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Employers to Face Skills Shortages if EU Workers Leave UK

In a recent survey of over 1,000 UK employers conducted by the CIPD, more than a quarter reported their EU workers were considering leaving the UK in response to the Brexit vote and the resulting uncertainty around their immigration status.

The education and health sectors reported higher numbers still, at 43% and 49% respectively.

And it would be reasonable to assume these figures will in reality be higher, given many EEA workers may not have divulged their intentions to their employers.

EU workers in the UK

For UK employers across many sectors, it is hugely concerning that a sizeable proportion of EEA employees may not be willing to wait out the Brexit negotiations while their future in the UK is decided.

Compounding the suggestion of EU workers leaving the UK are figures showing declining numbers of EU workers coming to the UK since the referendum; from an average of over 60,000 during March, April and May 2016, this figure had halved to 30,000 during June, July and August 2016.

The UK’s reliance on EEA workers is evident. With over 2.35 million EU nationals working in the UK, they make up just over 7% of the total UK workforce.

Employers surveyed by the CIPD reported that EU workers have in particular met the demand to undertake unskilled and low-skilled work – roles which generally speaking have not been attractive to UK-born candidates.

Since there is no indication of a decline in the number of low-skilled and unskilled positions, this raises the question for employers – who will undertake the work left behind by EU workers?

Plugging the Gaps – Now and in the Future

If we are faced with an exodus of EEA workers, what options do employers have to meet their talent needs? The survey indicates a range of possible responses:

  • retaining older workers – 19%
  • investing in training – 17%
  • hiring more apprentices – 17%
  • recruiting more UK graduates  – 16%

The difficulty with many of these solutions is that they are longer-term, and will not help to fill immediate vacant positions. The likely impact will be a short-term dearth of labour replacing European workers, resulting in an increase in unfilled jobs and an inevitable slowdown in growth.

The most obvious solution, and that favoured by the Government, is to hire domestically. However, this may not be as easy as it sounds or perhaps should be.

There are wider strategic questions around motivating domestic labour to take on unskilled and low-skilled roles. And in specialist areas requiring high-skilled labour (eg tech, healthcare), there are already recognised gaps within the UK labour market.

An alternative is for employers to look further afield, beyond the UK and Europe, to meet their talent needs. Hiring overseas workers requires investment and compliance with immigration rules. For example, a sponsor licence is required to bring a worker to the UK from outside the EEA.

There is also a financial implication, which the Government is actively leveraging to discourage employers from hiring overseas.

Costs include visa application charges, Immigration Health Surcharge (£200 per annum), legal fees and the new Immigration Skills Charge, which is being introduced on 6 April 2017.

The Immigration Skills Charge will be levied by the Home Office as an upfront charge of £1,000 per licence holder per year. Small businesses and charities will be granted a reduced rate of £364 per holder per year.

Future talent mobility

While the current rules allow free movement for EEA nationals, faced with the threat of an exodus and the possibility of restrictions on EU citizens’ rights to work and stay following formal Brexit, you need to understand now the extent of your organisation’s reliance on this cohort.

How many EU workers do you employ? What would the business impact be if these workers were to leave over the coming months? Or if as a result of Brexit, the cost of hiring EU workers becomes prohibitive?

Communicating your commitment and support of EU employees can help to provide reassurance for workers of their value and future place. Going further than this, you can provide support to help formally safeguard their position in the UK. This could mean contributing to the fee for applications for permanent residence, or providing time off if needed to complete an application.

Conclusion

UK employers should not ignore the possibility of EU workers leaving in response to the Brexit vote. The question is how can employers meet talent needs with decreasing availability of or access to EU workers?

We are experienced advisers to employers on business immigration and compliance, including guidance on visa and settlement options available to workers.

We are working with employers to help support EEA national employees to secure their immigration status through permanent residence applications.

If you have any queries relating to immigration and talent mobility strategy, please get in touch.

 

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