How Will Brexit Affect the UK Skills Shortage?

  • Date posted: 03 Nov 2016
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With some big announcements in the previous weeks, there’s plenty to discuss about Brexit. Here are some of the questions and concerns that have been voiced to me:

Will lower-paid foreign workers have a harder time working in the UK post-Brexit?

All of the talk about control of our immigration is related to identifying the skills and positions that are in demand, and who will provide the best value for our economy.

There are opposing arguments for whether roles such as construction and nursing, which are lower paid jobs, would fall under areas where skill shortages need to be addressed. It appears that the focus will be on roles in areas such as technology, finance and engineering. As a company that works within these areas, we always feel this is important, but I am well aware there is equally large skill shortages in other areas.

From my understanding of the visa system as it stands, and the changes to tier 3 visas and HSEs, it is difficult to get a work permit if you are not an EU resident. So I can only assume that if we use the same system it will be increasingly difficult for lower paid foreign workers to work in the UK.

How this will affect the economy remains to be seen. Surely it is one of the key platforms for the Brexit argument to return these types of jobs to UK nationals, yet to achieve this will require a huge amount of investment in education and training of UK nationals.

 

According to APSCo, since Brexit placements are down from 2015, but permanent roles and overall salaries are up. What does this say about how recruitment will fare Brexit?

Recruitment is based on skill shortages which is based on there being more jobs than available candidates, and as long as the economy continues to grow (or remain around the same level) then we will see high demand for recruitment in the UK, particularly for the niche roles we spoke about in question 1.

What is a worry, and something that has been a great positive for the UK economy, is continued foreign direct investment. The UK has historically been one of the most popular countries for FDI in the world due to our political climate and open economy, and having businesses move to the UK, open in the UK and grow in the UK means there is constantly new potential clients, jobs and places to work.

There’s also been big announcements from companies like Renault, JP Morgan and Fujitsu on how they are intending to reduce their UK work staff in light of Brexit. If this trend continues, then this could be a problem for the recruitment industry. On the flip-side, there are many companies such as Microsoft, Barclays and SoftBank (which was just acquired UK business ARM holdings) that have pledged to continue to work in the UK because we are still a big economy, even without the EU.

So whether Britain is in the EU or not, the UK economy is still large and robust - what the government should focus on is making sure it is still as attractive for foreign investment, but also drive a competitive and positive business environment for those UK businesses that are growing from industrialisation in the country. Recruitment is based on the success of the economy which drives skill shortages and demand for a workforce.

 

Is it only hiring companies that determine the state of the jobs market, or do jobseekers affect this too (no confidence in moving jobs)?

One of the things that I have witnessed, and that clients have reported to us since the vote, is that EU nationals working in the UK and those thinking about working in the UK are worried about their future in the UK, and are therefore thinking about leaving or not coming to the UK in the first place. As demand for these type of candidates (particularly those in GCS’ core markets) are still high, this will affect the state of the jobs market, leaving businesses with less choice. In the short term, this will potentially drive salaries up, but in the long term - as I spoke about earlier, may result in the companies having to look elsewhere.

Having been in our Dublin office in the last few weeks, I’ve witnessed a huge influx of candidates from around the EU looking to work there, and we have many incidences of EU candidates who once would have seen the UK as the leading choice of a place to work now fearing for their future after Brexit. One of the best things that the government could do is to give clarity and commitment to EU candidates currently working in the UK that their future will be assured – they will not have to leave the UK however negations go.

I heard an excellent piece of practical advice that recommended talking to all EU employees and making sure they apply for permanent residency in the UK, which any EU resident can do after 5 years of living here. We believe that any permanent resident of the UK cannot be forced to leave the country, even if the UK goes for a “hard” Brexit which will not allow migration flow between the UK and the EU.

 

What can the government be doing to tackle the skills gaps internally, and in which areas should it be focussing?

As mentioned earlier, I believe that there is a system of immigration following Brexit that is focused on reducing skill-shortages in sectors such as finance, tech and engineering. The important sectors that would be affected are health, construction and retail, who all utilise a very high proportion of their workforce from the EU.

The government needs to improve, increase and invest in its commitment to apprenticeships, revise the type of education in schools so that it’s more vocational, and ensure that the next generation of workers in these areas are given the opportunities to start their careers as soon as possible. These industries are ones that, while not creating the same profit headlines, are the industries that keep the country moving, working and living. So while we focus on insuring that business and industry are protected by Brexit, we should not forget the important infrastructure that our businesses need in order to be successful.

 

Thanks for reading and check back in a couple of weeks for more insights into Brexit and its effect on the recruitment industry, where I will continue to to pass on practical advice and address your Brexit worries.

 

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