The troublesome job of replacing EU workers
With Brexit talks now firmly under way – and the new Government finally in place with a working majority – you could be forgiven for thinking a period of calm might at last settle over the British economy.
But I’m afraid there is precious little chance of that.
That’s because the big issue of what will replace the free movement of migrants from the EU has still to be resolved – and that leaves a giant challenge facing many businesses across the region.
Take a look at the immigration figures and it’s clear to see that some companies have relied on EU labour to plug both physical and skills shortages for a number of years. It has helped keep costs down, imported badly-needed skills and has even reduced the need for training and development in some cases.
But after the vote to leave and a commitment to end freedom of movement, the UK is now looking at what a new immigration system will look like.
Figures from the Office for National Statistics (ONS) show that in the third quarter of 2016, net migration – the difference between people arriving into the UK and those leaving – dropped below 300,000 for the first time in three years.
Added to that, the number of EU migrants coming to the UK to work fell for the first time in a decade in 2016.
Most of Eastern Europe (Bulgaria and Romania aside) supplied fewer workers to the UK year on year, and there are further signs of decreases in the number of new national insurance numbers being registered to Europeans.
Potentially, that is bad news for productivity.
EU workers made up around 7 per cent of the UK workforce at the end of 2016, compared with just over 3 per cent in the same quarter in 2006, and in certain sectors, such as technology and hospitality, the proportion is much higher.
The Queen’s Speech clearly recognised the challenges facing the new government on Brexit - but fell short of concrete proposals to address the UK’s productivity deficit and how this labour shortage might be overcome.
For business leaders, there is a clear need to assess how they are training and recruiting workers. There is no doubt that the easy supply of migrant labour has made some organisations relax about the levels to which they invest in their own talent.
Faced with potential limits on migration, it’s now more important than ever that employers do their utmost to source talent from as wide a pool as possible.
That is a challenge all of us need to rise to as quickly as humanly possible. Let HR Solutions Shropshire help grow your own talent.