The role of skilled labor

Background: A large increase in international migration to the United Kingdom has occurred in the last few years.  Majority of the people migrating have consisted of skilled labor workers, a group of people which have become increasingly important in recent years due to globalization, revival of growth in the world economy, and the explosive growth in the information and communications technology (ICT). A number of developed countries have liberalized their policies to gain highly skilled professionals.

Definition of Skilled Labor by U.S. Embassy London:  A person, who at the time of petitioning, is capable of performing skilled labor, requiring at least 2 years of training or experience, not of a temporary or seasonal nature, and for which there are no qualified workers available in the U.S.  Relevant post-secondary education may be considered as training for the purposes of this provision

Skilled Labor in the UK:  The UK will be looking for skilled workers as a recent study states 2 of every 3 companies will have a skills shortage within the next 6 months.  The article was published on December 24, 2007.  However, there are many skilled workers in London, so finding these workers will probably not be an issue.  In London, highly skilled workers are productive and therefore are paid well.  Employees benefit because of the competitive environment which improves their skills.  Employers are attracted to London because of the concentration of highly skilled workers in the area.  The amount of highly skilled labor in a city is an important factor to the city's success.  The more highly skilled workers there are, the more advanced the city can become.  The UK makes it very easy for highly skilled workers because of the Highly Skilled Migrant Program.

A recent article by the Free Press Business Reporter and Canadian Press, published on September 27, 2004 discusses The London Economic Development Corp's assessment of London labor. The assessment identified the areas London needed to improve upon to maintain a high number of skilled workers. Important tasks highlighted include attracting skilled workers from foreign countries and assisting older workers to be able to stay on the job longer. Retraining employees so they are more efficient in their current professions was highlighted as an important area as well.

Highly Skilled Migrant Program:  On December 13, 2001 the UK allowed highly skilled workers into the country for the first time in 30 years.  These workers did not need a work permit.  In October 2003 some more changes were added.  Fees for the first time were introduced, the first being £150.  Also, the Young Person's Assessment was established for those under the age of 28.  In April 2004, the FLR (IED) form was introduced for those who wanted an extension in the program, the fee being £121.  On November 7, 2006 the newest program was introduced, which was the beginning of the points based system.  With the points based system, you don't need a job to apply.  You also do not need to invest in the UK, have a business plan, or create a job.  An applicant needs to gain 75 points in order to be admitted.  Applicants can accumulate points in 5 categories.  The first category is education, in which 50 points can be earned.  To be eligible, the applicant needs to be at the degree level or higher, and if the degree was gained somewhere else, proof needs to be provided showing eligibility. 

Applicants can also gain points from past earnings.  The higher your earnings, the more points you can obtain.  This is a measure of how much money you can potentially make in the UK.  45 points can be gained from this section.  The following chart shows how US workers' salaries would be awarded points.  There are five different point systems, depending on what country you are from.  Information on other country's point totals can be found at http://www.bia.homeoffice.gov.uk/workingintheuk/hsmp/eligibility/pointsassessment/

There is also an MBA provision, in which applicants can gain some additional points.  To gain points in this area, the applicant must have received their degree from one of the top 50 world wide programs. 

Applicants can get points in the age category as well.  If you're under 32, an applicant may get points, but no points are awarded to an applicant who is over 32.  There are 20 points possible in this category:

There is also a previous work or study in the UK category, in which the applicant may gain an extra 5 points.  Furthermore, an English language requirement must be passed which includes writing and speaking skills.  If this is unmet and the applicant has full points, they will still be refused. 

There have been some changes in this HSMP from the previous one.  First, more points are needed (before it was only 65).  Also the following categories were taken out:  work experience, significant achievements, skilled partner, and GP Priority provision.  The following categories were added:  academic achievements, previous earnings, age, previous work or study in the UK, the MBA provision, mandatory English requirement.  If the applicant is accepted, they can stay in the UK for 24 months while they search for a job.  After this time period, they can apply for an extension which would get them another 3 years.  After this, they may apply for permanent residency.  There are some disadvantages to this program.  Some feared that they would not meet the new requirements and may be forced to leave the country.  However, the points based system was put into place to make it easy for highly skilled workers to come into the UK while controlling migration.  This program does not benefit lesser skilled workers, as their allowance into the UK is based on need, and if they have a seasonal position they may be sent back and may not be able to apply for citizenship.  If a worker does not meet the requirements for HSMP, they have other options.  One option is to obtain a work permit, which means that an employer would have to sponsor that employee.  There is also an innovator programme to assist those who have a creative idea.  They may be able to work in the UK under this program.

Students coming to the UK:  London truly is a global financial center and attracts people from all over the world.  For this reason, many employees seek work here, but students do as well.  There is an increase in the number of foreign students coming to the UK, which could lead to an increase in foreign workers.  In 2002, 83% of UK students were from overseas compared to 71% in 1999.  Students come from Africa, Asia, and Australia.  Many of the reasons students come to work in the UK are similar to why employees come here.  Many students come for the international experience.  Some state that there are social skills that they can learn here because of the global feel that they can't learn in other countries.  Also, it is easy for students to come to the UK just as it's easy for migrants to come to the UK.  Students find that coming here is easier than dealing with US visas.  Many UK programs also take less time than their US counterparts. Students are also allowed to work part time and receive free health care services if they are enrolled in a program lasting 6 months or more. These are benefits a student may use to help make a final decision over where to study.

Benefits to London:  According to The Competitive Position of London as  Global Financial Centre London, published by The Corporation of London, London scored the highest in skilled worker availability when compared to other predominant financial centers. The availability of skilled labor was ranked as the most important factor in determining the competitiveness of the center.  This is such an important factor because employers need people to not only get the job done but to also exceed expectations and push their business forward.  Employers benefit from being in London because there are cutting edge employees here. Employees are highly motivated and willing to work long hours, which is why they are paid so well in London.  London employees are skilled because they have various degrees and also may know more than one language.  Employers also like doing business in London because workers are readily available since highly skilled workers flock here due to ease and the promise of good pay.  Also, it is easy for employers to let employees go in London.  The regulations for doing this aren't very strict like in other cities such as Paris.  This availability of labor is also why London is the top global centre in the world and why it will remain the top global centre in the world.  A threat to London may be the labor regulations that the EU is imposing; however, this probably will not impact London much.  Overall, both employers and employees benefit from being in London and doing business here, which in turns makes it one of the great global financial centers. This leads to the question, is it the high availability of skilled labor that has made London the global financial centre of the world today? Or is it that London is the global financial center of the world and because of that skilled labor flocks to London?

Another point to consider is the history of skilled labor in London.  Higher levels of education have been around for centuries in the U.K.  Perhaps the skilled labor is derived from quality education recieved by graduates of such universities.  The University of Oxford is world-known, and has been around for so long - no one knows the actual date the school was established.  However, teaching has taken place there since 1096. The University of Cambridge is the second oldest university in the English speaking world; it was established in 1209.  Other well known schools include: Imperial College of London, The London School of Economics, University College of London, and University of Warwick.

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