UK: Research highlights how migrant workers benefit business

In a survey, UK businesses reported that using migrant workers has led to better business performance and productivity. This government-sponsored research into the impact of migrant workers on UK businesses suggests that migrant workers alleviate skill shortages and contribute to innovation, while their connections support expansion into new markets.

In February 2015, the UK's Department for Business, Innovation and Skills (BIS) published a research paper presenting findings from government-funded research into the impact of migrant workers on UK businesses (860 KB PDF).

About the survey

The survey, by social research company TNS BMRB, incorporated experiences and perspectives from managers, migrants and UK co-workers, and explored similarities and differences by sector, size and type of business, skill level of migrant workers and their country of origin (whether they were from inside or outside the European Economic Area (EEA)). The research aimed to explore both the economic and non-economic impacts that migrants had on businesses.

Methodology

The data was gathered in two phases. Phase 1 comprised telephone interviews with owners or managers of 80 businesses that employ migrant workers, from a range of sectors, business sizes and geographical locations, and with a mix of migrant workers of different nationalities and age ranges. In Phase 2, 15 business case studies explored in more depth the impact of migrant workers, based on co-worker and migrant worker interviews and site visits where possible.

The research focused on interviewees' spontaneous views on impacts, covering six themes identified by an initial literature review as drivers of productivity. These were:

  • skills;
  • innovation;
  • knowledge-sharing;
  • training;
  • migrants’ connections; 
  • integration.

Key findings

Skills

The research found that migrant workers’ skills allowed businesses to expand their workforce, to fulfil existing contracts and to take on more work. Businesses often reported that the skills they needed were not readily available in the UK or that migrants offered them access to a wider talent pool, allowing them to select better-qualified candidates. Migrant workers with skills additional to those required by their job specification could often bring further benefits.

Higher skills were sometimes offset by lower language skills or higher labour turnover, but, overall, the benefits were seen to outweigh the disadvantages.

Innovation

Migrants were found to have a significant effect on innovation in only a minority of businesses in this sample, and many businesses reported no impact. In certain sectors, however, migrant workers’ ideas did create new business opportunities and jobs. Some businesses found that employees with diverse perspectives working together developed new approaches.

In some instances, migrant workers drove the creation of new products, processes or services, or helped gain access to new markets. These types of innovation were rarely planned but boosted growth in the businesses involved.

Knowledge sharing

The research found that knowledge transfer from migrants to businesses had a key impact in a wide range of cases. This was both direct, through the upskilling of co-workers and the expansion of the business’s knowledge base, and indirect, by facilitating other activities such as training, innovation and international connections.

In highly specialised sectors, migrants were recruited for their knowledge and experience of other countries. Teams in some businesses were structured to ensure knowledge sharing. Most often, however, knowledge was shared ‘naturally’ through informal co-worker relationships.

Knowledge-sharing also extended to attitudes towards work. The research report cites the case of a business in which staff were well integrated, where managers paired migrant workers with new recruits to encourage the latter to adopt the same positive ethos. 

Training

Training was an area where the research found that hiring migrants had little impact. Migrants were generally seen to have the same training needs as their co-workers, usually because the business had standard training programmes in place for all employees. However, in a few instances, migrants required different or additional training, most commonly to improve their English language skills or to address cultural and communications issues. This was seen mostly in lower-skilled settings, including call centres, airports, distribution and wholesale. The report states that, although this came at an additional cost, most businesses deemed it worthwhile.

In terms of the training that migrants could provide to co-workers, this was usually informal but occasionally brought clear benefits.

Migrants’ connections

Migrants’ connections were identified by the research as having a key impact: ‘Where utilised, migrants’ connections were seen as the most unique benefit of their presence’ (p. 7). They affected businesses by:

  • supporting expansion and growth into new markets;
  • strengthening client relationships in existing markets abroad; 
  • helping with business activities using local connections within the UK.

For businesses with growth and export potential, migrants facilitated expansion into new markets, creating new consumer markets for products and services, and occasionally developing the business’s supply chain. Migrants were also able to use their language and cultural awareness to strengthen client and customer relationships and to forge new contacts.

Within the UK, migrants in some businesses used their networks to reach new customers or clients by marketing products or services to local migrant communities. They also supported recruitment by recommending local workers, which enhanced the businesses’ capacity and flexibility.

Integration

The research found that integration can be an issue if workers of different nationalities do not mix and where management is not proactive in addressing the issue.

Where migrant and UK native co-workers did not integrate well within teams, some businesses experienced a decline in worker morale. However, where integration was successful, it had positive impacts on attitudes to work.

The research found that limited integration often occurred in lower-skilled industries, especially where management was not proactive in addressing divisions within the workforce. In several places, this was addressed by encouraging the use of English at work, facilitating team integration, organising team events and managing relationships more closely. Businesses that had adopted these measures had been successful in overcoming integration issues.

Conclusions

Overall, the research found that the extent of the impact of migrant workers varied in each of the six areas examined, with skills, innovation, knowledge transfer and migrants’ connections being the most significant factors for businesses. Impacts relating to training were low, while the effects of migrants’ integration cut across all areas. Although the research explored possible differences between EEA and non-EEA migrants, the only differences that emerged were in relation to visa applications rather than involvement in the company itself.

According to the report’s authors:

Migrants have brought culturally unique and complementary skills and knowledge of processes and ideas to the workplace. In other instances they have upskilled colleagues, leading to improvements in process and innovation and securing new work for their employers. These changes have led to both improved productivity and company expansion (p. 3).

Commentary

The positive findings of this research demonstrate why business groups, notably the Confederation of British Industry (CBI), are concerned about moves by the newly-elected Conservative government, announced by the prime minister on 10 June 2015, to ‘reduce demand for migrant labour’ and ‘cut non-EEA work migration’. The CBI responded by saying that it understood

the public’s concerns around immigration, but limiting highly skilled workers from coming to the UK is not the answer. They bring their skills and ideas to this country, pay their taxes here and boost growth . . . We need to keep upskilling our population, but at the same time as attracting the best and brightest global talent.

 

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