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Brexit & the Recruitment Industry

Posted on June 20, 2016

What would Brexit mean for the recruitment industry?

You may have noticed. There’s the small matter of the EU Referendum coming up - billed as the most important vote for a generation. What would a Brexit mean for the recruitment industry? Well, the keyword is uncertainty. Here’s a quick breakdown of the possible impacts, both positive and negative.

More questions than answers...

No country has ever left the EU. There is no precedent for untethering, unleashing, undocking. That means that it’s extremely hard to predict what might happen following a Leave vote. Much will depend on the terms that are negotiated between the UK and the EU as well as with other nations. The one sure thing is that the UK is required to serve two years of notice of its desire to leave. Very little - if anything - will change overnight. 

Skills shortages and availability of labour

The UK relies heavily on the immigration of EU citizens to make up the workforce. Over two million EU citizens live and work in the UK. And more than a fifth of British startups are led by foreign entrepreneurs. EU citizens help to plug skills shortages - especially in areas such as IT, construction and engineering - and provide much of the lower-paid skilled work in the UK. Currently the free movement of EU citizens is enshrined in European law. But a Brexit may mean restrictions on immigration - widening skills shortages and forcing the upskilling and retraining of the domestic workforce.

Is that a good thing or a bad thing? It’s up to you to decide.

Higher wages

Smaller candidate pools means more competition for the top talent. The best candidates will demand higher wages, which could filter down to lower-paid roles as businesses seek to retain staff and attract the best of British.

More red tape?

Make no mistake. There will still be lots of immigration to the UK following Brexit. Just as well too. Because - to repeat - the prosperity of the UK economy depends on foreign labour. Yet, depending on the immigration terms and visa demands drawn up by the UK, recruiting foreign labour may become a long and drawn out process that companies will need guidance on.

Employment legislation

The EU’s influence on UK law is significant. In theory a Brexit would give the UK freedom to make its own rules, which could affect employment law. Much maligned legislation such as the Agency Workers Directive and the Acquired Rights Directive could well be repealed. Yet while the perception is that red tape from the EU hampers business growth in the UK, the reality is somewhat different. Lots of our employment legislation has its roots in Downing Street - and many rules go beyond what is required by the EU. In a nutshell: employment legislation is unlikely to change much in the event of Brexit.

Navigating emerging markets

One of the most exciting and persuasive arguments in favour of leaving the EU is the opportunity to forge new trade links with emerging economies: China, India, Brazil and so on. As those trade agreements are made (and it may be a lengthy, decade-long process), businesses may look to recruitment experts to help them navigate the global market: advising on the best opportunities for growth and development.

Leaving the EU might create uncertainty, but that doesn’t mean a lack of opportunity.

This is hopefully a balanced perspective of the recruitment industries viewpoint rather than the personal view of Cathedral Appointments. What are your thoughts? Tweet us at @Cathapps to let us know how you’re planning on voting.


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