In a 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 are not willing to sit out the Brexit negotiations while their future immigration the UK hangs in the balance.
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 for unskilled and low-skilled workers – roles which generally speaking have not been attractive to UK-born candidates.
Since there is no indication that there will be decline in the demand for low-skilled and unskilled labour – this raises the question 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:
- 19% of employers are considering retaining older workers
- 13% of employers said they are likely to relocate some or all of their operations abroad
- 17% are looking at increasing investment in skills
- 13% said they are likely to relocate some or all of their operations abroad
- 17% are looking to hire more apprentices
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 of this short-term dearth will be an increase in unfilled jobs, which will inevitably result in a slowdown in growth.
The most obvious solution, to hire domestic labour, may not be as easy as it sounds or perhaps should be. The survey results raise wider strategic questions around motivating domestic labour to take on unskilled and low-skilled roles.
An alternative is for employers to look further afield, beyond the UK and Europe, to meet their talent needs. Hiring overseas workers requires 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 to hiring form overseas, including application charges, Immigration Health Surcharge (£200 per annum), any 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
If you hire EU workers, it has become business-critical to understand the extent of your organisation’s reliance on this cohort.
While the current rules allow free movement for EEA nationals, you need to understand now the specific implications on your organisation faced with the threat of an exodus and in anticipation of restricted rights to work and stay following formal Brexit,
How many EU workers do you employ? What are their roles? What can you do as the employer to help safeguard their position in the UK? Could you support employees in seeing to attain permanent residence?
Communicating your commitment and support of EU employees can help to provide reassurance for workers of their value and future place.
UK employers should not ignore the possibility EU workers leaving in response to the Brexit vote. The question to answer is how to meet talent needs without decreasing availability of or access to EU workers.