Brexit continues to cast a shadow over employers

10 June 2019

The latest deadline by which the UK must decide whether and how to leave the EU may still be several months away but new figures from the Recruitment and Employment Confederation (REC) suggest that uncertainty about Brexit remains a major worry.

The latest REC JobsOutlook shows that employer confidence remained close to the record low levels reported in April, with faith in the British economy and in making hiring and investment decisions in their own businesses both rising by just 2% to -29 and -3 respectively.

The Confederation’s Chief Executive, Neil Carberry, said: “The Brexit extension has pushed the threat of a ‘no deal’ Brexit into the autumn, and the ending of our survey’s strong downward trend in confidence reflects this. But it is a temporary reprieve, with businesses stuck in a familiar holding pattern”.

Employers need the Government to secure a sustainable and smooth outcome to the Brexit process, he went on, although even then their problems will not be at an end.

They remain particularly concerned about being able to find the right people to expand their business when confidence returns, as many firms already have little surplus workforce capacity.

Engineering and health and social care employers are most concerned in this respect.

In fact, the REC report shows that 80% reported having little or no surplus capacity in their workforce, such that they would need to take on extra staff if demand increased. This rose to 85% among organisations with more than 250 employees.

Responding to the figures, Mr Carberry said that a key part of the post-Brexit settlement must be an immigration system that is open to the skills and labour employers need.

“Scrapping the £30,000 salary limit on visas for non-UK citizens would”, he concluded, “be a big first step to securing this, protecting key sectors including the NHS.”

Comment by Croner Associate Director Paul Holcroft

Brexit remains a worry for many companies and we still do not know how much it is going to affect employers going forward. What is clear is that companies may be facing a labour shortage over the next few years and need to be ready for this.

There is no guarantee that a future immigration system will be enough to provide the skilled individuals employers might need and they should be prepared to explore new ways of filling key roles.

This could be done by focusing their attention on upskilling their current staff, identifying those with potential and providing training to get them to the level required. By taking this action, employers can help an organisation to reduce its recruitment costs and allow it to better utilise the capabilities of its current workforce.