Four reasons for European businesses to hire migrants
Florence Karaba, University of Bath
In 2015 more than a million migrants came to Europe. As the first flush of “welcome culture” in Germany fades, and other countries install disincentives, politicians must consider how to integrate those who have already arrived.
A big part of integration will be finding jobs for migrants, but although this is obvious from a policy point of view, companies could question why they should hire new arrivals. After all, they often struggle with the local language, can be unfamiliar with formal and cultural rules, and might be struggling with trauma from a war zone.
It is easy to focus on the potential negatives, but this creates an economy where migrant labour is underused or exploited. I have studied migrants in Europe over the past five years and it is clear that there are four key reasons why mainstream businesses will benefit by hiring from this new pool of employees.
1. Migrants are self-starters
Employers are looking for people who get things done, self-starters who show initiative, focus, and determination. Migrants are what economists refer to as a “self-selected group”. They are prepared to leave a familiar setting behind and embark on a dangerous journey to reach Europe.
It might seem that some migrants – Syrians for example – have no choice other than to leave, but the truth is that the majority remain, or go to refugee camps close by. While Europe presents opportunities, there are great uncertainties associated with the migration. Will you be allowed to stay? How much will it cost? Will you survive the boat trip across the sea?
It is tempting to believe that anyone who endures a tough journey to better their life will be motivated to work hard, and the data bear this out.
A joint report by the International Labour Organisation, the Organisation for Economic Co-operation and Development (OECD) and the World Bank concluded that migrants are doing well economically. They pay more taxes and social security contributions than they receive. The net fiscal impact as percentage of GDP has been estimated to be positive: 0.8% in France, 1% in Germany, and 0.7% in the UK.
My PhD research on immigrant nurses in the UK suggests that migrants work longer hours than domestic nurses. Over 50% of the 43 nurses I have interviewed held more than one job, typically working for the NHS and an agency.
2. Migrants are young and educated
One of the big challenges in ageing Europe is to find qualified young staff. A Swedish report suggested that more than a third of Syrian refugees arriving in Sweden had a college level education. Previous OECD statistics show even higher numbers in the UK, where more than 45% of immigrants have a degree. This probably reflects the fact that the majority of migrants to the UK come to work or study, rather than to join family or escape a conflict zone. But these latter migrants too bring qualifications.
The education level of migrants is also likely to rise further in the future. Since 2000 the proportion of migrants older than 15 with a tertiary education has risen by 70% in OECD countries.
In many industries there will be a shortage of qualified staff as baby-boomers retire. Migrants can help us address this if companies help them adapt. They have a history of plugging gaps, particularly in healthcare and occupations linked to science and technology. They also take jobs which are unattractive for local workers due to long hours and low wages.
3. Migrants can help access new customers
Let’s start with a specific example. With 50m Muslims in Europe, halal food is a great opportunity. In 2010, the European market was estimated to be valued at US$67 billion. In the UK, halal meat makes up 15% of the market and in France it is bigger than organic foods. Companies can only tap into this opportunity if they hire people with the credibility and knowledge of halal. Many migrants can offer this.
While food is a particularly large market, there are plenty of niche opportunities too: Indian weddings in Buffalo, New York; iROKOtv which provides Nollywood films online; or telecommunications such as the SIM cards to make cheap phone calls home from Lebara.
Over time some of these also attract a broader customer base. Fung Wah, a Chinese bus service that started in the 1990s to offer cheap trips to relatives for Chinese people in New York and Boston, soon became popular with students and others who were budget conscious.
Looking ahead, new technology such as 3D printing and the rise of digital technology will make this easier. Companies, and their migrant employees, will be able to serve smaller markets more economically.
4. Migrants understand international markets
Going global is a difficult task and many companies fail to make decent profits. One of the key challenges is to understand the new markets. Migrants can offer that bridge between a host country market and their home country market, a unique position in the workforce.
One recent article in the Harvard Business Review showed that companies which make a success of international growth can tend to have global diversity in their executive suite. The article found that the CEO or founder is often a foreigner. Take Myriad Trading, which produces own-brand products for companies like Wal-Mart. Production is in China, Pakistan, and Bangladesh where operations run in a different way than in the US. The company employs several senior managers with knowledge of both the US, and the producing countries. This helps them to avoid potential misunderstandings and reduce frictions.
Europe will remain an attractive destination for migrants in the years to come. Businesses can benefit from this if they are prepared to embrace the opportunity and deal with some initial challenges such as language barriers. Considering the growing talk about corporate social responsibility, their contribution to integration could also earn them some brownie points.Comment on this article
Florence Karaba does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
University of Bath provides funding as a member of The Conversation UK.