HR · 13 June 2017

Employers urged to get real and start preparing for post-Brexit labour market

post-Brexit labour market
Despite the imminent end to freedom of movement, a quarter of employers expected to hire more EU nationals in the next year

Almost half of UK business owners employing EU nationals are “totally unprepared” for the sudden fall in migration in a post-Brexit labour market, according to new survey findings.

In a study of founders employing migrant workers, by the Resolution Foundation think tank, 17 per cent of respondents expected no changes to freedom of movement in a post-Brexit labour market, while almost a third believed migrant workers would be welcome if there was a job offer.

Meanwhile, 46 per cent of those relying on EU workers did not expect their migrant workforce to reduce in the next 12 months, while a quarter even expected the number to increase.

Although formal Brexit negotiations are yet to begin, the referendum in June 2016 has already had a considerable impact on migration figures. Net migration fell from 335,000 on the eve of the vote to 248,000 at the end of 2016.

With freedom of movement set to end, the prime minister’s current position is to impose a further cap on migration figures, rather than let demand dictate numbers.

Alongside the government line, the latest findings suggest a worrying gap in employer expectations of what a post-Brexit labour market means for their business.

According to Torsten Bell, director at Resolution Foundation, “it’s not just government that needs to prepare for Brexit”.

“Many British firms are totally unprepared for this change, particularly when it comes to migration. Ministers have compounded this uncertainty by choosing not to answer questions over what a post-Brexit immigration regime might be,” Bell said in a statement.

He added: “Whatever people’s views on Brexit, the journey – not just the destination – matters hugely to growth, jobs and living standards. Now is the time for both firms and government to focus on how we navigate that journey and the changes to our labour market it brings.”

Looking at what employers wanted from a post-Brexit labour market, two-thirds said either no change to freedom of movement or allowing migration when a job was available was essential.

Stephen Clarke, the think tank’s policy analyst, agreed there was a “stark gap” between what business owners needed from a post-Brexit immigration system and the new government’s stance.

“Reconciling these differences, and giving businesses enough to plan for a new regime is absolutely vital,” he said.

Firms in “migrant-reliant” sectors, such as agriculture, food manufacturing, hospitality and construction were most at risk, Clarke warned, and he urged firms to re-think strategies.

He added: “In these sectors business models may need to be rethought, new temporary worker systems navigated or failing that operations closed or moved abroad.”

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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