Recruitment agency leaders warn of Brexit uncertainty risks

Brexit: Shutterstock

The Brexit impasse, which is showing no signs of being resolved, has led recruitment agency leaders to warn of the dangers of continuing uncertainty and to highlight the need for a speedy decision on the UK’s future relationship with the EU. 

David Taylor, managing director of international recruiter First Point Group, told Recruiter that following Theresa May’s decision to delay the vote in parliament on the EU withdrawal agreement, the current situation was “probably the worst it could be, with an impasse and no clear way forward”.

“Any decision is better than no decision,” said Taylor. “At the moment, we are dillydallying in the middle”, with no one having any idea what the outcome will be. “Uncertainty is never good for any market,” he added.

He said that although the deadlock over Brexit hadn’t yet “truly affected clients’ hiring, which is good news”, for the first time he was seeing clients “getting jittery”. Their main concern was the impact on the supply of consultants provided by First Point Group in the event of no deal, he said. However, the company was lucky in having a pan-European network of offices, he added, so even a no-deal outcome wouldn’t affect its ability to do business too much.

Tony Goodwin, group chief executive and chairman at Antal International, agreed that uncertainty was “the key and biggest worry”. “The whole Brexit issue creates it, and business doesn’t like uncertainty,” he said.

Goodwin said the lack of clarity about the future was beginning to have negative consequences for Antal’s business. “We have a few projects on hold, and a noticeable reduction in recruitment activity because of this uncertainty. Parliament needs to stop playing politics with the referendum and go with the deal that the Prime Minister has achieved, which means we will be closer to trading ties with Europe than any other non-EU state. This opinion is qualified by the assumption that we can still do separate deals with the WTO and the rest of the world – most noticeably China, India and US.”

Peter Searle, chief executive at global workforce solutions provider Airswift, told Recruiter that to avoid medium and long-term damage to the employment market, it was essential that a decision on the UK’s future relationship with EU be made sooner rather than later. While in the short term, the current impasse “will result in a reduction in permanent recruitment as people put their plans on hold” and could result in “a positive impact on temp demand to staff running projects”, a continuing stalemate would be damaging both to the temp and the permanent markets, he said. 

“Any no-decision scenario will have this effect over time, and it is essential that UK Plc can get a decision any of three ways to stimulate, to a greater or lesser degree, the employment market. Exit with no deal, exit with May’s deal (or one close to it), or stay in the EU. Without a decision, the medium- and long-term result will inevitably start to negatively affect the employment market,” said Searle.

Paul Flynn, an investor in the recruitment sector, among others, who sold his stake in Staffgroup to Cordant Group in 2015, told Recruiter that while “people were looking for certainty and some level of assurance that there would be a trade deal, the reality is that politicians can’t always provide this. It is business as usual, and you just have to get on with it.”

Flynn said that while companies “that hadn’t operated here before and for which the country was uncharted territory might be hesitant to invest here”, he wasn’t aware of any investors actually being put off the UK by the current situation. He said that as an investor himself, who took a long-term view, he certainly wasn’t deterred.

Employers urged to help channel Apprenticeship Levy funding

Employers have a key role to play in ensuring Apprenticeship Levy funding reaches the sectors and individuals who need it most.

4 February 2020

Three-quarters of employers struggle to find appropriate skills

Almost three-quarters of firms are struggling to find the right hire, according to the latest Quarterly Recruitment Outlook from the British Chambers of Commerce, in partnership with careers site Totaljobs.

4 February 2020

UK faces triple attack on worker employability, say agency leaders

The UK faces a three-pronged attack on the employability of workers in the first quarter of next year, despite a general election possibly breaking the deadlock in Parliament on Brexit.

30 October 2019

Employer confidence plummets amid Brexit uncertainty

Employer confidence in the UK economy has dropped to its joint-lowest level since mid-2016, according to the latest JobsOutlook report from the Recruitment & Employment Confederation (REC). 

30 October 2019