May 12, 2016

How will Brexit impact skills availability?

What’s one of the biggest concerns facing UK employers at the moment? Skills. What might be affected if the UK votes to leave the EU on June 23? Skills. As we discussed in our last Brext post, the one on immigration, there are unprecedentedly large numbers of EU workers in the UK today. UK employers are making the most of these EU workers to plug skills shortages and overcome recruitment difficulties. A lot of employers, according to CIPD research, are very happy with this precious resource pool and fear for the repercussions on skills availability and productivity if the UK population votes for Brexit in June.

What will happen if that resource is taken away or significantly reduced? Firstly, we don’t actually know yet what status EU migrant workers will be accorded if it’s a Brexit outcome. So HR and business leaders needn’t panic, just yet. It may be that the UK continues to allow free movement of EU workers. However, it is worthwhile thinking about what the repercussions might be if that resource pool is diminished.

It is particularly important that HR professionals working in sectors that rely heavily on migrant workers think about the potential repercussions of Brexit on skills availability. The healthcare sector, for example, uses a lot of overseas workers – 11% of all NHS staff and 26% of doctors are not British, according to statistics released by the Health and Social Care Information Centre in 2014. Migration Watch UK said the health and social care sector combined employ one in seven of all immigrants in the UK, making it the biggest employer of migrants.

However, there are several other sectors that also rely heavily on migrant workers and could be hit hard by changes to migrant labour status post Brexit. These sectors – construction, retail and agriculture – have enjoyed ready access to migrant workers to fill unskilled, low-paid roles that are otherwise hard to fill.

How big is the UK skills shortage? Massive, according to research by the UK Commission for Employment and Skills (UKCES). It’s 2015 Employer Skills Survey found that nearly a quarter of all job vacancies remained vacant because employers are unable to find candidates with the right skills or knowledge. That was a rise of 130% since 2011.

The shortage can partly be explained by the UK’s partial economic recovery between 2011 and 2015 as businesses have upped recruitment to meet business needs. However, the problem is partly because of the lack of resource in the first place.

Further research from UKCES found that the UK is simply not producing enough young people with the skills required by UK employers. Not only that, but the skills they do possess fall well short of the levels of those offered by international competitors.

Indeed, the situation is perceived to be so dire that the government said in a report called ‘Fixing the foundations: Creating a more prosperous nation’, that the UK’s national skills weaknesses are “of such long standing and such intractability that only the most radical actions can redress them”.

If the UK does end up restricting the availability of EU migrant workers, then it’s going to need to work very hard at boosting homegrown talent to meet the skills required by UK businesses.

Next week’s Brexit post looks at the potential impact on the UK economy