(Updated) Employers: How to prepare for Brexit

29th March 2019 has been and gone, and Britain has not yet left the EU. While no outcome has ever been entirely certain throughout the Brexit process, now more than ever, there is a significant sense of confusion. The new key date is 31st January 2020, by which time the UK needs “to tell the EU what it wants to do.” This may mean another extension to the negotiations, although the possibility of leaving without a deal is looking increasingly likely.

So far, there’s been a lot of conversation about what exactly Brexit will look like for recruitment and employment. So, as Brexit continues to twist and turn, at Talent Works we’ve decided to sum up the effect the 2016 referendum has had on the jobs market. As well as this, we’ll discuss how to prepare for the outcome of a potential deal, or the increasing possibility of a no deal Brexit.

Employment levels are at an all-time high, and vacancies have risen to the “highest level since comparable records began.” It’s reported that “deal or no deal, UK jobs will remain hard to fill. So, it seems that no matter how we eventually leave the EU, the market will remain candidate driven. As a result, vacancies are increasingly harder to fill as top talent is harder to recruit.

According to Monster, the number of EU workers actively searching for jobs in the UK has dropped by 11.4% since the referendum. More specifically, Romanian search traffic to UK jobs has dropped by 52%, followed closely by Portugal (42%) and Poland (35%). This decline in Eastern European workers impacts the short-term jobs market, an area of recruitment which is most reliant on EU workers.

So, how exactly can employers prepare for a future that nobody can predict?

In such a candidate driven climate, recruiters become even more valuable. A recruiter cultivates a talent pool of potential candidates by talent mapping in specialist areas. This makes recruiters invaluable when the jobs market is so strong, particularly where there are skills shortages. This awareness enables them to pair candidates with businesses before a vacancy is live. Often, recruiters do this by focusing recruitment efforts on passive job seekers to counter a restricted labour supply.

Resultingly, when the market is candidate-driven, candidates are able to negotiate in their own interests. When talent is so sought after, the competition in the market is between companies. Ultimately, all businesses are hoping to acquire the most qualified talent. This can, in turn, lead to higher retention rates. This is because companies try to hold onto the talent they currently have with increasingly competitive benefits packages.

Business growth becomes more difficult as businesses that wish to expand struggle to find the talent to enable them to do this. Post-Brexit, this could be especially true of entry-level positions. A £30,000 minimum salary cap is potentially set to cause businesses to lose out on newly qualified EU talent. This lack of candidates could exacerbate the impact of Brexit. A salary cap would especially affect areas such as hospitality and healthcare, which typically have a high proportion of EU workers.

So, it seems further post-Brexit skills shortages are perhaps inevitable. However, there are ways to prepare and ensure that, while the market is experiencing teething problems post-Brexit, your company is in the best position possible to handle the disturbance.

Communicate with your employees

Make sure you know which of your employees will be most affected by Brexit so that you can support them. Then, communicate with those employees directly. As well as this, communicate with the whole company so that everyone is informed and aware. It may be that those people not directly affected still need to understand the procedures being put in place to enable them. Regardless, good communication is vital for a positive, transparent workforce and promotes a culture of internal respect which is essential in an unpredictable jobs market.

Ensure you are an attractive employer

Maintain a strong presence as an employer to ensure candidates are actively seeking you out. Upping your game in a competitive market is always a good idea, but with Brexit in mind, it is especially important. Research shows are more likely to apply to a company which manages its employer brand. Therefore, passive candidates will likely keep attractive employers in mind when perusing the job market. Promote the benefits of working for your company through your social media and website.

Support your EU employees with settlement scheme applications

In a no-deal scenario, the Government has already assured employers that any EU employees will be able to continue residing in the UK. However, preparation is vital. EU Nationals who lived and worked in the UK with free movement will need to register under the EU settlement scheme. The deadline for applications is dependent on whether the UK leaves the EU with or without a deal. Encourage your employees to apply as soon as possible and support them through the process.

Plan for no deal

If the UK is to leave the EU with no deal, free movement will end on the 31st January or thereafter, depending on an extension, with no transition period. While negotiations remain up in the air, it’s better to be safe rather than sorry. So, prepare for this by ensuring that any EU employees you intend to hire have a start date as soon as possible, and preferably before the 31st January. As well as this, encourage them to apply for settled status. In the case of a no deal Brexit, “workers will continue to be covered by the EU Withdrawal Act 2018”. This states that “direct EU legislation that is operative immediately before exit day will remain part of domestic law on and after that date.”

If Brexit has proven to be anything, it’s unpredictable. Current events have thrown up the alternative possibility that the UK could end up staying within the EU after all. The recent decline in EU talent directly correlates with the UK’s decision to leave the EU. So, it would be prudent to presume that any eventuality in which the UK remains within the EU would result in an eventual influx of EU talent back into the UK market.

Skills shortages look to be inevitable for the short-term, whether we leave or remain. Research shows that “the prevalence of hard-to-fill vacancies has continued on an upward trajectory.” But, with a committed recruiter on your side, and a strong employer brand, there is no reason why your company cannot be prepared. Where leaving the EU throws up other uncertainties in the pipeline, there is no ideal solution. However, strong internal communication and a strategic approach to last-minute changes can enable you to ensure your company continues to grow whether the UK leaves the EU with a deal, or not.

In Summary

  • The new key date is 31st January 2020, by which time the UK needs to tell the EU what it wants to do. This may mean another extension, but a no deal Brexit is a significant possibility.
  • Employment levels are at an all-time high, and vacancies have risen to the “highest level since comparable records began.”
  • Due to a decrease in workers from the EU, the market is candidate driven.
  • A salary cap of £30,000 may exacerbate this.
  • So, communicate with your employees.
  • Ensure you are an attractive employer.
  • Support your EU employees with settlement scheme applications.
  • Plan for a no deal Brexit.
  • There is a small possibility of remaining, which may result in an eventual influx of EU talent back into the UK market.
  • Whether we leave with a deal, no deal, or eventually remain, skills shortages look to be inevitable for the short-term.