Brexit is looking more and more like it will be a defining moment in the UK’s patterns of employment. It’s also looking more and more like an event that will make or break Recruiters’ careers. So whilst another month of Brexit headlines may leave all camps feeling weary, now is not the time to stop thinking about the ramifications for Recruitment teams and staffing patterns. Quite the opposite, it’s time to invest in your skills and partner with the providers that can help you to emerge triumphant from whatever scenario the future may hold.
Think about it for just a minute. Whatever the outcome, there is certain to be a change in the entitlement of different nationalities to work in the UK market. That means your ability to source candidates and engage with candidates is going to need to adapt. Already numerous countries discussing potential trade deals with the UK are stressing that an easing of the criteria to secure the right to work in the UK will be fundamental to the signing of any trade deal.
It may well come to pass that the countries you’ve historically been reticent about hiring from become the ones where you’re now more readily able to attract talent and secure for them the necessary work entitlements. Whereas the simplicity we’ve taken for granted of hiring EU nationals may become a degree harder – with such workers also less inclined to move to the UK following Brexit. That’s a game-changer for anyone involved in Recruitment.
The unemployment rate has fallen
Of course there are other ways Brexit will impact us all in Recruitment, not least of which is its impact on the state of the economy. In the weeks leading up to Brexit, we witnessed the Bank of England, the IMF and the OECD all voice the concern that a UK vote to leave the EU would take its toll on employers and push up unemployment. However, unemployment actually dropped to its lowest level in 11 years towards the end of the year – on the back of the surge in export sales that the lower £ has stimulated.
Releasing the results of their 20th annual Global CEO Survey, PwC have just revealed that UK bosses are unquestionably in hiring mode. 63% expect to grow their workforce over the coming 12 months, compared to 52% of their global counterparts. Similarly, only 10% expect headcount to decrease, down from 20% in 2016. But access to key skills is considered to be the single biggest business threat facing their organisations. 83% of UK bosses are concerned about how to get hold of key skills, up sharply from 71% last year. Any change in eligibility to work in the UK will only make those shortages more acute in the short term – and create a bigger competitive advantage for those companies who adapt most successfully.
The intriguing thing here is that the UK economy may not only grow at a faster pace than was anticipated, but also the pattern of growth and therefore employment demand may have significantly shifted. Certain industries are booming as a direct consequence of these economic shifts, whilst others are struggling. If those patterns continue then the hiring hotspots and the talent shortages are going to look markedly different than they were just a couple of years ago. Recruiters will need to adapt to thrive.
What will happen to employment laws & EU regulations?
That’s before we talk about regulatory changes. Changes in employment law will undoubtedly have an impact on UK employers. At this stage it’s difficult to know what laws will be carried over and what will be shelved. What we do know is that in a written statement, David Jones, minister of state at the Department for Exiting the European Union said: “The government will bring forward legislation in the next session that, when enacted, will repeal the European Communities Act 1972 and ensure a functioning statute book on the day we leave the EU. This great repeal bill will end the authority of EU law and return power to the UK. The bill will convert existing EU law into domestic law, wherever practical.” On the one hand this could mean business as usual for laws and regulations. However, there is also the possibility that the great repeal bill may include a ‘sunset clause’, which would mean EU laws expiring unless they have been explicitly backed by the government. Were that to happen, it could affect workers’ rights through laws such as the Acquired Rights Directive, the Collective Redundancies Directive, and the Working Time Directive. All would have knock-on effects on recruitment teams.
Uncertainty over trade deals and corporate tax regime
It now looks increasingly likely that reductions in freedom of movement will be pushed through – and that Britain will lose its unfettered access to the single market. But new trade deals with other countries may serve to offset this – and there’s even the possibility of the UK bringing in more attractive corporation tax rates to maintain competitiveness.
Last year, Japanese ambassador Koji Tsuruoka stressed that “if the way Brexit ends up does not provide companies with a prospect of making sufficient profits to continue operating in the UK, of course there’s no option they cannot choose – all options are open.” We’re already starting to see the flow of Banking jobs to other European capitals that were predicted by some at the time of the vote. So a changed labour market seems inevitable, regardless of the ultimate deal that’s done.
However, with change comes opportunity. There may indeed be positives for some employers. Those sectors that remain strong may have the opportunity to poach talent from other industries or attract new overseas investment. The ease with which different sectors can attract and hire staff we can expect to fundamentally change.
Against this backdrop, we’re seeing many employers carrying on with significant recruitment whilst some others are taking a more cautious line. For help sourcing top talent to join your company, please get in touch with one our team and we can give you the flexibility in your sourcing capabilities that the current market climate demands.