The Intelligence: Candidate and skills shortages

Confusion around the UK’s future relationship and labour arrangements with the European Union (EU) shows no sign of abating.

Brexit negotiations began on 19 June 2017, yet confusion around the country’s future relationship and labour arrangements with the European Union (EU) shows no sign of abating. As demand for skills and people is mounting, migration statistics published by the ONS in February 2018 are particularly worrisome for businesses across the country. The figures show a fall in net EU migration, which is driven by a fall in EU citizens coming to the UK for work. At the same time, the number of EU citizens leaving the country has risen.

Candidate availability has been a pressing challenge for UK businesses, as manifested in our ‘Report on Jobs’ monthly survey of 400 recruiters. Recruitment consultants have been reporting continued difficulties regarding the availability of suitable staff for both permanent and temporary roles. In particular, as highlighted in the March issue, the rate of deterioration in the availability of permanent staff remained sharp in February, despite easing to the weakest for 11 months. Similarly, lower temporary and contract staff availability was recorded in each of the five monitored UK regions, with the fastest reduction signalled in the Midlands.

Persistent skills shortages have also been highlighted in our JobsOutlook monthly survey of employers, especially in sectors such as engineering, health and social care, education and hospitality. Amid ongoing uncertainty around labour provisions once the UK officially leaves the EU on 19 March 2019, more UK employers continue to feel that economic conditions in the country are deteriorating rather than improving.

Even though political debate has primarily focused on the availability of permanent staff in post-Brexit Britain, there is increasing concern amongst UK employers and recruiters on the impact of Brexit on the supply of temporary staff. Currently, temporary workers from the EU are contributing to the UK economy in key sectors such as hospitality, retail, health and social care, and the food and drinks industry. Businesses in these industries rely heavily on EU nationals to meet their labour needs.

As the number of EU citizens coming to the UK for work falls steadily while the UK’s unemployment rate remains one of the lowest since the 1970s, candidate shortages intensify. The REC recognises the need for, and strongly supports the implementation of, a practical and responsive immigration system, which will replace current labour provisions once exit talks are completed. The post-Brexit immigration system will only be effective if it allows businesses and industries to meet their labour needs through the sufficient supply of EU workers for both permanent and temporary roles.

To read more about the latest recruitment and employment trends, subscribe to receive ‘Report on Jobs’ and JobsOutlook, the REC’s most up-to-date sources of monthly UK labour market data and analysis. 

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