The UK Institute for Public Policy Research (IPPR) recently published its findings on the impact of EU expansion in 2004, and in particular, the impact of Polish workers. The IPPR estimated that about a million imigrant workers came to the UK from the 2004 accession countries, but about half have already left.

This was "very different" to previous migrations to the UK, because it is now possible for "migrants from EU member states to come to the UK on a temporary or seasonal basis, and to regularly visit home while living in Britain". The rise of budget airlines has facilitated this.

Most companies in the logistics sector have been touched in some way by this immigration. UK industry is beset by a number of recruitment issues, including image, underinvestment in training, spiralling cost pressures and the often overlooked effect of demographics. Declining birth rates and longer life spans create an older and reduced working population. The opening of our labour markets to the accession states created an obvious solution. While foreign workers worked well in construction and agriculture, language barriers and geographical knowledge remain issues, particularly in the driving sector. That said, migrants arrive with a variety of skills.

I now see the migrant labour pool divided into the following categories: 

Stayers: They may have originally arrived on short-term contract work, but have stayed and settled, form part of the permanent UK workforce and many have already made significant career advances.

Semi-permanent stayers: Often geographically mobile within the UK, they move around the market by tapping into a well-established network of websites, native language publications and contacts. Often male, this group is very visible in agriculture, construction and, to a lesser extent, the warehouse sector.

Returnees: In 2007, the Polish economy grew by 6.5%, and the government expects it to grow by another 5.5% in 2008. I’ve recently heard a lot about how Polish wages are rising to attract people back. This is partly true, but hasn’t yet affected the UK logistics sector.

Why? Firstly, we are not unique. Every logistics business in every country has to minimise costs, while most workers want to earn more.

When Slovakian drivers come to the UK, their places at home are filled by drivers recruited from Ukraine or as far away as the Philippines.

Secondly - and this is backed up by the IPPR study - migrants often leave "because they miss home". Family bonds often pull harder than cash.

Cyclical visitors: The growth of this group is the most significant feature of the current wave of immigration. Employers can "turn labour on" periodically to support a particular business cycle, and many workers are happy to work in this way. Unfortunately, the UK’s welfare system does not incentivise the UK workforce to move off benefits for these types of assignments, and productivity statistics from employers perpetuate the desire to import labour to cover these activity peaks, to the detriment of the local unemployed.

What is the UK logistics industry doing about this? My experience is that it is generally delighted with the rise of "cyclical visitors". They reliably and productively fill gaps at operational levels. The "stayers" are filling permanent roles at this level and into more skilled and managerial roles. This trend will continue. Meanwhile, far-sighted logistics companies have invested significantly in training and development, but there is still much work to be done.

Germany doesn’t have the same relaxed rules to the importation of labour as the UK. It does, however, experience the same cost and demographic pressures. I am sure that many companies are burying their heads in the sand in Germany, but some, especially those involved with the Forum for Sustainable Development, are taking a holistic approach to the problem and sharing information. One of the members, BMW, is attacking the recruitment and retention problems that it faces through addressing health management and preventative care, the work environment, training and competencies, resettlement models and communication.

I strongly believe that those companies that think in these terms, developing their corporate social responsibility strategy, and using migrant labour as a support to this, will attract and retain better motivated staff, reduce costs and have a better impact on their local communities. It definitely needs consideration, rather than jumping straight to the "Polish solution".

Through the adoption of different rules, there is an imperfect EU labour market at present. Traditionally, foreign labour competed indirectly against domestic labour through importation of foreign goods. Today, foreign labour competes directly against domestic labour in the provision of goods and services in the same buildings.

Through opening UK borders to the accession states in 2004, this fact was brought into sharp relief. We are not unique. This is a physical manifestation of globalisation and is here to stay. It will be interesting to see how we and the other EU labour markets react to this over the coming years.

This is a piece written by Andy Howard and published in IFW Magazine