Labour shortages reported as EU workers leave
Author: Hayley Gilbert
Applies to: England and Wales
EU workers appear to be seriously considering their options following the UK's Brexit vote, and employers are unsure about how they will fill the vacancies left by the shortage of EU workers.
A report released by the Chartered Institute of Personnel and Development and The Adecco Group on Monday 13 February 2017 confirms that a substantial proportion of EU workers in the UK are considering leaving the country, and that employers do not have a clear strategy for filling their current unskilled and semi-skilled vacancies. The number of EU citizens coming to the UK to work is already declining, and the uncertainty over how the UK will look post-Brexit is likely to reduce the numbers further. The report is based on a survey of over a thousand UK employers, two thirds of whom currently employ EU nationals.
EU workers in the UK
The latest available figures from November 2016 show that there are 2.35 million EU nationals working in the UK, which is just over 7% of the total UK workforce of 31.8 million.
When asked why they employed EU nationals, a fifth of employers declared that this is because UK-born candidates are not attracted to the unskilled and semi-skilled jobs filled by EU workers. This indicates that the demand for EU workers is likely to remain at a high level, as such jobs will continue to exist and there appears to be no catalyst to encourage UK workers to change their attitude towards such work. With some employers also reporting that that EU nationals are more motivated and have a better work ethic, they are seen as attractive candidates. It is interesting to note that 27% of employers who employ EU nationals didn't know how many EU workers they employ, and therefore aren't aware of how much reliance they currently place upon this labour stream. Being aware of this information is vital if employers are going to create a successful strategy for filling vacancies left by EU workers, should they not be given the same freedom to work in the UK following Brexit.
The exit of EU workers, is this just the start?
Three in ten employers reported that they had evidence that EU nationals are considering leaving the UK in 2017. This increased to four in ten public sector employers and almost half of healthcare employers. The actual number of EU workers weighing up their options is likely to be much higher than this, as many will not have revealed their thoughts to their employers. In response to this, 13% of employers said they are likely to relocate some or all of their operations abroad, others (19%) are considering retaining older workers, 17% are looking at increasing investment in skills and another 17% are looking to hire more apprentices. While these strategies are likely to be positive for the UK workforce, they will not bear fruit immediately. They also do not address the concern that UK nationals do not want to work in the roles most commonly filled by EU nationals. Employers are already reporting high levels of vacancies, and their most common response is to leave the roles unfilled, which could lead to a brake on output growth in the future.
At the end of 2016 industry groups representing food manufacturers and supermarkets warned that food prices in the UK would rise without an adequate number of EU workers, who provide 'an essential reservoir of skilled, semi-skilled and unskilled labour'. This example shows that it is clear that the UK economy relies heavily on EU workers. A post-Brexit future without access to the EU labour force is not something that the UK is prepared for at the moment.
An uncertain future
Understandably the government have not set out their firm intentions in relation to EU workers, undoubtedly so that they do not undermine their future bargaining position after Article 50 is triggered. However this has provided little reassurance to those EU workers already in the UK, and figures indicate that EU citizens are already being discouraged from coming here. The number has almost halved since the referendum, from an average of over 60,000 per quarter to June 2016, to just 30,000 in the three months leading up to September 2016. We do know that the UK's future treatment of EU workers is completely up for grabs, and although Theresa May has said that she will be able to get an 'early agreement' on the rights of EU citizens living in Britain (whatever that means) there is no certainty.
So what can UK employers do now to prepare for such an uncertain future in relation to the supply of EU workers, who are so heavily relied upon in some industries? Taking the following steps should help:
- Audit your workforce. It sounds simple, but finding out exactly how many EU workers you employ will help you ascertain how reliant your business is on workers from the EU. This is not something that employers will have had to consider pre-Brexit, because the free movement of EU workers has been such a longstanding entitlement.
- Consider whether you want to do anything to help safeguard your current EU workers' status in the UK. Workers who have been in the UK for five years are entitled to apply for permanent residence, and for British citizenship once they have been in the UK for six years (they will need to hold permanent residence before applying for citizenship). Some employers are assisting their EU workers with these applications, by contributing to some or all of the cost, and allowing time off to enable applications to be completed. If EU workers are key to your business, offering assistance with these applications is a sensible precaution to take given the uncertainty over the future status of EU workers in the UK.
- Communicate with your EU workers, and your wider workforce too, about how much you value the contribution of EU workers to your business. Expressing the view that your EU workers' input is appreciated will undoubtedly help them to feel reassured about their immediate future. At the moment nobody knows what Brexit will mean for EU workers, but letting them know that you are aware that staff may be feeling insecure about their status, giving them a forum to ask questions (perhaps by nominating a member of the HR team as a conduit) and promising to communicate further in the future when more is known will go some way to settling anxieties.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.
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