Brexit: The Cost of Losing a European Workforce
By Lee Biggins, founder and managing director of CV-Library
Already the subject of many debates and this year’s hot topic, the Brexit has been monopolising headlines across the country. While much of the debate has centred around the UK’s immigration policies and how a Brexit could change the flow of non-UK nationals into the country, it’s important to understand the serious financial implications that a lack of European talent could have on UK businesses.
With the government, and the nation, split on whether to stay or go, CV-Library turned to the UK’s leading recruitment experts to find out exactly how they feel. It’s no secret that the country is already in the thick of a skills shortage, so it’s unlikely to come as a surprise that today’s recruitment professionals have real concerns over what a Brexit could do to an already-struggling workforce.
Lauded as the year of ‘candidate power’, 2016 has so far seen businesses forced to compete for the best candidates, raising salaries and offering workplace incentives to entice talented recruits to come on board. With a Brexit looming, the potential loss of foreign talent, combined with the UK’s own skill shortages, has the potential to be a real nightmare for businesses. We recently surveyed experts in the recruitment industry, and almost half (43%) admitted their concerns that a Brexit would reduce access to skilled workers, further highlighting the financial consequences that should be considered in the run-up to June’s referendum.
High-turnover industries, such as Hospitality and Retail, often rely heavily on sourcing non-UK nationals to fill these roles, while it was recently revealed that Construction is the most common occupation of foreign-born workers in the UK. The reality is that these sectors would all likely suffer as a result if access to skilled EU workers was revoked, essentially placing more strain on these already-struggling industries. With no real guidance in place for businesses which currently employ non-UK staff, and what their status would be in the event of a Brexit, Britain’s businesses are facing real uncertainty when it comes to sourcing, and potentially retaining, the best talent for their companies. Furthermore, many UK businesses are already rushing to finance UK permanent residencies for their EU workers as a precaution, showing that the financial impact is imminent.
Perhaps unsurprisingly, many businesses are scrambling to find plausible solutions to a potentially disastrous situation for the UK’s economy; if qualified talent can’t be found within the UK, it’s likely that the most feasible option for employers will be to invest in training to upskill their current workers. Recent research has already uncovered the dire state of the Engineering and Education sectors, with businesses admitting that they are forced to take on unqualified workers and train them on the job. While the British government is proactively attempting to tackle the current skills shortages by placing more emphasis on apprenticeships, the real challenge will be in providing the nation with the necessary skills, particularly in industries that have previously failed to attract home-grown workers; these sectors will have no choice but to pull out all the stops.
While a Brexit would inevitably mean that UK employers have to invest more in British workers, it is also likely to provoke a shift in the nation’s job market; essentially, the employees who do have the skills will be able to use this to their advantage, raising their salary expectations and demanding more from Britain’s businesses. Furthermore, if the influx of lower-paid labour from the EU is eradicated, this could also result in a pay boost for British workers at the lower end of the job market; great news for the UK’s employees, but a real predicament for employers, who will be faced with increased costs, as they find themselves spending more to recruit new staff while working to retain their current workforce.
Essentially, if the UK chooses to leave the EU, there could be major ramifications for its workforce; Britain is often seen as an international hub, and many large corporations choose to base their European headquarters in London. If the nation does decide on a Brexit, employers will be faced with a major lack of foreign investment to contend with, as well as a huge reduction in available talent.
Reports suggest that there are over two million non-UK born workers currently in the country, and should they be forced to leave the UK job market, the skills gap will only be further intensified. While Britain may finally be back in the throes of a buoyant job market after a damaging recession, this could all be set to change if it chooses to break away from the rest of the EU.
About Lee Biggins
CV-Library is the UK’s largest job site, with a database of over 9.8m CVs, founded in 2000 as a response to Lee’s identification of a need for an easy-to-use job board. With a £9k loan and help from a web developer, the CV-Library website was built.
The business is now one of the fastest growing websites in the country. Lee puts his success down to working incredibly hard, loving what he does and a strong desire to make the business the best it can be.