The Malta Independent 21 May 2025, Wednesday
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The Free movement of human capital

Malta Independent Sunday, 3 July 2011, 00:00 Last update: about 12 years ago

Advanced nations such as EU member states have been riding high on the benefits of the single market and, lately, globalisation. The abolition of all kind of barriers to the free movement of goods, services and capital, and the new-found freedom of doing business has become an economic milestone in terms of competition and the new economic world order. New opportunities for business and investment from abroad are warmly welcomed and countries large and small seek new ventures to boost their exports and boost their economies. The effort to maximise their potential is the same whether the country is as big as China, which needs to secure the provision of advanced technology from Germany, or as small as Malta, which has carved out a niche market for itself in the financial services sector.

However, while countries glorify in and promote the free movement of capital, this concept seems to exclude the most essential capital that makes the economic world go round – the human capital. While globalisation prompted the mass movement of labour, and emerging economies went into top gear to educate and prepare their young to take full advantage of the growth in trade and production, the advanced economies became more restrictive and protectionist. The panic that grabbed most governments in Europe in the face of the economic recession led them to review their immigration policies at best and at worst create a virtual bastion that put the Knights of Malta’s military fortifications to shame.

Britain seemed to lead the pack. The Conservative-Liberal Democrat coalition put a permanent annual limit on the arrival of non-European candidates. This year, the UK Government will issue only 21,700 work permits for non-EU nationals as opposed to 55,000 in 2009 and 75,000 in 2008. Likewise, the Spanish Government decided to tackle the collapse of its labour market through the subtle Volunteering Return Scheme whereby it “kindly” provided the extra-communitarian immigrants working in the country with financial aid and protection, subject to returning to their place of origin.

In short, it has become very difficult to hire non-EU workers in the Union of the free market.

The current trend of reinforcing immigration systems favouring native and EU workers, to the detriment of non-EU human capital, may bring out at least two opposing points of view in terms of workforce planning.

The restriction may lead employers to opt for native personnel and therefore try to invest in training and development to upgrade and prepare workers for the jobs of the future. In a continent that is aging fast and with reduced birth rates, it still remains to be seen whether exclusively nurturing the natives and expecting to compete globally will have the desired results.

On the other hand, this level of protectionism and insular mentality contrasts significantly with the reality of globalisation. It is a de facto measure that excludes the diversity of cultures and innovation that are so critical to keep ahead of competition and increase the capacity to change fast enough with the trends and demands.

The establishment of annual quota and schemes to keep out talent that lies at the basis of economic growth severely restricts a business’s opportunities to select the best and most diverse talent. In fact, the need for skilled immigrants is already being felt, even at this early stage of economic recovery. The recently published Labour Market Outlook by the Chartered Institute of Personnel Development showed that 27 per cent of globally-minded employers in the private sector believed that the cap on non-EU migrant workers made them reduce the recruitment of non-EU workers when they actually aimed to hire them. This does not mean that they will hire locals unless they match the standards that are required.

In addition, there are professions that currently require international experience as they are closely linked to a more global juncture. The energy, clinical research, finance and HR sectors scored international experience more highly than other attributes, according to UK specialist recruitment company Hydrogen Group. In the case of HR, which tends to vary from country to country, let alone from continent to continent, there is a need for experts who are able to understand and operate across whole regions, especially those in the emerging economies. These are the professionals who are able to interpret the different rules, evaluate and attract gifted people that operate effectively in an increasingly global workplace, pointed out ESCP Europe professor Dr Claudia Jonczyk in the Australian HR Institute’s magazine Where on Earth report.

Moreover, labour mobility is needed to redress the mismatch between competencies or the lack of them and demand for services. This is particularly true in those highly qualified occupations where there is an excess of skilled candidates in some countries, but a need in others. Traditionally, foreign engineers and doctors are needed for filling vacancies in the UK, for instance.

When the unavoidable course of globalisation and economical and social national interests collide – as happened with the arrival of the recession in the EU – is it not reprehensible that national and EU borders seem to be harder to penetrate for workers from third countries in favour of “home-grown” human capital? In this respect, although globalisation truly means unification, diverse environment and mobility in terms of human resources, this area may need to balance things out carefully. However, the UK and Spain show that advanced nations have to weigh matters carefully, as the possible inflow of talent – one of the most important aspect of human resources development – should not be controlled by annual quotas, percentages, figures or economical agreements. Their decisions have to be based on more logical reasoning that gives priority to the generation of wealth, not just today but in the future. National authorities have to monitor the talent coming from immigration and respond to employers’ needs accordingly.

Ms Soriano is a Spanish journalist at the Foundation for Human Resources Development

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