Prime Minister Boris Johnson has long outlined his ambition to create a more prosperous, fairer Britain and his commitment to this end. His opposition, the Labour leader Jeremy Corbyn, is also emphatic about the necessity to see through a Brexit that’s ‘jobs first’. Yet as is so typical of UK contemporary political debate, we’re still none the wiser about how either of them will reach their respective goals.
Indeed, no-one can be sure what the impact of Brexit will be on jobs across the different areas of the UK. Regional variations are based on a location’s inherent characteristics, like its socio-economic make up, environmental attributes, geography and industrial structure. The impact of Brexit will also depend on the goods and services an area produces (and the demand for them) as well as the amount of capital invested.
HR departments should keep their fingers on the Brexit pulse
A company’s HR department should be the first place employees head to with queries and concerns, so it’s important that HR staff can answer Brexit-related questions as thoroughly as possible. It’s well worth having an understanding of exactly what might happen going forward - even if the government itself is not always totally clear on the facts.
But where is a good place to start looking for such information, especially when the government isn’t particularly forthcoming? The FTSE 100 live is an important way of finding out just how companies are faring and how news and updates about Brexit have affected their value. The robustness of a FTSE 100 company can offer a good indication of how smaller organisations may be handling Brexit repercussions as well as larger ones who are perhaps better equipped to weather the Brexit storm. Smaller companies can also provide a more accurate picture of how people are being affected by economic conditions. If people aren’t spending, the effects are felt from the ground up.
Staff could well be worried about their jobs as well as the company as a whole. This is why it’s so vital that HR teams get hold of as much Brexit-related information as possible to hopefully give peace of mind to employees.
So what might Brexit mean for employment?
Again, much is still unclear. Alongside FTSE live, the Institute of Employment Studies is another resource which can help understand the potential impact of Brexit. It tells us that around 2.15 million EU nationals currently work in the UK – that’s approximately 7% of the workforce. Brexit could ‘scare off’ many EU nations in future, leaving many lower skilled jobs in particular unfilled. It could also be the case that EU nationals feel less secure in their job roles, and will rely on their employers to keep them well informed.
A number of companies are likely to move operations abroad in order to stay in the single market - in fact, the economy has already seen £1 trillion of capital from the financial sector move out of London for this very reason. There may well be an effect on pay either way: an increase in immigration numbers to fill the low-skilled jobs will likely mean pay being reduced. However, if the low-skilled jobs do need workers then pay may be increased to incentivise British nationals to apply. There is also some suggestion that the removal of EU regulations and directives regarding employment could also have an effect, thanks to overtime and the EU-backed written statement of employment. This could all add up to employees working longer hours, or feeling that their employment is more precarious.
Whatever happens, the UK jobs market is facing challenging times. Perhaps unsurprisingly there has been a reduced appetite to recruit as companies worry about Brexit uncertainty and how it will hit their pockets. In some cases there have even been redundancies.
As we move into 2020, investment in job creation is very likely to remain subdued, and we don’t expect any let up in jobs market challenges. Having said that, it is still early days and we’ve yet to see whether the jobs market has in fact hit near enough rock bottom (and what goes down must, at some point, come up again) or if there is worse to come. Whatever the case, there is the question of wage growth - a key indicator about the state of a country’s economy. Pay growth has in fact receded of late at 3.6%, although it is still considered fairly respectable. On the understanding that some of these factors are structural instead of cyclical (demographic factors and the impact of less EU migration), we’d expect this trend to continue for some time.
The Brexit Election
We’re a recruitment agency not a political debating website so we won’t go into too much detail on the politics here; there’s plenty of that in general media. But the upcoming General Election on the 12th December is commonly referred to as the “Brexit Election”, and for good reason considering its inception. Brexit will affect jobs, so we thought we’d very briefly summarise the main three parties’ positions on the matter.
We’ll start with the incumbent Conservative Party. Boris Johnson has won EU support for his new deal and insists he wants to "Get Brexit done" as soon as possible. If he achieves a majority, he will push on with his Withdrawal Agreement Bill with Britain then set to leave the EU on 31st January at the latest.
The other two biggest parties are Labour and the Liberal Democrats. Labour have said if they get into power they will look to draw up a new deal with the EU and include it in a so-called “People’s Vote” with Remain as an option. They have also vowed to achieve this new agreement in three months or less from taking office which would almost certainly mean staying in a Customs Union. The Liberal Democrats however want to cancel Brexit altogether, and if they don’t win a majority the party will carry on campaigning for a second referendum.
In summary, the coming months and years still hold a large degree of uncertainty for the UK jobs market. The upcoming election together with a backdrop of Brexit ambiguity has made longer term planning incredibly difficult for businesses. That said, the day to day work still needs to be done, and roles must be filled, which is why it’s more important than ever to get your recruitment strategy right first time. This is where come in.
Call No Risk Recruitment today on 0117 4567160 for recruitment support and advice. Alternatively feel free to use our contact page and a member of the team will get back to you.