Deloitte: UK remains highly attractive to overseas workers but could face skills crunch

• UK remains attractive to highly-skilled workers, is most-favoured global destination and ranks highly on job opportunities and diversity
• However, one-third of non-British workers are considering leaving the UK, with highly-skilled EU workers most likely to leave
• Future labour market will require upskilling of domestic workers and increased use of automation to avoid longer-term skills gap and boost productivity

The UK remains an attractive place to live and work, but could face challenges in retaining large numbers of non-British workers, according to research by Deloitte, the business advisory firm.

Deloitte surveyed 2,242 EU and non-EU workers, half living in the UK and half living outside, to assess their views on what makes the UK attractive and how likely they would be to come to, or leave, the country.

The report indicates significant changes in the UK labour market, which Deloitte argues will require a measured immigration approach, upskilling UK workers and making better use of automation for the UK to adapt successfully.

UK remains attractive to foreign workers

89% of non-British workers say they find the UK either quite attractive or highly attractive as a work destination and of those currently based outside the UK, 87% would consider moving to the UK if the right opportunity presented itself.

Highly-skilled non-EU citizens are the most likely to choose moving to the UK, 94% say they would move to the UK if they could, with 83% of highly-skilled EU citizens saying the same. Among less-skilled workers, 79% of EU nationals and 93% of non-EU nationals would consider moving to the UK.

For respondents based outside the UK, the UK ranked as the most desirable place to work with 57% of respondents placing it in their top three destinations, ahead of the US (30%), Australia (21%) and Canada (19%).

Respondents already in the UK were asked what attracted them to the UK. 51% put job opportunities in their top three choices, followed by cultural diversity (34%), better lifestyle (30%) and work-life balance (27%). For those outside the UK, 54% said job opportunities was a strength for the UK, followed by cultural diversity (43%) and work-life balance (40%). London was also cited by 37% of respondents as a strength, as was the UK’s global connections (30%).

Sentiment shifting within the UK

Attitudes among non-UK citizens have shifted since the referendum on EU membership. 48% of migrant workers already in the UK see the country as being a little or significantly less attractive as a result of Brexit, compared to only 21% of workers outside the UK.

Highly-skilled workers report the largest drops in the attractiveness of the UK. Of those currently living in the UK, 65% of highly-skilled EU workers and 49% of highly-skilled non-EU workers say the country is now less attractive.

Among less-skilled workers, 42% of EU nationals and 25% of non-EU nationals say the country is now less attractive. 30% of less-skilled non-EU workers say the country is actually now more attractive.

One-third of non-British workers considering leaving

Overall, 36% of non-British workers in the UK say they are considering leaving the UK in the next five years, representing 1.2 million jobs out of 3.4 million migrant workers in the UK. 26% say they are considering leaving within three years.

Highly-skilled workers from EU countries are the most likely to consider leaving, with 47% considering leaving the UK in the next five years, versus 38% of highly-skilled non-EU workers. Among less-skilled workers, 27% of EU nationals and non-EU nationals say they are likely to leave in the next five years.

Filling the skills gap

Overall, 58% of non-British workers say it will be difficult or very difficult to find a UK worker to replace them. This rises to 70% of highly-skilled EU workers and 56% of highly-skilled non-EU workers. Among less-skilled workers, 61% of EU workers, but only 33% of non-EU workers, say it will be difficult to replace them.

28% of highly-skilled migrant workers say parts of their work are either likely or highly likely to be automated in the next five to ten years, as do 28% of lower-skilled non-EU workers and 36% of lower-skilled EU workers.

Based on previous Deloitte research, the three sectors with the highest numbers of EU workers are also in the top four sectors with the highest potential for automation.

David Sproul, senior partner and chief executive of Deloitte North West Europe, said:

“The UK remains a highly attractive place to work for people from around the world. Despite political and economic uncertainties, more people are attracted to live and work in the UK than anywhere else in the world. Nine out of ten overseas workers would consider moving to the UK if the right opportunity presents itself. The UK’s cultural diversity, employment opportunities and quality of life are assets that continue to attract the world’s best and brightest people.

“But overseas workers, especially those from the EU, tell us they are more likely to leave the UK than before. That points to a short to medium term skills deficit that can be met in part by upskilling our domestic workforce but which would also benefit from an immigration system that is attuned to the needs of the economy.”

Angus Knowles-Cutler, vice chairman and London senior partner, said:

“These shifts in the UK labour market come in the midst of a longer-term employment transition where automation is beginning to transform the world of work. Brexit does not change the fundamental factors shaping this but has altered calculations on how to drive change for best advantage.

“The UK economy depends on migrant workers to plug gaps in both highly skilled and lower skilled jobs. If immigration and upskilling can help fill higher skill roles, automation can help to reduce reliance in lower skill positions. This will require careful consideration region by region and sector by sector, but there is a golden opportunity for UK workers and UK productivity if we get it right.”

End

Notes to editors

Methodology
Deloitte surveyed 2,242 non-UK workers between 3 and 27 March 2017 through online research technology and field research.

Survey respondents were represented equally across nine economic sectors, and split evenly between higher and lower skills respondents, and between EU nationals (from Germany, France, Italy, Ireland and Poland) and non-EU nationals (from the US, South Africa, Australia and India).

Power Up
This is the first report in Deloitte’s Power Up series which will explore the critical challenges facing UK government and business and offer pragmatic advice on competitiveness, innovation and inclusive growth.

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk.

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