Brexit Confirmed – Recruitment Industry respond


Brexit Confirmed

UK & Europe

As the country votes to leave the EU, the recruitment industry is already responding with questions and speculation on what lies ahead.

Jonathan Beech, managing director of immigration law firm Migrate UK suggests thousands of existing EU workers may be deported: “The  referendum decision for the UK to leave the EU will see the introduction of costly policies for organisations that employ EU workers,” he says. “Furthermore, thousands of EU migrants, currently in UK company roles, will potentially having to exit in the future if they fail to  qualify under the current Points Based System that we use for workers outside the EU.

“All our clients already face big challenges and costs when hiring non-EU workers under UK immigration laws, which makes it hard to find the skills they need,” he adds. “The UK Government needs to urgently and comprehensively revise the current Points Based System to offer different criteria to employing EU nationals compared to non-EUs, if we’re to retain the talent we need.”

Mark Quinn, Partner in Mercer’s Talent business commented: “The immediate implications for companies and employees will depend on their circumstances. In the short term, companies should be analysing exposure they have to the UK and Europe in respect of their workforce’s organisational profiles and their reward plans. While we don’t know yet what restrictions will be imposed on, say, the free movement of people, it is evident that political, economic, legislative and market uncertainty is unlikely to clear any time soon. Strong employee communications will be critical for companies over the coming months.”

Addressing the impact on the SME sector, James Peck UK country manager of Jobandtalent said: “We can expect a mixture of fear and confusion among many SMEs following the vote for Brexit – particularly with regard to their employees. The reality is, there are some segments of the UK economy where staff from parts of Europe are critical for the operations of those industries. Brexit adds a huge degree of uncertainty to those industries and of course the SMEs, business owners, entrepreneurs and managers who are the actual day-to-day lives and livelihoods behind the statistics.

“Moreover, almost every decision small business owners have to make relating to their staff is connected to legislation that was introduced by the EU,” he adds. “Some 40 per cent of UK SMEs are concerned about how the vote will now affect their company’s ability to hire. Meanwhile more than 1 in 10 admit to being confused about the issue. With many SMEs operating without dedicated HR staff, small business owners often struggle under normal circumstances to keep up with frequently changing employee regulation – so this period of uncertainty and potential regulation change could hit them hard. As we wait to see how employee regulation will inevitably evolve, companies should consider seeking advice on employment law and hiring best practice to avoid getting into hot water.”

Finally, for now, Jules Quinn, a partner at King & Spalding, remarks: “Companies should be undertaking an employment audit of current staffing in the UK and the EU to plan for the new systems and reduce potential risks. Companies should be assessing employees will potentially be required to apply for a work permit if there is a repeal of the current EU immigration rules.

“Businesses need to review their existing contracts to see what EU derived rights have been woven into them, such as holiday pay and working time in existing employment agreements and TUPE provisions in property management agreements. There are questions over what post termination restrictions and references to geographical limitation there will be as well as currency, market volatility and where to locate businesses.”

Responding to today’s announcement that the UK has voted to leave the European Union, Recruitment & Employment Confederation Chief Executive Kevin Green says:

“The vote to leave the EU is likely to usher in a challenging period for British business and for the UK labour market in particular. Our data has shown a slowdown in hiring as we approached the Referendum. We expect to see this period of uncertainty continue.

“Nothing will change overnight. The Prime Minister’s statement this morning made clear that the Treasury is well prepared to support the markets and banks to ensure that business has liquidity. There will be a prolonged period of renegotiation and readjustment. During this time government needs to do everything possible to help businesses to grow and create jobs.

“That involves outlining a timetable of renegotiation to help organisations make informed strategic decisions. We call on policy-makers to set out the plan for implementing changes to employment regulations such as the Agency Workers Directive and the Working Time Directive.

“We need to ensure that British businesses continue to be able to get the people they need to fill the jobs available. Access to talent is absolutely vital to sustainable economic growth and prosperity. In sectors such as healthcare, education, hospitality, construction and manufacturing, workers from the EU are vital and any change to our immigration system needs to recognise that.

“We hope that today’s Referendum result leads to a step-change in the way we prepare current and future jobseekers in the UK, so that new entrants to the jobs market are better equipped with the skills and attitude that employers need. Employers, educators and government must seize the initiative and create a pipeline of talent so that individuals and businesses continue to thrive in the post-EU era. Over the coming weeks we will be consulting our members so that the recruitment industry is ready to play its part.”

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