Uncertainty over future arrangements with the EU is ‘no excuse for inaction’, says CIPD expert
Employers have been chastised after it emerged that fewer than one in five had begun to prepare for post-Brexit restrictions on hiring European workers.
A poll of just over 1,000 HR professionals found that just 15 per cent of organisations had started to prepare for the impact of restrictions on EU labour – despite 42 per cent of employers expecting such restrictions to damage their UK operations.
The CIPD/Adecco Group Labour Market Outlook also found that, of the 15 per cent that had started preparatory work, 43 per cent were focusing on strategic workforce planning, while 39 per cent were reviewing their resourcing strategies.
Only 22 per cent were planning to boost investment in apprenticeships, with a similar number looking to build closer links with schools and colleges.
CIPD labour market analyst Gerwyn Davies said: “Uncertainty over the UK’s future arrangements with the EU is no excuse for inaction. From all of the information we have, it’s inevitable that there will be restrictions on EU migrant labour after the UK leaves the EU and employers must be prepared for this.”
Although the terms of the UK’s exit from the EU are still to be finalised, chancellor Philip Hammond said in September that the government “cannot accept uncontrolled free movement of people”.
Davies said: “It’s vital that the UK government considers making intermediate arrangements when introducing changes to immigration policy.
“This will ensure that employers that have come to depend on EU migrants to deal with recruitment difficulties or skills shortages have time to review their recruitment and training and development strategies ahead of Brexit.”
While prime minister Theresa May’s bid to start formal negotiations over the UK’s exit from the EU has hit legal complications, the impact of the vote to leave is already being felt in boardrooms.
Nearly two-thirds (62 per cent) of respondents to the Labour Market Outlook said their organisation employed migrant workers, and nearly a quarter (23 per cent) of these employers said they had seen evidence that EU migrants were considering leaving the UK in the next 12 months as a result of the referendum result.
More than half (54 per cent) of those with stated intentions to recruit EU migrants over the next 12 months believed their task would be harder than before the vote.
Only 6 per cent of employers surveyed said they favoured a ‘hard Brexit’ based on World Trade Organisation rules. Many employers favoured a European Economic Area-type arrangement including free movement of labour (26 per cent), a situation similar to existing trading arrangements (10 per cent) or bilateral free trade agreements (10 per cent).
Adecco Group UK and Ireland chief executive John L Marshall III said the referendum outcome should be a “wake-up call for employers”.
“[They] need to adopt a more strategic approach to workforce planning, investing more in their own staff and engaging with educational institutions to improve the UK’s domestic pipeline of talent,” he added.
The report also found that the net employment balance – based on the difference between the proportion of employers expanding their workforces and those reducing their workforces – had fallen to +22 compared to +27 in the previous quarter.
Real wages also look set to fall, with employers anticipating median basic pay settlements of just 1.1 per cent in the next 12 months.