DATA & OPINIONS
This article is an excerpt from our Procurement and Spend Management Insider Report, published earlier this year. The picture for recruitment seems surprisingly positive and any impact of Brexit has been difficult to gauge. We have picked up mixed messages but have looked into what we can find out in terms of real data around the workforce as many studies show we are at record levels of ‘employment’.
The CIPD (Chartered Institute of Personnel and Development) clearly has a strong interest in the labour market. It commissioned research that shows there was a 95% reduction in EU nationals joining the UK workforce between the referendum and Q1 last year and this has no doubt continued as their Autumn Employment Outlook indicated that 44% of employers were struggling to hire, particularly in certain niche areas and additionally that the number of non-EU nationals arriving has significantly fallen.
It may well be that this sudden reduction in the arrival of people with skills of all kinds coming to the UK is ‘counter-intuitively’ one key reason why the recruitment market has appeared to remainstrong. As the pipeline of candidates is significantly reduced vacancies are unfilled so remain ‘live’ as has been reported to us by a number of clients.
This may also back up why recruitment has seemed to be taking longer in many instances as vacancies are unfilled and stay advertised longer making it appear the jobs market is healthier than it actually is. The reality is a lower volume of vacancies but even lower fill/completion rates. CIPD evidence indicates a fall of 30% in the number of applicants to each role.
Ultimately as to whether this can be linked directly to Brexit may be a matter of personal opinion but the coincidence of workers not coming to the UK and rising skill shortages seems a clear one
This talent shortage will impact in a big way – it may just be ‘hidden’ for now. Organisations may need to plan ahead carefully and consider the implications of this candidate shortfall on their hiring plans.
The Institute for Employment Studies has also investigated the likely impacts on the employment marketplace of Brexit and has published a number of articles on this subject.
THE HR PRACTITIONER VIEWPOINT
Speaking to some of our HR contacts, many see the current situation as one of mitigating risks and the need to put plans in place. The typical view is that they have to assume that Brexit may well happen and that as things stand certain legislative changes will come in linked to immigration that needs to be thought through now.
If it doesn’t happen, so be it, but until that point they need to plan for the impact.
Many felt the CIPD research was correct and that skills shortages are becoming more acute so therefore staff retention (particularly of EU and non-EU staff) is seen as a very high HR priority.
In many organisations, HR is encouraging EU citizens to go through the new Government registration scheme as it seems likely to be needed (unless we stay in) and the new migration points system will likely be introduced in 2021 making it harder to bring people into the UK.
Therefore, HR people are quite clear that the labour market will most likely significantly tighten over the next two years until 2021 regardless of how we exit and then dependent on the deal the UK
strikes may prove even more difficult going forward.
In this context, their view is that organisational approaches to recruiting and the job requirements may need to be totally reviewed and flexed. Be ready for HR initiatives on retaining staff as they see this is likely to be imperative especially in business-critical roles.
Simplistically the HR view is that since the referendum it is harder to recruit and is highly likely to get significantly harder.
Organisations will need to think very carefully about resourcing. One key observation is that when certain key staff resign it may well be that counter offers will become standard.
In a tight labour market organisations may not be able to afford to lose certain skills and in this context, it will become a highly candidate driven market with the highest bidding organisation winning.
We’ve seen significant evidence of this in the past six months with counter offers more common during that period than has been the case for several years. Interestingly many senior candidates are expecting such offers before they resign and are even factoring this into their negotiations.
We are advising our clients to be more mindful of this challenge and have seen several candidates resist such overtures as a result, but ultimately there is a limit to how much you can manage this risk.
The Institute for Employment Studies also has investigated the likely impacts on the employment marketplace of Brexit and specifically the freedom of movement. This article offers some interesting reading.