Brexit: Workforce Planning for the Future
The UK’s decision to leave the EU will have major implications in the long term for many employers, particularly those in sectors which currently employ large numbers of EU nationals such as hospitality, healthcare, food production, retail and construction.
The UK Government has stated its intention to end free movement and restrict migration by focusing on attracting “the brightest and best” EU nationals to the UK.
Some employers who have never previously had to worry about the availability of labour will have to think about workforce planning for the first time.
What is the new immigration system going to look like?
Based on comments made by Theresa May, the Home Secretary and the Migration Advisory Committee (whose recommendations are frequently adopted by the UK Government), we have a strong indication of what the post-Brexit immigration system might look like.
It appears that after the transitional period, no preference is going to be given to EU nationals who want to come to the UK to work, meaning that they will be subject to the same restrictions currently imposed on non-EU nationals at present.
This means that the eligibility of EU nationals to work in the UK will be largely dictated by a point scoring exercise based on salary and skill level. If this is the case then EU nationals will need to be undertaking what the UK government perceives to be either a ‘highly skilled’ role or a ‘medium skilled’ role.
The crux of the issue is that the new immigration system is unlikely to provide a route for EU nationals undertaking low skilled or lower paid roles to come to the UK to work.
So the key points for employers to consider are whether they currently employ migrant workers in “lower skilled” roles and to what extent they can be filled potentially by alternative means. For those roles which are suitably skilled for working visas, employers need to look at whether they would typically pay those workers £30,000 or above. If employers aren’t meeting those respective thresholds then they may face challenges in filling those roles after the transitional period ends in December 2020.
How can employers overcome these challenges in sourcing labour?
Employers should look to understand their current workforce by gathering data on nationality to assess the size of their EU national population. Employers can then assess the extent to which their business is reliant on EU workers and if there are any high risk roles largely filled by EU migrants which may be difficult to fill post-transitional period.
It is also important to plan for the cut-off dates of the transitional period and the changing compliance and right to work check requirements that may arise as a result of this.
During times of great uncertainty we recommend that employers focus on supporting their staff by looking at alternative options for EU nationals to regularise their stay by exploring non-skill or salary level based immigration routes. The Government has already said that it wants to extend the Youth Mobility Scheme (YMS) in its July 2018 Whitepaper to EU countries—a scheme which currently allows citizens of certain countries who are aged 18 - 30 to come to the UK for up to two years with full access to the labour market. This could fill some of the gap left by shortages of lower skilled workers but would only be temporary.
Employers should take the lead in communicating with their EU national population, holding training sessions, townhalls and providing assurances where possible.
Lastly, many have been waiting for more concrete details relating to Brexit to be announced. However, we recommend contingency planning now and in early 2019 to fill any potential skills shortages in the workforce post-transitional period. This can be done through a combination of means by, for example, outsourcing, offshoring labour, up-skilling the resident labour market through investing in training and higher education programmes or improving retention rates in general.
The UK Government will most likely set out their plans in their immigration white paper which is due shortly. In the interim we encourage employers to evaluate their current business models and recruiting practices and gather data on their existing workforce to plan for the inevitable changes ahead.