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The Brexit Effect

Tuesday, 05 November 2019

What are the likely effects of Brexit on the British recruitment industry and labour market in general?

Since the close 52/48 result of the referendum to leave back in June 2016, which served to set Britain on a somewhat turbulent trajectory, no one could have foreseen the extreme twists and turns in the political arena that have culminated in the unbelievable delays that the country now faces at the eleventh hour.

It was all go for leave on October 31st

That is what was promised and, regardless of your political persuasion, it did seem that a real effort was being made to sort this out once and for all. So who could have predicted that in just over a month the country will be going to the polls to vote in a general election just two weeks before Christmas on December 12th!

A staggering 72% of the population voted to uphold the values that they held dear, back in 2016, but in the three and a half years since what has actually been achieved?

The political climate has changed somewhat and the real crux of what Brexit means has also altered. This has led to countless discussions, arguments and political careers being ruined as MPs have been forced to leave their former party citing differences as the cause.

Stephan Bevan, head of HR research and development at the IES Institute for Employment Studies,  is quoted as saying,

Isolating the effects of Brexit from a range of other factors influencing the way the UK labour market is performing is a complex task.’      

If our government cannot get their act together how can businesses be expected to invest and expand in such turbulent times and importantly, how can recruiters and HR companies know how best to plan for future labour market requirements?

An initial look at the job market shows that it had until recently remained fairly resilient with the lowest levels of unemployment since the latter part of 1974. However it will not be able to sustain such a degree of political unrest and in fact the cracks are already starting to appear as economic uncertainty and the confirmation of a December election will no doubt erode confidence even further.

Labour market insights

  • The number of permanent jobs has declined for 7 consecutive months
  • Temporary jobs are also declining
  • The rate of new growth in the job market is also stalling

According to a recent REC report, Recruiters and Employment Confederation, at least 49 % of employers have expressed serious concerns about the future availability of suitably qualified or experienced candidates for permanent roles with the health and social care, hospitality and engineering sectors particularly at risk.

Prior to the EU Referendum, the measure of employers’ confidence in the UK economy showed a level of +26 but since July 2018 this had fallen from a net figure of +6 to -30.

A shocking decline indeed and a worrying insight into the future with a downward spiral across the entire industry.    

Post Brexit Britain must ensure the following:       

  • Confidence in financial markets
  • Reduction in perceived investment risk
  • This relates directly to GNP and a buoyant import /export market
  • In turn this increases the demand for employees whether temporary or permanent
  • This increase in the number of jobs advertised results in a wider and richer choice to recruit potential candidates from
  • As the market picks up those currently employed will start to demonstrate the confidence to move between companies, and this in turn will result in the momentum needed to maintain this new growth

How can businesses and recruiters overcome these issues?

As an experienced and long standing recruitment agency in the Southend area, One to One Personnel understand these fears only too well. We have made a determined effort to support our clients by ensuring we are always up to date with the Brexit situation and the subsequent effect on each individual industry sector that we service.

This local ‘on the ground’ knowledge is invaluable to businesses meaning we can report trends and issues with accuracy helping to navigate our clients to more positive and cost effective outcomes in their recruitment plans.

Why not book an informal, no obligation, chat with us to see how we can support the HR requirements of your company over the coming months?

Call Ian on 01702 46 44 44.

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