UK employers pillaging Europe’s talent

The UK has one of the highest rates of overqualification in Europe. Research by the Institute of Public Policy Research two years ago placed Britain towards the upper end of the overqualification league table for those with both graduate and upper secondary level qualifications.

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A report last year by the Chartered Institute of Personnel and Development, looking specifically at graduate overqualification, presented a similar picture.

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A couple of weeks ago, reflecting on the number of foreign graduates I have come across in London doing clerical and administrative jobs, I wondered how much of this might be due to immigration. Recent OECD figures indicate that, since the recession, the UK has seen one of the biggest rises in the rate of over-qualification of foreign-born workers.

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Data from the ONS, released earlier this month, supports my hypothesis. The ONS looked at the number of people with qualification levels above and below the mean for their jobs. It found that, until the middle of the last decade, both over qualification and under qualification had been falling.

Screen Shot 2016-03-29 at 11.21.55The decline in under-education is, in part, due to a cohort effect. Younger workers with higher qualifications have raised the average level of education in a given occupation while those who came into that occupation when the qualification bar was much lower have been retiring.

But it is the rise of over-qualification that is the most interesting. It can’t be entirely attributed to the recession as it was rising before the downturn in 2007 and has continued to rise ever since. Something else happened in the middle of the last decade though; EU enlargement and a consequent rise in immigration. As this next chart shows, the over-qualification rate among eastern European (EU10) migrants is way higher than that of any other group.

Screen Shot 2016-03-29 at 11.36.32Interesting also is the recent rise in overeducation among those from the old EU. This is consistent with the rise in migration from western European countries since 2012. My anecdotal data about London being full of Spanish and Italian graduates doing administrative jobs may not be far wide of the mark.

This chart also shows that the overeducation rate among the UK born has barely shifted since the early part of the last decade, which suggests that most of the rise has been due to immigration.

The age profile of the overeducated shows them to be concentrated in the 25 to 34 age group. According to the CIPD, more than half the eastern European migrants in the UK are in this age group.

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Screen Shot 2016-03-29 at 12.02.07Migrant workers from the EU don’t tend to come straight from college. Most come after they have some work experience. Degree-qualified employees already attuned to the world of work, willing to work for relatively low pay. From an employer’s perspective, what’s not to like?

At a Resolution Foundation event last year, Alison Wolf suggested that immigration might have had an impact on the amount of training investment by employers. There has certainly been a decline in training since around the same time that immigration and over-education levels began to increase. Having found a pool of cheap, well-educated and work-ready employees, have employers decided they no longer need to train people? Why build when you can buy for less?

Britain’s employers must be among the luckiest in Europe. Thanks to the dominance of English, education systems throughout the world teach young people our language. Freedom of movement and low regulation and low payroll taxes mean that it is easy to employ people from anywhere in the EU and the risks of doing so are minimal. There is an almost inexhaustible supply of high quality and inexpensive labour from which to recruit.

All of this raises another interesting question though. If Britain’s employers are happily pillaging Europe of its brightest and most talented people, how come the UK’s productivity is in the doldrums?

 

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5 Responses to UK employers pillaging Europe’s talent

  1. Good one. We’d all suspected as much.

  2. Needs2Cash says:

    Continental EU economy drains its brains to the UK.

    …increased productivity, though, needs leadership and investment in systems, processes, teams and design.

    Overqualified EU workers cannot do it alone.

  3. sdbast says:

    Reblogged this on sdbast.

  4. Patricia Leighton says:

    Surely the notion of being overqualified for a job is too simplistic. Is the report saying that the only way of defining the value of a degree is by what employers consider an appropriate background for a job.?The general point of the article is well taken(As usual) but I think , first, that degrees and qualifications generally need to be seen in a more nuanced way and second, I think the data suggests a lot about the limited and narrow nature of many of our degrees, compared with those, often longer and more interdisciplinary, obtained from say, Netherlands, Germany, Czech Republic. Do these non-UK graduates stay?Or, is it CV building?

  5. Ed says:

    There is now growing support for the view that low UK productivity & productivity growth are RESULTS of low pay: when employers can get labour free from the JobCentre or at low wages (topped up by benefits) why should they innovate in labour-saving technologies or forms of management? The surge of highly educated people, both home-grown and from abroad, reinforces this tendency as well as removing the incentives on employers to train people, as you point out. Michael Edwards

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