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HR & Brexit : The Debate So Far


With over three months still to go, the debate over the effect of Brexit on HR and the jobs market is being strongly contested by each side. In this article, we look at some of the principal issues and arguments and explore how HR can prepare for the potential impact of Brexit.

The skills shortage

CV Library found that over 40% of UK recruiters are concerned about restricted access to qualified candidates as a direct result of Brexit. It is a view reiterated in a survey released just yesterday by recruitment agency Manpower which highlights that over 200,000 jobs created in the UK last year were filled by workers from the EU. Official figures were provided by the Office of National Statistics (ONS). Those skills, it is implied, could be lost if the ‘out’ campaign is successful.

An alternative view exists, however. A CIPD report suggested ‘there is little evidence of a skills shortage’ due to current record levels of net migration which have significantly boosted the supply of labour for employers. The level of excess labour is also seen as responsible in part for the current downward pressure on UK average wages (predicted to remain within the 1-2% bracket during 2016 and beyond).

Brexit would mean a wider choice of vacancies for job seekers but the potential for business growth may be limited due to a reduced skills supply if EU workers are no longer permitted to move freely to work in the UK. A smaller labour pool may also lead to higher pay levels. Average weekly earnings at present remain 9% below 2008 in real terms. This may be regarded as a benefit for employees but an additional cost at a time of uncertainty for employers.