Study finds UK immigration cap will be harmful to business

A new study by a recruiting firm has come to the conclusion that the UK's immigration cap will harm businesses and create further labour shortages.

Specialist recruiting firm Poolia surveyed a number of businesses expected to be affected by the UK Government's permanent immigration cap that starts in April 2011. The findings would suggest that the cap will be bad for UK business, increasing costs and leading to more gaps in the labour market.

The immigration cap could have the exact opposite of what the government was hoping for; Businesses are likely to suffer because of the inability to take on desperately needed skilled staff so reducing employment prospects for people both in the UK and prospective migrants to the UK.

UK businesses believe that the cap will have a negative impact on recruitment and retention of skilled employees. 45 percent of respondents said that the cap would adversely affect their business. Only 16 percent of those surveyed thought that the cap was good for the UK. 25 percent of respondents felt that the cap was only an attempt by the Government to show that it is "doing something" when in reality it would make little difference to people looking for work.

The immigration cap specifically targets skilled and highly skilled non-EU workers. Over a third of businesses surveyed felt that skills they needed are in short supply in the UK. Therefore the immigration cap will not result in more jobs being available for workers in the resident labour market.

Many businesses are also worried about losing key employees who are unable renew their visas.

"The message from clients seems clear: many dont feel the proposed cap on skilled migrants will have a great deal of impac [unemployment] and it could cause employers severe problems," said Shaun Greenfield, Poolia's Managing Director.

"So the question is, why introduce it? The concern is that by squeezing the source of skilled workers, employers will face increased pressures, which could have an impact on cost, productivity and overall trading performance," he added.