Yet more foreigner bashing.
As someone who has been thru the work permit process I think what IDS said is a joke; it's jolly difficult (not to mention Expensive) to hire anybody from outside the EU; any qualified Brit has to be given preferential treatment already. To get my work permit my employers had to advertise nationally and then argue that I wasn't just the best candidate, but the only qualified candidate.
If he means Commonwealth citizens (Bangladeshis, Nigerians, etc.) then it's probably against the spirit of what the Commonwealth is supposed to be about, although I admit I'm not sure how strict the immigration controls are for them.
If he's saying "hire British over French/Polish/Italian/etc." then IDS is probably breaking EU rules. Or at least, he should equally endorse the German right to hire Germans over Brits, and the Spanish right to hire Spaniards over Brits, etc. For the matter, why not suggest that "British" firms and Brit-made products should be favoured over Italian/Dutch or Irish companies, too? I mean, that kind of nationalism would really help the UK export market. 
I dare say that people who really understand business (like the CBI) will not endorse IDS's view.