We are going to face a massive employment crisis after Brexit

Unless the Government can negotiate an immigration policy better than what already exists, the vulnerability of British businesses losing key employees will grow

Andrew Macleod,Liz Roberts
Thursday 13 July 2017 10:27 BST
Big businesses are preparing for Brexit, but SMEs are struggling to keep up
Big businesses are preparing for Brexit, but SMEs are struggling to keep up (PA)

Did you know, that up to 47 per cent of high-skilled EU citizens employed in the UK are considering leaving the UK within the next five years?

Whether it is the lower pound, or the unwelcoming feel post-Brexit, matters not. The threat to the job market matters more than you may think.

Some people may be tempted to think “this is good as it means British jobs can go to British people”. However, Britain does not have an unemployment problem. What we do have is the “post war baby boom” becoming the “post war retirement boom”. Many workers are leaving the job market and reducing the tax revenue to government just when they are increasing the burden on the NHS through growing old.

Britain needs to expand the tax base through more workers to cover the ageing and retiring workers to ensure that we have enough taxes to pay for the NHS – particularly as we now know the Brexit promise of £350m per week extra to the NHS was fiction.

But with so many thinking of leaving, instead of our workforce growing, Brexit might see our workforce shrink. A shrinking workforce is not just a risk to the economy, it is also a risk to businesses.

The UK is already seeing a skill shortage in engineering, IT, care work, seasonal agriculture and accountancy. Some UK firms have already reported difficulty with recruiting new staff and the retention of old staff. And unless the government can negotiate an immigration policy better than what already exists, the vulnerability of British businesses losing key employees will grow.

British business needs to be equally as worried about low skilled workers. The report, published by Deloitte, points out that 38 per cent of lower skilled EU nationals are looking at their options as well.

Where does that leave businesses like independent retailers, whose success relies on lower skilled employees? Or crucial public services such as care homes, hospitals and restaurants; many of which work with skeleton staff structures in the first place?

Zoe Hannam of Retail Renaissance UK, warns that “should the desire of the 38 per cent become reality, our high streets will not look the same. Already thousands of independent retailers are closing…Brexit will simply exacerbate the problem and independent retailers need to act now to survive the uncertainty…

She continues by recommending that retailers “start with a staff audit, open up conversations with employees to gain an understanding of their views and concerns with regard to Brexit.”

Michel Barnier encourages the UK to make haste in the Brexit negotiations

Enterprises thinking that they can continue business as usual are in for a shock. Businesses may find it harder to get employees, will have to pay more for the employees, inflation will go up and the economy will be put under further strain.

Companies of all sizes must be prepared for Brexit and some recognise this. Some firms are beginning with the appointment of in house “Brexit teams” or a dedicated “Brexit person”. But what about smaller firms who do not have the resources or even know where to begin? Burying heads in the sand and pretending it is business as usual may be the common response, but it is not a safe option.

Even if a business has its employment issues sorted, what of their key suppliers or customers? What if a key supplier or customer goes out of business because they had employee problems?

Contingency planning will come in all shapes and sizes. Brexit will affect all businesses, not just those trading in the EU and recruiting EU nationals.

As a contingency, perhaps businesses should consider including a Brexit clause into their contracts between suppliers and/or clients to prevent the breakdown of relationship in the future.

While having internal Brexit dedicated staff is not an option for most SMEs, outsourcing a team of experts may well be. UK business should be doing an assessment of the likely impact of Brexit on existing and new contracts, relationships and regulatory permissions, at the very least.

The Deloitte survey has highlighted the desperate need for companies to analyse and plan for a change and particularly the recruitment shortage that is threatened. We all know the saying, fail to prepare, prepare to fail…

Don’t be the one who is underprepared.

Liz Roberts is an advisor at BrexitAdvisoryServices.co.uk and Andrew MacLeod is a visiting professor to Kings College London, Chairman of Griffin Law, a non-executive director to Australian and US companies, a former high level UN official co-founder of BrexitAdvisoryServices.co.uk

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