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Cutting Through the Uncertainty: Recruitment after Brexit

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Derek May, CEO of Brightwork, a leading recruitment agency, shares his views on the aftermath of the Prime Minister’s Brexit speech this month.

The Government has spoken, and the UK will be making a hard exit from the European Union. Behind the headlines British businesses are looking to make the best of the situation and to get back to some form of stability.

The media is awash with commentary, but let’s delve into what the future holds for businesses looking to recruit, and candidates looking for employment.

The economy on recruitment

The first thing to examine is the economic outlook and is our best guess.

The 2008 downturn did not immediately impact upon temporary recruitment. Those looking to weather the storm turned from permanent hires to temporary recruitment as a flexible workforce alternative. It probably took until 2010 for the temporary sector to be affected.

Our belts were tightened along with the rest of the country. Reacting to the downturn gave opportunities, however. We at Brightwork moved to electronic timesheets which saved us £40k per annum on stamps and paper alone notwithstanding staff and printing costs. Necessity is the mother of invention and innovation has brought British business through previous challenging times.

After Brexit, I can already see transformational specialists repositioning themselves from we are the permanent recruitment specialists to we are the temporary labour specialists as companies move to spread the risks of investing in human capital.

With the outlook for the economy uncertain, the Government will continue to use all the economic levers it has and some they will develop, in the hope of sustaining our economic resilience. There may be a migration from permanent to temporary over the coming period which will require the recruitment industry to be extremely responsive.

Migration on the economy

Controlling the numbers coming into the UK is now a clear policy aim and we need to look at how migration changes will potentially affect the supply of labour.

With the prospect of no longer being to rely on a steady influx of enthusiastic EU nationals, employers who count on DIY recruitment may increasingly find unfilled vacancies, and might call on recruitment specialists.  That, potentially, is good news for responsive and flexible recruitment companies.

Migration on recruitment

Reduced migration will put pressure on the UK population ‘available’ to work. We have around 1.8m people unemployed so the pool of ‘available’ labour would appear large enough.

Net migration from the EU to the UK was estimated to be around 185,000 EU nationals in 2015. 73% of those either had a job waiting or were coming to look for a job which equates to around 135,000 filling UK jobs. A full stop on European migration will remove 135,000 from the workforce per annum, and we still have a pool of 1.8m unemployed.

Negotiations with the EU are certain to be complicated, and a spirit of compromise is expected by most. My money is on a measured reduction in migration, and a new UK focus on reaching the hard-to -help unemployed.

A significant investment in time, effort and money is required to get those groups back into productive employment. Regardless of rhetoric, there are complex reasons behind long-term unemployment and the imagined potential of an underutilised 1.8 million workforce does not tell the whole story.

What will all of this mean for the recruitment industry?  We feel that this will help those in the industry who are willing and able to evolve to meet the challenges, but it will be a struggle for the more traditional recruiters.

In conclusion, the opportunities may be one of the biggest we have seen in years.