183.In the previous Chapter we considered how the workforce within the UK can be developed so that it works better for the advertising industry. This requires action on the part of the Government and the industry. In this final Chapter we explore in further detail the international nature of the UK advertising industry and the international workers who are an essential part of it.
184.The UK, especially London, is a global centre of international advertising. It attracts talent from around the world. James Murphy, Chief Executive of adam&eveDDB, said:
“There are two centres for advertising in the world, one of which is New York and the other is the UK, particularly London, but the difference is that London is a global hub, whereas New York is a hub for North America much more than it is an international hub. We are undoubtedly the most powerful global hub in marketing services”.
185.The Government stated that London is “the centre for European and EMEA [Europe, Middle East and Africa] and global advertising … More than 75% of the UK advertising industry services international clients.”
186.Katharine Newby Grant, Associate Director of Media for Northern Europe at Procter & Gamble, said that the UK has some of the “best creative talent in the world and a real diversity of talent.” Stephen Woodford of the Advertising Association stated that “the UK is very, very good at attracting the world’s best talent. If you are a Polish data programmer, a German creative or a Brazilian strategist and you choose to come to London, it is probably because you are one of the best in the business in your home market and you are coming to work in the UK to improve your CV and career and work on global business”.
187.The Advertising Association conducted a survey of 132 advertising companies in 2017 which demonstrated the extent of integration of international talent in the UK advertising industry. In the survey, 69% of respondents said that they employed staff from outside of the UK. On average, 17% of an agency’s workforce was made up of EU nationals while 10% were from the rest of the world.
188.Having an internationally diverse workforce benefits the industry’s creativity. Nigel Moore, Production Director at Fuzzy Duck Creative, said that “We are an ideas type of an industry. The wider your set of ideas is, the better. A person who comes from France has a very different approach from that of a person from Germany, which is very different from my approach as someone from Hertfordshire who now lives in the north-west.”
189.The language skills and cultural awareness of international talent also helps UK advertising companies attract international clients. Leo Rayman said of his company Grey Advertising London: “We have a number of international accounts that we run from London, and having someone from Italy, Spain or Germany who speaks the language and understands the cultural nuances in that market … is absolutely critical.”
190.Alex Lubar underlined the importance of international talent for his company McCann London:
“Sixty per cent of our clients are either globally hubbed or have regional European hubs out of our London office. Those clients will often come to us and say, “We want a team that is mixed background. We want a team that in some way mirrors the consumers … in the case of certain of our clients that have European hubs, with major business in France, Germany or Italy, they like us to have a mixture of Europeans on the team”.
191.Rahul Batra, Managing Partner of Hudson McKenzie, said that international workers bring their contacts with them which helps UK advertising agencies win accounts from overseas clients. This can have a multiplier effect, with the work generated by international clients providing jobs for UK workers.
192.International workers also fill gaps in the UK labour market. James Murphy of adam&eveDDB told us that the advertising industry competes for staff “with lots of other industries, many of which have wider margins and higher salaries than we can offer. We have definitely benefited from being able to bring in people from other countries, particularly some EU countries, Germany and Poland notably”. Ignis, an agency, said that the advertising industry is changing faster than the “UK-only talent pool can satisfy. If we are unable to hire the experienced talent to harness the latest technology, we will fall behind our international competitors.”
193.Under the “free movement of persons” principle, citizens of the EU nations, Switzerland and the European Economic Area (which includes Norway and Iceland) are entitled to work or study in the UK. Citizens from the rest of the world may apply for a visa to work, stay or study in the UK.
194.With the UK’s departure from the EU, the Government will end free movement of persons into the UK. The Government stated that “migration between the UK and the EU will continue, and we are considering a number of options for how this might work”.
195.As part of the process of determining its options, the Government said that it will “consider evidence presented by the independent Migration Advisory Committee, which is due to report in September 2018”.
196.The Rt Hon Matt Hancock MP, the then Minister of State for Digital, said that the UK had already reached agreement with the EU that their “citizens already resident or who decide to base themselves here before March 2019, will be free to stay and continue to have broadly the same access to benefits and healthcare as they do currently”.
197.The UK advertising industry relies on EU nationals to attract clients, improve creativity and fill gaps in the domestic labour market. Tobin Ireland said of his workforce that “some of our EU residents are from Colombia, Brazil and India who just happened to have a grandparent who lived in Spain, Portugal or the UK.”
198.The7stars media agency told us that Brexit is already playing a “significant role in pushing digital talent back to Europe (especially to cities such as Barcelona, Amsterdam, Paris and Berlin)”. Alex Lubar, Chief Executive of McCann London, agreed: “our most proximate threat is Amsterdam. That is the closest version of a regional hub within Europe where talent would go.” Stephen Woodford of the Advertising Association said that Amsterdam is offering tax incentives to those with skills that are in demand and have been very “quick out of the blocks, looking to gain share from the UK as a result of Brexit”. Mr Woodford said that the Advertising Association has “anecdotal evidence of EU citizens working in our industry thinking their time is up and it might be time to return”.
199.The Advertising Producers Association saw a more global threat to London; if international talent could not come to London, the city would be “overtaken as a centre by Los Angeles or New York or Amsterdam or Montreal”. The threat might not just be losing talent in advertising firms, but discouraging digital advertising starts-ups or investment.
200.In February 2018, independent creative agency HarrimanSteel announced that it was shutting its London office for a new office in Amsterdam. James Murphy reported that a major European client of his company adam&eveDDB had requested that it’s account be moved from London to continental Europe.
201.Non-EU migrants may apply for one of a number of categories of visa. Box 8 provides a brief overview of the categories of visa (known as tiers) that are relevant to working in the advertising industry.
Tier 1: This category is for entrepreneurs who want to invest in the UK or individuals with exceptional talent.
Tier 2: This category is for skilled workers. Migrants may be eligible to apply for the Tier 2 (General) subcategory if they have been offered a skilled job that cannot otherwise be filled by a UK resident. One means to show this is if the profession or role is on the Shortage Occupation List. Tier 2 (Intra-company Transfer) visas are available to individuals whose employer has offered them a role in a UK branch of the organisation.
Tier 3: This category is no longer in use.
Tier 4: This category applies to further and higher education students.
Tier 5: This category applies to temporary workers and young people who qualify under the youth mobility scheme
202.The Government told us that they have made a series of reforms to the UK immigration system to give “businesses in the UK, and abroad, the confidence they need in our system. We have a comprehensive offer for non-EEA nationals wishing to work in the UK”.
203.We heard that the UK immigration visa system was slow, expensive and restrictive. The Institute of Directors told the House of Lords European Union Committee:
“Visa applications typically take between three and eight months to process. The forms that an employer must fill out typically comprise about 100 questions and 85 pages for a visa. It is very time-consuming and onerous”.
204.Under Tier 2, medium sized and large companies are obliged to pay the immigration skills charge of £1,000 per worker per year. Rahul Batra, Managing Director of Hudson McKenzie, said this charge is a “huge cost for employers. You are taking all that money from the employers, saying that we want to improve our skill set in the UK with this money, but you are not helping them in any way if you are restricting the Tier 2 visas and staff coming from overseas”.
205.Mr Batra also told us how restrictive the Tier 2 visa is. For example, freelancers may not apply for Tier 2 visas, and the shortage occupation lists are inflexible and do “not benefit the employers”.
206.Many of our witnesses were concerned that the extension of the UK visa system to EU nationals would be detrimental to the advertising industry. Leo Rayman said that such an extension would “slow down our ability to win business, convert it and make it work”. James Murphy stated that the free movement of people meant that there are EU citizens with the right skills based in the UK and “we do not have to go to their countries to hire them specifically for a job. They are here.” The Government also limits the number of Tier 2 visas (General) that it issues to 20,700 annually. Rahul Batra told us that if EU nationals are added, Tier 2 will be “oversubscribed every month”.
207.A number of witnesses were concerned that extending the UK visa system to EU nationals would be a barrier to SMEs having ready access to workers and to EU freelancers entering the UK labour market.
208.The7stars, a media agency, told us that “as an SME, in the past we have avoided applicants … with complex visa requirements”. Tobin Ireland of SmartPipe Solutions stated that for a “small business like ours, if we were unable to retain half the team because they had to apply for visas it would have a catastrophic effect on our business”. Faced with such an eventuality and without access to the best international talent, Mr Ireland believed that SmartPipe Solutions would have to “face moving to another location, such as Poland or Paris”.
209.The Creative Industries Federation said that the Government should introduce “a visa for freelancers, who make up a third of the [creative] sector’s workforce in the UK”.
210.Extending the tiered visa system to EU nationals will create an unmanageable barrier to finding and hiring the talent that the advertising industry needs to maintain its global success. It will also dis-incentivise EU freelancers from working in the UK and further reduce the advertising industry’s access to global talent.
211.Some witnesses were concerned that extending the visa system to EU students would discourage such students from applying to UK universities. Professor Douglas West of King’s College London said that, “we attract excellent students from the EU and many of them want to stay in London and, if not London, the north or other hubs where they can go for marketing and advertising … we are very concerned that we may well lose them”.
212.The Government stated that foreign university graduates can apply for a graduate job and do not count towards the annual Tier 2 (General) limit of 20,700 places. The Government said that it was “creating a visa for graduates wishing to undertake a corporate internship … related to their degree. We also allow all completing PhD students to stay in the UK for an additional year to work, gain experience in their chosen field, or set up as an entrepreneur”.
213.However, Sally Chan of the University of Leeds Business School told us:
“The visa situation makes the process of gaining employment by international students at British agencies very difficult … my international students are keen to gain experience in Britain but I have yet to meet one international student (and I teach about 200 ad students every year) who has secured employment at a UK agency”.
214.Rahul Batra said of the post-study visa which was abolished in 2012 that when “you came as a student, you could work two years after that with any employer and gain some experience. Ever since that has been scrapped, the numbers have dwindled and people do not want to come here anymore”.
215.Raphael Salama, WPP Fellow and Account Manager at AKQA, noted that the current visa system is beyond the reach of many foreign graduates: “I went to university with lots of foreign people who were on Tier 4 visas and I found the difficulty that they had in terms of staying in the UK afterwards remarkable … the criteria they had to hit, in terms of a £20,000 starting salary, £945 in savings, to access a Tier 2 visa seemed nonsensical to me. A lot of people cannot get a job as soon as they finish university—barely anyone does—but yet we just are getting rid of them”.
216.Professor Sean Nixon of the University of Essex said “The industry would benefit from an approach to higher education that ... relaxes the current draconian terms of Tier 2 and Tier 4 student visas”. Professor Jonathan Hardy said that international students should be “exempted from the cap on Tier 2 visas for at least one year after graduation”.
218.As noted above, the Government’s policy is that the UK’s departure from the European Union will lead to further changes in the UK’s immigration system.
219.Rahul Batra said that the Government was not mindful of the views of business: “I sit on the executive committee of the Home Office, and I have noticed that they call us, seek our views and then do what they want to do. It is not helping the businesses”.
220.Stephen Woodford said of the UK immigration system following the UK’s departure from the European Union: “We would like it to be as near to the status quo … because it has worked very, very well for us. It does not seem to be displacing British jobs. We have a bigger industry because of [its] global performance”. It would be “paradoxical to think we are going to have a much more restrictive immigration policy and, at the same time, go global. The best way we can secure our future is to be as open as possible”.
221.The Government stated that “we hope to seize the opportunity created by our departure from the EU to turn outwards as Global Britain, and to make UK advertising visible to new global markets … We want to be clear that the UK advertising industry is open for business”.
222.Matt Hancock MP told us: “We have to attract the brightest and the best from wherever they are in the world—EU, non-EU and rest of the world—and at the same time we must grow our own talent”. The Government has stated that the forthcoming white paper on immigration will outline the longer-term plans for the UK immigration system. The Government has not set a publication date but promised that it will be published in the coming months.
223.The UK advertising industry is a global leader because it has access to talented individuals from around the world, including the EU. These workers provide the cultural, creative, digital and languages skills which enable the UK to win advertising accounts from multi-national companies for global campaigns. The creative industries including the advertising industry are largely project-based which requires the rapid recruitment of freelance staff from the broadest field of talent. This type of recruitment is not possible under the UK visa system which is slow, expensive and restricted.
224.As the UK leaves the EU, the Government must develop an immigration policy that works for businesses. We recommend that the visa system must be made easier and cheaper to navigate for both individuals and companies.
225.In particular, the Government should consider the following recommendations which relate specifically to the advertising industry but may also apply to other industries which because of their global nature rely heavily on international workers. It is the responsibility of the creative industries including advertising to nurture the domestic workforce. They must not neglect their responsibilities in developing the creative talent within all sections of society including disadvantaged socio-economic groups.
226.We recommend that the Government should allow foreign nationals to work in the UK following an offer of a permanent employment contract by a UK advertising employer. In negotiating the terms of free trade agreements with the UK’s trading partners, the Government should seek reciprocal arrangements for UK citizens wishing to work in those partner countries.
227.We recommend that the Government should introduce a creative industries’ freelancer visa on the basis of reciprocal agreements with nations around the world. This will allow foreign freelancers to work in the UK and grant UK freelancers the right to work abroad.