The impact of Brexit on the Recruitment Industry [Blog]
July 26, 2018 - 9:59 am
Employers in the UK are becoming increasingly concerned with the lack of clarity surrounding their temporary workforce. How will the immigration system guarantee a sufficient supply of workers, enough to meet our increasing labour demand? In this article we will be looking at statistics surrounding our current UK workforce and how Brexit could complicate matters.
Within the Recruitment Industry the majority of positions are Temporary. Filling them with British nationals has become a thing of the past and the presence of labour from across the channel has become more prevelent. In fact the statistics* are quite alarming as to how much we as a nation rely on foreign labour.
Six in ten respondents (60 per cent) who supplied agency workers in the warehousing sector indicate that 50 per cent or more of their temporary assignments were filled by EU workers, with almost three in ten revealing that 75 per cent or more of their temporary assignments were filled by EU nationals.
Over half of respondents supplying the food and drinks sector (56 per cent) and the hospitality sector (52 per cent) reveal that 50 per cent or more of their temporary assignments were filled by workers from the EU.
Two in five (39 per cent) respondents in the food and drinks sector supplied EU workers to fill 75 per cent or more of their temporary assignments.
A third of respondents (33 per cent) supplying agency workers in the hospitality sector had EU workers filling 75 per cent or more of their temporary assignments in the last 12 months.
The fact that out of the 4 industries surveyed, all registered that more than 50% of the labour they provide is from foreign nationals is an astounding figure. When we do leave the EU – these industries are likely to see a vast decrease in productivity as it’s highly unlikely that British nationals are going to work in the environments and conditions that our foreign workforce do currently. This in turn could potentially damage the UK economy particularly focusing on Industrial markets such as Warehousing, Food Production and Factories. That’s not all, for positions that are seasonal the statistics are just as alarming :
Of those employers that hired seasonal or temporary staff:
Four in five (81 per cent) claim to have used EU labour in a temporary or seasonal role.
Three in five (62 per cent) claim 10 per cent or more of their contingent workforce was from the EU.
One in ten (10 per cent) revealed that half or more of their seasonal and temporary labour was from the EU.
After reviewing some of these statistics, on average of the proportion of the companies questioned 61% of the labour they provide to industry is from the EU.
The above graphs indicate the amount of turnover (in millions) that both Temporary and Permanent contracts generate. As you can clearly see, Temporary contracts heavily outweigh Permanent, generating over 7 times as much revenue. Earlier in this article I referred to some statistics that indicate that the majority of Temporary positions within the Recruitment Industry are predominantly filled with labour from within the EU. With the UK on the brink of leaving the EU perhaps we’re likely to see some serious consequences for employers.
As previously mentioned in the above segment, we could see a dramatic decrease in not only productivity to sectors that rely heavily on temporary labour but profit to these sectors too. Obviously there are more reasons to stay in the EU than just the need of temporary labour and there’s plenty of reasons why we should leave but perhaps a further analysis of both reasons to stay and leave is required before we make the decision to leave for good.
We must now prepare for a exit from the EU and a decrease in the available labour pool – further funding should go into Apprenticeships and other training programs to increases the skills we have available in the labour force. This then in turn would allow us (when we leave) to pump people into the sectors that have suffered the most decline and potentially stabilise the UK economy until a more sustainable solution is formulated.
Source : https://www.rec.uk.com/__data/assets/pdf_file/0005/451994/Short-term-labour,-long-term-growth.pdf
*Quantitative research findings are based on a survey of REC members produced by YouGov as well as a survey of employers/HR decision-makers in the UK, produced by ComRes.