy Lewis: Actually, Brexit is interesting because before Brexit highly publicised projections suggested that migration levels would fall because of the end of free movement in the UK, and obviously that hasn't happened. So, how did we get to this point where we've ended up with record levels of net migration in the UK? Do you think it will reduce?
Naomi Hanrahan-Soar: Well, it's an interesting question, and of course it's a speculative answer because we don't absolutely know, none of the experts do. When we're looking at migration and what's been driving it, we've got the addition of the A8 and A2 countries, who were the poorer countries of Europe, who came here predominantly to work with the idea of sending money back home, buying deposits for houses or even whole houses back home. And that gave a sort of sudden kick to the free movement. So, all of a sudden, what was a fairly stable number of relatively similar wealth countries as part of free movement, had a huge influx of people, which changed the figures significantly.
But the economists predicted that it would slowly go back to more settled numbers because people from Poland, Romania and Estonia and so on would come, they would work for a few years and then return back again. And we started to see that decline before the referendum. When the referendum happened, we saw a much sharper decline, which we speculated at the time was a combination of both the economy dropping, and favourability dropping - people returning because they were going to return anyway, and people not feeling as welcome to come. That picked up again shortly after that, where European nationals wanted to come in quickly before the end of free movement.
And then we've changed the type of migration we have quite significantly. So, with the end of free movement, everybody, regardless of where you are coming from (other than Ireland) has to come under the same skilled worker system, which means it's no more appealing to hire a European national than someone from further afield. So instead, I don't know why precisely, employers are generally hiring from further afield, and we are seeing much higher migration from countries like India, Nigeria and Pakistan. And that's a much longer way to move, it's a much bigger decision to take as an individual or as a family.
So, we are potentially seeing people with a very different type of migration who may be moving with a more permanent move in mind, rather than thinking, well, I'm only a couple of hours flight from home and I'm just going to go and work for a bit and then go back to my family and the rest of my friends. We also had, of course, the political movements with the British National Overseas scheme from Hong Kong when the political unrest there meant that the government opened up to more migration from Hong Kong nationals with a British background (BNO nationals), and Ukraine nationals.
Those were significant, but they don't amount to even 15% of the total net migration figures. So, it's much more to do with a totally different type of migration, more health and care workers than ever before, because we have massive skills shortages there. And again, those tend to be coming from much further afield, the Philippines and Nigeria in particular, and with them they bring their families.
Long-term impacts and challenges of changing migration flows
Lucy Lewis: Thank you Naomi, we'll come on to talk about skill shortages, I think that is really interesting. But for now, it's so useful to have that as context to the rest of our discussion. We have touched a bit on net migration and obviously that's important, but I know it's not the only thing. So, what other trends are you seeing in respect of migration and are there longer-term impacts or challenges that come from these changing migration flows?
Naomi Hanrahan-Soar: Yes, it becomes a really interesting question about how migration impacts society and the workforce. Because I'm originally Australian myself, I migrated to the UK when I was 21, and I know from Australian history the big impact of different waves of migration on the culture of the country. And I know myself, having to adjust as an Australian national to a different work environment in Britain, that I probably have an impact on the environment around me because I have a slightly different way of working.
So, we are going to see a cultural shift around how we work together, what the different styles are and what that means. We also have not just the impact of the changing face of migration, but different perceptions that individuals have, partly as a result of growing globalisation and the big kick up the bum that COVID-19 did to that. We went from being a slowly globalising society with digitisation happening at a regular pace, and you would find tech companies doing a lot of work from home, but not a lot of other people doing it to the same extent.
Post COVID-19, lots of people can work from home, and so we see a lot of people asking to be a digital nomad and thinking that that's acceptable under immigration laws. We see a lot of people working cross-border, having to consider the different impact of tax on migration and employment. And we have a lot of conversations where we're having to disillusion people, unfortunately, where they think that they're fine to work in the UK or in another country because they're employed outside of that jurisdiction and they're paid outside of that jurisdiction where actually, they are being regulated by the place they're physically sitting at, most of the time.
A few countries have brought in things like digital nomad visas, and that's allowed for a really big shift in who works where. So, for example, a side effect of the end of free movement for the UK, is that Spain gets a lot fewer migrants there because the biggest body of movement of people out of the UK was British people retiring to Spain. So, Spain has been one of the first countries to develop more positive immigration, trying to encourage more immigration and including within that a digital nomad visa, basically making it much easier for a lot of people to move there because they have a gap in the number of people coming.
We also have the skills shortages issue, which has been an ongoing one for many years. We have it in different areas, like tech, where we have a very well paid workforce coming from a lot of countries like the US, India and so on. We also have it in health and care, which is a much more difficult issue to address because these are lower paid roles, which are often really on the borderline of national minimum wage, and which are being targeted within the government's latest round of changes. So, the skills shortages will continue to affect us until we're able to do something about it, but we've been debating what we can do about it for probably close to two decades, and it hasn’t yet been fixed.
UK public opinion toward migration
Lucy Lewis: Yes, I mean, I can see that, and we can all see that the debate over UK migration policy, what it should look like, we can see that intensifying. No doubt it will continue to intensify in an election year. And I agree with you, there does seem to be this apparent tension between those in government that support a more relaxed approach to immigration, that they see that as beneficial to stimulating economic growth, and those obviously advocating for a more restricted approach.
But there does seem to be this inherent conflict between those that want to reduce migration, but at the same time, they recognise there are skills gaps, things that we need to fill to grow the economy. Do you think it's capable of being resolved, or is it just an intractable problem that can't be resolved?
Naomi Hanrahan-Soar: It's a difficult question and a difficult one to answer without potentially offending anyone, because I feel like education is a big part of it. That's a privileged position from working in migration and also being a migrant myself. When people do surveys on public opinion, it tends to be very different whether they're talking about migration as a whole, versus migration that they have experienced themselves. So, if you say to people, do you think migration is too high, they tend to say, yes. If you say, do you think we need more doctors or nurses, or do you think migration is an issue in your street, they will tend to say no.
There is in psychology an idea of a fear of the other, and I think that that is partly to play in this. That's where it tends to be a quick win for politicians to say we need to crack down; we need to crack down on crime, we need to crack down on migration. Then the reality of the studies, the science behind it, tends to be at odds with what the politics is doing. Are we able to educate the voters to change how the politicians try to win their votes? Are we able to have politicians be a bit more grown up in how they address the debate so that rather than pandering to “knee jerk” reactions that they think make them look good, have a more realistic discussion. These are the kind of political issues that we're asking around the world today, and which create a lot of polarisation in discussion.
The public opinion in Britain has certainly shifted since the end of free movement. There was certainly a very strong message prior to the referendum, and as a part of the Brexit campaign about needing to take back control, whether this was true or not, because there were actually levers that the government could pull to temporarily stop migration, even under free movement. However, the rhetoric was very clearly about a control that they weren't able to exercise, that both the government and the public perceive as now being possible. That has meant that people say that they now feel migration is okay, by and large, until they see figures like 670,000 people net migration, which is more than double what it was before.
So, we need to have a discussion around what is the purpose of migration in the UK, what do we want from it, and where does the economy sit within it? One of the reasons why countries, which are really pro-migration, are pro-migration is because they recognise an ageing population is supplemented by migration and that's the one thing that keeps the economy healthy in the longer-term. I would posit, surely there must be alternative economic models as well, because surely our population globally can't grow forever.
Equally, we then have to have a discussion around, are we going to go UAE style and say migrants are really only here to pay taxes and fill the jobs we can't fill ourselves and as soon as you've done that, you have to go home, no matter how long you've lived here and we don't have any regard for human rights whatsoever. Or do we want to try and bring people into our society, into our fold, see their value as being beyond the purely economic assessment, because there are other contributions to be given towards diversity, creativity, entrepreneurialism and so on.
The benefits of migration
Lucy Lewis: Thanks, Naomi. I want to come and talk about some of the benefits. Before I do, one of the things that's always struck me as slightly curious is when you look at the cost of supporting migration, so specifically you look at a skilled worker visa as an example, it feels curious to me that there isn't more analysis, or perhaps it's just the availability of analysis, but there's not more analysis measuring what's the benefit of that cost. Now, you have got years of experience in this space, what do you think adds the most value to organisations?
Naomi Hanrahan-Soar: Well, so, my background academically was both law and a topic called social inquiry, which is a sociology, sociological research specialism. And it comes back to how do you measure that. When the government in the UK are instructing people to analyse the value of migration, they're instructing purely economists at the Migration Advisory Committee (MAC). These are very intelligent people, of course, but they're looking at the economic impact based on taxes, based on working life, based on property they buy, based on services they buy.
There was a really interesting report almost ten years ago, on the value, or lack of value, as the MAC perceived it, for investors and entrepreneurs. Now the investors and entrepreneurs were really the ultra-high-net-worth individuals coming to the UK. Those are people who are either putting £2,000,000 into UK government bonds or UK company shares, or people who are putting at least a quarter of a million pounds into a UK business that they're going to be driving, developing and growing. And legal professionals, like myself, who are handling the applications for them, were adamant that they served a lot of benefit to the country.
The MAC, when they analysed it, said that actually the value was very limited and massively overrated; they would probably still buy the properties that they wanted to buy, they would probably still shop at the places in London they wanted to shop at, they would probably still send their kids to expensive private schools and so on. It's an interesting take for them to have decided. At the end of the day, it's a calculation of figures, though, either way on that score.
Myself personally, I find that some of the research on the contribution of migrants culturally and creatively, a lot more fascinating. There's an Oxford University professor who wrote a book called Exceptional People, and he quotes a lot of figures around how migrants tend to be far more likely to be entrepreneurs, far more likely to be represented as tech unicorn owners, for example (that means somebody who's managed to create a hugely successful, in a quick period of time, tech company). And people debate if the reason they're more likely to be entrepreneurs is because they find it harder to be employees in the UK, potentially.
But this book also posits the idea that somebody who is willing to leave the country that they grew up in, to start a whole new life somewhere else, is already inclined to think a little bit out of the box. Then you add to that, that actually they're bringing different experiences, different skills, different perspectives, different ways of thinking to an environment, and that's going to create a lot more opportunity to see opportunities that have been missed.
I met a lovely Australian woman who started a type of delivery system in Australia because she'd seen it in the UK and it had never happened in Australia. So, they're transporting an existing idea to a new environment. It could also be that your different way of thinking allows you to see a solution to something that nobody else might have seen. The Crick Institute, before the pandemic, was designing a beautiful building for all the best scientists and researchers in the world to work from, with lots of thought going into how the design would make them walk across each other on a regular basis, so that they'd have lots of watercooler moments to have conversations, to stimulate ideas. For me, that's where the real value of migration is, it's in keeping us stimulated and changing and seeing different ways of looking at the world and different solutions in the workplace and our lives in general.
Harnessing the benefits and managing the challenges of migration
Lucy Lewis: Thank you Naomi. It's so fascinating, the examples are really interesting. Because people listening to this are working in workplaces, just before we finish I want to take it back to the practical; what people can be doing on the ground in their organisations.
What are the things that employers listening to you talk about this, can do to harness the benefits of migration? And also, how do they handle some of the challenges? How do they handle workplace conflict? How do they handle employees saying, as you described, well I’d like to be a digital nomad and I think I can go and do this work from Poland?
Naomi Hanrahan-Soar: We’ve got those really practical considerations of, how do you decide what your working abroad policy is going to be, and some people make a decision that is a combination of both the legal considerations and trying to please their employees. Because, frankly, in many instances, the most legally correct thing to do would just be to say, no, nobody can do it, we would have to assess the tax in every country, we would have to assess the immigration in every country, we would have to assess the employment in every country and, frankly, that's just unaffordable from a perception of the amount of professional fees we would be paying to do that.
But, because culturally people expect it so much and it's a generational difference as well, younger generations really perceive that as almost being a right in some circumstances, they will often say okay, well if you don't need immigration permission to work from that country, you can do it provided it's less than four weeks a year, because then we think our risk of anything tax or employment law is minimal. Or maybe they say it's eight weeks, depending on the circumstances of the company or where they're headquartered. That tends to be where we see most people kind of fitting with that.
The other thing that we're seeing a lot of in practice, is people deciding, okay, we've got a massive skill shortage in auditors, and we just can't recruit enough of them from the UK. But we know that the qualifications in South Africa are very similar, and we know that pretty much everyone in South Africa speaks English very well, and culturally it's a close enough fit that it's not too difficult for us. So we are going to actively go out to South Africa and try to recruit auditors, or we are going to actively go out to the Philippines to try and recruit care workers. This is becoming more and more common as a practical way to try and deal with a lack of availability of people within your workplace.
Then I think the issue around how to deal with cultural conflicts in the workplace is a much thornier issue, because you're trying to summarise individuals into generalisations. I know of colleagues in Poland, where Poland has accepted a lot of people both from Russia and from the Ukraine, where this has been a really live issue over recent times. And we have more recent conflicts, again, where that's going to be the case.
It poses questions around what is the employer's role, and also how does one resolve issues within oneself about one's prejudices? I think it's probably more of a question for some of the employment lawyers that I work with than me. I personally just ascribe to an idea that it's best that we do have open conversations with people because difference isn't to be feared, difference is what makes us brilliant and special and we should all relish that, rather than feel that we can't discuss it because it's a bit difficult.
Two key steps to build organisational resilience
Lucy Lewis: Thank you Naomi, and thank you for those thoughts, a big topic and not one that's easy to resolve in a short podcast. We're coming to the end of this episode, but before I let you go, I would like to ask you a question I'm asking all our 2024 guests on this series. Considering all the issues that we have discussed today, what do you think are the two priority actions for employers to respond, prepare, and build organisational resilience in the year ahead?
Naomi Hanrahan-Soar: Well, cost is always the biggest thing in immigration sadly. It's a practical one, but it just costs a lot to bring in the skills and the people that you want now. We have gone from it being around £8,000 to get somebody to the point of indefinite leave to remain on a skilled worker visa, to it being about £14,000 from the 6th of February because of the various fee increases. Practically, dealing with the costs of that issue mean having to be more selective about who you choose to get visas for, and having to really look at how you upskill and train your existing workers.
I think then there is a very interesting question around thinking internally around the purpose of migration, both to the UK and from existing employees outside the UK. So, how you value that and justify that cost within the business becomes a fascinating discussion to be had, and I know a lot of our clients are having that discussion and that assessment to make sure that they can retain these really valuable global employee schemes.
Lucy Lewis: Thank you, Naomi. It has been really fascinating, a really good mix of practical and clear information about the direction of change and what's causing it. If you want to find out more about the work that Naomi does, you can visit our website at www.lewissilkin.com. Thank you, Naomi.