A no-deal Brexit could cause chaos for UK employers

Another week of Brexit, and another week of questions and concerns for UK employers.

It has been suggested that UK business are facing the prospect of a recruitment crisis, should we fail to conclude negotiations with the European Union with a comprehensive deal clarifying how our interlinking employment laws and regulations will look once we have left the bloc on 29 March next year.

With analysts suggesting that firms within the UK could be vulnerable to losing employees due to the uncertainty surrounding the citizenship and residency rights of EU nationals, people are rightly asking questions about where their business’s future stands.

Whilst there will be no change to the rights of EU citizens and their families living in the UK until 1 January 2021, we have seen following the referendum result that many workers have already been put off coming to the UK, and it’s a worry for employers that the lack of clarity of where they will stand in two years’ time is an impending risk that could encourage workers already here to go back to the continent.

Research undertaken by the employment consultant Mercer estimates that the size of the British workforce is expected to rise by just 820,000 by 2025, a figure that signifies a dramatic drop in the numbers from the previous decade, when almost 2 million people entered employment – something that could have serious repercussions for the health of the economy, and the competitiveness of UK businesses.

Another area that would feel the damage of a no deal Brexit more forcefully than some is the UK’s healthcare sector.

Since 2016, a total of 7,043 nurses from the European Economic Area have left the UK’s Nursing and Midwifery Council register, and in the 12 months following the Brexit vote, the number of EU nurses applying to work in the UK fell by 96%.

With the healthcare system already under immense strain, thanks in part to the nation’s aging population, this recruitment crisis could pose an additional threat to an already creaking NHS.

One tactic that might transcend the potential chaos likely to derive from the UK’s exit from the EU could be the relaxation of laws for hiring new employees from abroad.

However, creating the structures and knowledge of external recruitment markets would still result in a period of upheaval for employers whilst such a fundamental re-adjustment of the recruitment policies and the accompanying legal processes are implemented.

Certainly, employment markets seem set to tighten, meaning companies will see themselves having to compete more ferociously in a bid to fill vacancies. This could mean companies need to consider increasing their investment in time and money to delivering an improved employer brand, as well as packages that offer more generous salaries, healthcare benefits and various other perks to secure what could become a scarce resource.

But without the complementary influx of non-skilled and skilled labour from overseas, employers shall continue to see a growing churn within the UK labour market as people are enticed from one place to another but with the same level of shortages remaining overall. And there is no way we can address the issue of productivity that has blighted the UK economy for so long in such circumstances.

We are seeing this already of course, in areas like IT, technology and digital roles, in construction, trades and engineering, in scientific and pharma roles, in driving and logistics, and so on. The lack of assurance and increased complications expected through leaving the EU means that these sectors will continue to struggle and could be at risk of their international competitiveness as a result.

With International Trade Secretary Liam Fox claiming that the likelihood of the UK crashing out of the European Union without an agreement now sits at 60-40, we are starting to see the extent of the challenge that employers from across the British economy will have to face as they seek to ensure that they are able to recruit to a level that enables them to remain even remotely productive.

We’ll shall see I guess, but as each day passes and we get nearer to next March, employers and jobseekers urgently need some assurances – the threats to the UK labour market are real and are being experienced now.

Matt Southall is Group Managing Director of Wales’ leading multi-specialist recruiter, Acorn www.acornpeople.com

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