Last June, the world woke up to a vote by the citizens of the United Kingdom deciding to withdraw from the European Union — also known as Brexit. No one knew then what to expect or what the exact timing would look like. It’s now becoming much clearer as the UK government started the withdrawal process through Article 50 on March 29, 2017, putting the UK on course to leave the EU by April 2019.
This two-year plan for the UK to exit the EU is still in its early phases, but there is no doubt that it will impact the migrant labour market and the overall British business environment. The UK has a vast, diverse and high proportion of people with specific skills who are employed in the country from all over the world — as full-time workers, contractors and seasonal employees. In fact, a large pool of highly skilled individuals working in the UK come from other countries that are part of the EU. According to data from the Office for National Statistics, EU migrants make up nearly one-third of all migrants in the UK, and EU nationals constitute 64.3% of the migrant workforce in the UK.
With these numbers, it’s important to look at what impact Brexit will ultimately have on organizations with a high population of foreign workers. We likely will see a number of these workers migrate back to their native countries, leaving a skills gap of talent for trade, technical and professional skills.
Industries in the UK such as hospitality, technology, construction, agriculture, finance and retail rely on talent from all over the world. British businesses will have to redefine how they find and retain skilled workers in these industries and beyond to ensure a sustainable and healthy economy.
According to the Association of Professional Staffing Companies (APSCo), “One of the biggest challenges for firms across the next 12 months will be balancing short-term needs, long-term objectives and economic uncertainty in a very candidate short market.”
Organizations must create plans during the next two years to guide them in making informed, strategic decisions about how they recruit and retain talent in the UK as access to workers with specific skills is affected.
Below are steps that companies can take now to help them prepare:
- Map Talent: Review current talent within your organization to determine demographics and breakdown of the type of workforce that you employ — such as full-time, temporary and contract.
- Analyze: Understand the skills that you have in place today, what you may lose, and what you may need in the future.
- Assess Programs and Training: Hiring procedures, training and educational programs will be important to develop adequate resources for filling any skills or talent gaps resulting from Brexit. Start looking at these programs now so that you can plan for the future.
- Commit to Recruiting: Remain committed to investing in recruitment and retention, including recruiting talent that may have left the UK for opportunities in other countries.
- Invest in Technology: From analysis and program management to talent sourcing and fulfillment, managing an efficient and evolving workforce is critical. Many companies now rely on staffing agencies for workforce management, but that will change. Managed service providers (MSPs) bring technology that can track and analyze the talent supply chain across countries, including monitoring moving contracts, which will be central to any large enterprise looking to develop a more formalized workforce strategy.
The latest report from the Recruitment and Employment Confederation (REC) states that the recruitment industry is bigger than ever before. The value of the recruitment industry to the UK economy was £35.1 billion in 2015, 9 percent more than the previous year, and more than the food and beverage industry (£32.6 billion) and advertising and market research industry (£16.9 billion). That number will continue to rise as recruitment becomes an even more important focus area for organizations.
The two years will be critical in developing the UK’s talent supply chain of the future. And, with British Prime Minister Theresa May recently calling for a snap general election on June 8, Brexit will once again be a key topic of discussion. Business decision makers must remain nimble and have plans flexible enough to adapt to a rapidly changing environment – maintaining a responsive recruitment and retention programme that requires constant focus.
Now is the time to be thoughtful and strategic about managing your talent pool and growing your business, preparing you for success when Brexit is complete.