Gudrun Limbrick looks at trends and developments in recruitment since the vote to leave the EU.
It was back in February 2016 that a referendum about the UK leaving the EU was first announced. There followed several months of campaigning, discussion and targeted marketing. The political fallout from the close, but unexpected, result dominated the media, social media, and many of our minds, for an interminable time. It was in March 2017, after much political wrangling, more campaigning and endless media time and inches, that the Government invoked Article 50 of the Treaty on the European Union which represents the official start of our journey away from the EU. Brexit has been directly responsible for a complete change of personnel and tone in the British Government and a general election in June 2017 which arguably served only to increase uncertainty and muddy already muddied waters.
We are heading straight for the second anniversary of the referendum first being announced. That is 24 months of discussion, campaigning, endless speculation and political instability. In many ways, it all seems to have been going on for much much longer, and public interest, and patience, in Brexit is undoubtedly beginning to wane.
One of the main problems with this entire Brexit episode seems to be that it is swathed in a thick cloak of uncertainty. The result of the referendum was a surprise and, as such, appeared to be accompanied by no planning whatsoever. Brexiters and Remainers alike were sent into an immediate tailspin with the media and social media alike relying almost entirely on speculation to inform the public. There was nothing firm to cling onto in terms of timescales, people, cost implications or, in fact, what Brexit will look like at all. This is a big change, but, after nearly two years of debate, we still have very little idea how it will manifest itself.
Business needs to be able to predict the future and make informed decisions about what is heading this way. Without knowledge about the future, investment decisions are far more difficult and this, of course, has a knock-on effect on all aspects of business, including, of course, recruitment. Brexit has provided us with the biggest uncertainty we have ever had and the uncertainty is in areas of direct relevance to business — trade with the EU, and the labour supply from the EU as well as the more usual uncertainties around inflation, the value of the pound, interest rates and so forth. It thus would be of no surprise at all that businesses might feel an impact or expect to feel an impact in the very near future. Currently, however, the impacts so far are a mixed bag for business.
Business investment is certainly showing signs of decline in the UK. It seems like this is a reasonable response to uncertainty in the near future. If businesses can postpone investment, it seems like some are doing so. Last year saw the first decline in investment since 2009. A slowing of investment would be expected to have other effects on business — such as a slowing of recruitment.
Looking at the other side of business, we have, in recent years, been big shoppers. Initially, post-Brexit vote, the retail market stayed strong and we all carried on shopping as if nothing had happened. However, there are beginning to be some signs that this may be beginning to wane. According to Office for National Statistics (ONS) data, retail sales experienced an unexpected fall in September. All eyes will now be on the Christmas sales data to see how that fares against last year’s strong showing.
In terms of unemployment, the impact of either the fall in investment or the fall in such demand-side elements as retail sales do not seem to be having an impact. In fact, UK unemployment fell in the second quarter of this year bringing the rate down to 4.4% which is actually the lowest it has been since the mid-1970s. A study announced this month by Prospects (a careers specialist) has found that graduate unemployment is currently at just 5.3%, the lowest it has been since 1989. However, this is, in part, due to a significant increase in the number of graduates staying on in education so they have effectively postponed looking for employment for at least a year.
It would seem that these broad brush strokes intended to indicate recruitment health are giving a mixed picture. While the big business investment figures are down, retail has generally been strong until now, and there is no clear impact on the broad unemployment and recruitment figures. There are so many trends and impacts on these trends that a Brexit impact on recruitment may be masked by other factors or may not be present at all.
Where there are clearer indications is when one takes a closer look at some of the elements of recruitment rather than these broad brush strokes. For example, London is known worldwide as an epicentre of the banking world with the big banks taking pride in having their base in the UK’s capital city. However, a number of the big banks and finance companies have announced their intentions to leave London, in part or as a whole enterprise, for other European cities once Brexit takes shape. Axel Weber, HSBC and Goldman Sachs for example have all said that they may go leaving thousands of staff to, presumably, relocate or lose their jobs. And it is not just finance that is moving away. KPMG research conducted earlier in the year found that a third of manufacturing firms plan to move wholly or partly out of post-Brexit Britain. Companies moving out of the UK are likely to encourage others to move out, as companies need to be with other like companies for a number of practical and prestige reasons. A trickle of companies leaving, could well develop into a torrent. And with them goes UK jobs.
There are also signs of a disturbing trend rearing its head. Reports of job adverts including a “Europeans need not apply” caveat are being reported. The exclusion is aimed at EU citizens living in the UK. 3million, the campaign group for rights for EU citizens in the UK, has collected a number of examples of such adverts including one recruiting a German speaker who must have a UK passport. This trend is no doubt due to the ongoing uncertainty about what happens to people from the EU living in the UK post-Brexit. Without clarity, recruiters are making their own decisions about what Brexit means, well before it has happened.
All areas of Brexit are uncertain currently — what Brexit will look like is unknown and the current and future impacts of it on British business in general, and on recruitment specifically, are unclear. This month, Michael Barnier, the EU negotiator, is reported as having said that agreement on a free trade deal with Britain could take years. This is a key factor in the future of many UK businesses and, for many, the future looks bleak without a deal. However, it looks like we will be wrestling with an unknown future for a long time to come.
Last reviewed 15 November 2017