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Recruitment Buzz Panel: If the UK pulled out of the EU, how would the UK recruitment industry be affected?

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Here at Recruitment Buzz, we frequently run a panel debate that brings together some of the leading figures of the recruitment industry. The aim is to discuss major innovations, the future of the industry and the things that really matter to recruiters.

With the upturn of the economy and talks of a separation from the EU, we asked our panel; ‘If the UK pulled out of the EU, how would the UK recruitment industry be affected?’

We’ve got some great responses from our panellists, so have a read and find out what these recruitment influencers think about the future of the recruitment industry…

Lisa Scales | Co-Founder | Tribepad

I think the UK recruitment market could see an initial boom if we pulled out of the EU given the fact that a lot of small to medium sized companies will be freed from EU constraints and therefore able to recruit given the reduction in cost base of employees. The follow on effect of this is that Recruitment Agencies would see an increase in usage in both temporary and permanent markets. I expect that the temporary market would see an initial boost enabling a business to “ramp up” quicker with a temporary workforce and a business can be tentative with this approach and then the permanent market would follow on. There is however a flip side hence my “initial” boom because the longer term effect could see a lot of global businesses moving to continental Europe for lower cost base and I think there would be a damaging effect on the foreign owned car industry which supports thousands of employees a year.

 

Liz Longman | Managing Director | TEAM

The simple answer to this extremely complex question is … massively. To highlight a few main areas of employment law that would/could be swept away would be; the Working Time Directive, Equal Treatment Directive, Agency Workers Directive, Collective Redundancies Directive, Acquired Rights Directive (TUPE) and the European Convention on Human Rights. In some cases this may at first glance seem beneficial until you start to wonder what they may be replaced by! However good business requires good legislation and as all recruiters know, some of the recently introduced employment legislation has left a lot to be desired, particularly in the guidance provided and resultant interpretation. As recent fiscal events have demonstrated, what may work for Germany doesn’t necessarily work for Greece. If the UK had the ability to determine its own policies and remove what’s wrong with current red tape and bureaucracy then we believe that more employers would have the confidence to employ more workers.

 

Neil Harrison | Head of Employer Branding & Insight | TMP Worldwide

It would be hard to imagine how the UK recruitment industry would not be affected and affected negatively by a potential Brixit. Firstly, from an economic perspective, influential trading partners such as the US and Japan have invested massively in the UK – and continue to do so – as they see the UK as a stepping stone towards 500m potential customers. Would they be so keen to do, if barriers (either real or perceived) were put up? This investment creates jobs and helps fuel the recruitment industry here. And as the EU quietly drags itself back into the black – the second quarter showed growth, albeit anaemic growth – would this be the right moment to flounce off.

From a candidate perspective, would great international talent be so keen to work in the UK if they felt the country (and its career opportunities) were becoming marginalised? Talent shortages are only going to become worse if both domestic talent and overseas candidates see the UK market as being marginalised. Weaker candidate’s pools are unlikely to be in the interests of the UK recruitment industry.

 

Dave Amos | Director | Procurement Media

I believe that since virtually all political will is bent on securing a Yes vote and that most business people would still identify being a preferred trading partner of The EU as essential, whatever the result of a referendum practical change is actually highly unlikely. 

All memberships’ organisations when viewed from the perspective of individual members have some elements which suit them and some which don’t. Why on earth would the remaining EU members allow any non-member country to just take the bits which they like and opt out of those which don’t because it would set an unacceptable precedent and change the structure of the organisation? Opting out and wanting in would like being a soldier because you like the outdoor life and khaki suits you but not accepting getting shot at is part of it.

 

Joe Slavin | Managing Director | Recruitment at Johnston Press

As someone who has moved from the United States to work here I would be disappointed to see the UK pull out of the EU. I have benefitted from the free flow of labour and I know many colleagues who have emigrated from the UK to the US, Europe and beyond. Every single one of us would say it’s been an incredibly enriching experience personally and professionally. More importantly, all employers benefit from the diversity of ideas that ‘outsiders’ bring – just ask Apple Computer or a Hollywood studio.

To answer your question directly though, the pull out of the EU would mean a short term wage hike as a spike in demand increases the value of the smaller labour pool. The recruitment industry would naturally benefit because of this scarcity in the short term but long term we would be less competitive as a nation which means a weaker labour market.

 

Steve McNally | Director of Communications | Equality Law

Hugely. Partly. Perhaps not at all. Depending on which sectors, functions and levels of recruitment you care to talk about. A large firm in the Square Mile, buoyed by the City’s continued pre-eminence, would still attract top talent from France, Germany and elsewhere. And some technology company on the Cambridge Science Park could become slightly less of a magnet for continental minds, but would look further afield. But a food services company in Norfolk might well see some negative effect on candidate numbers applying for the production line.

So nothing really tangible to worry about. And yet …..

Short-term, very little structural problem. Longer term, choosing to ‘stand-alone’ would deter inward investment (Nissan have already made that clear and we need more not less examples of their phenomenally successful plant on Wearside), adding more uncertainty to what is already an uncertain world. It would send out a message that we wish to be excluded, when the sensible choice in the current climate would be to remain ‘included’. Whatever the politics, the economic fallout and impact on recruitment would eventually become a negative – and a potentially painful one at that.

 

Ian Knowlson | Managing Director | Selling Success

Having worked for Hays across Europe I must declare I’m not a ‘Little Englander’ so I believe it would be catastrophic for both the UK economy and the recruitment sector as a whole. The UK employment market is the most liberal and mature market in the EU. This currently gives our agencies huge business and growth opportunities across the EU.

Firstly there are large numbers of multi-nationals who use UK contractor’s workers in numerous sectors including IT, Telecoms, Oil & Gas and Engineering right across the EU. It would massively reduce the placement by UK agencies of UK workers in temporary and contract roles across Europe.

Secondly it would radically reduce the number of candidates available to our agencies to supply in the UK and elsewhere across the EU. There is undeniably a shortage of skills in many countries and sectors and this would only inhibit agencies ability to supply. Accepted they may be on a UK Tier 2 list but operating every time this would create unnecessary obstacles and slow employer’s recruitment.

Finally in the medium term I expect there to me a migration of Global businesses out of the UK to other parts of the EU with an overall reduction in employers and therefore business. We already live in a world without boundaries so why create them unnecessarily for our businesses and reduce their global competitiveness.

 

Daniel Richard | UK Managing Director | Sonru

As a French Canadian I shouldn’t be commenting on UK politics, but I wouldn’t see the UK’s decision impacting the current growth of the UK economy and the current recruitment trend.  From my discussions with various senior leaders in different industries, European companies are investing more and more in the UK.

 

David Thornhill | Managing Director | Simplicity

Leaving would take the brakes off the recruitment industry and allow growth. Simple!  WTD (Working Time Directive), essentially demanding paid holiday entitlement had a snowball effect which has escalated costs of temporary hires, with the perverse result of higher costs and consequently lower use of temporary workers. If that directive was removed then the uptake would be greater. An admittedly extreme example is that due to the WTD junior doctors have capped working time, the NHS has less staff treating more people with the result that waiting lists get longer and patients go untreated. Red tape can be seriously bad for your health.

“Then came the Agency Workers Directive (AWD) intended to protect lower paid workers – matching temps with perm worker rights after three months.  This has suppressed the temp market. The sad consequence is that temps tend to be in umbrella companies, and invariably get paid less than if they were working through recruitment agencies. That is a big own goal for EU legislators.

 

Dale Williams | Co-Founder & Director | Yolk Recruitment

We have seen a growth in our company and the recruitment industry over the past couple of years. As with most changes there would be both positive and negative factors. If the UK was to leave the EU, we could see opportunities of businesses that perhaps might have been limited to trading regulations in the past, creating lots of new job openings and boosting the recruitment industry.

In comparison, the pull out could result in a significant job loss in the UK; should global companies decide to pull out and move to lower-cost EU countries. A British exit could mean tighter immigration controls on those coming to work in Britain from other European countries, which could potentially result in entrepreneurs starting businesses elsewhere. This would be specifically impacting on the IT industry, who are already benefiting heavily from the free movement of people within the EU, and would most certainly have a negative impact on the recruitment industry from a IT perspective.

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Chris is a digital marketing and publishing whizz by trade, having worked alongside the Automotive, Information Security and Software Asset Management sectors.

Specialising in data analysis and social media, he combines an analytical approach with a creative flair to achieve the best results. With a keen interest in Technology and Politics, Chris is constantly on the look-out for the latest stories around change and innovation.

As a lover of all things innovative, he has developed a keen eye for spotting the latest trends and hot topics. He sources and reads the latest news and thought-leadership articles from the world of recruitment before sharing them with the social media population.

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