The UK woke up this morning to the news that the Leave campaign achieved victory in the EU referendum, securing 52% of the vote to Remain campaign’s 48%. Negotiating the terms of Brexit may take up to two years and while it is still difficult to predict how the transition will affect UK businesses, here are some of the issues HR needs to consider:-
Skills shortages or hiring freeze?
REC’s latest JobsOutlook survey released this week revealed that just over half of UK employers predict skills shortages, with a lack of candidate availability expected in sectors including health, engineering and technology. Concern was also raised over the availability of labour in lower paid sectors which have traditionally relied on EU workers. The impact of the Leave vote remains to be seen, with REC predicting a possible hiring freeze as employers come to terms with Brexit.
Graduate recruitment takes a hit?
A survey from PathMotion suggests that, prior to the result of the vote, 50% of the UK’s leading graduate employers anticipated a reduction in graduate recruitment due to the uncertainty. Among the most ‘at risk’ sectors are banking and finance, technology and retail, with up to 50,000 graduate jobs in the balance. A shrinking talent pool would be the biggest obstacle to graduate employers. As we have reported previously, UK businesses currently pay up to 30% above current market rates in sectors such as IT and finance to graduates from non-British universities. It isn’t all bad news for graduates as a number of companies declared their intention to increase their intake of UK graduates to offset a potential reduction in EU candidates.
Working Time Regulations
The Working Time Regulations affect areas relating to rest breaks, working hours and holidays. A post-Brexit UK has the ability to amend the rules on these issues. Similarly, agreements on bonus caps introduced in 2015 may also come under scrutiny. While businesses will have more flexibility to change rules and relax red tape, this is not expected to happen immediately.
Pressure on wages
Despite the introduction of the National Living Wage, overall salary increases have remained around the 2% mark for some time. This may change if access to skills becomes more difficult for UK employers. Stuart Rose, a Remain campaigner and former head of M&S, predicted a rise in average salaries back in March in the event of a Leave vote. The UK currently has the second highest minimum wage in Europe after Luxembourg.
Increased competition for talent
A survey from CV Library found this week that around half of all job applicants accept multiple job offers, using them to negotiate a better job offer with prospective employers. Nearly two thirds (64%) will accept an offer yet still continue their job search. If predictions of a greater talent shortage prove to be correct, employers will need to review talent attraction and retention strategies to continue to attract qualified candidates, especially in sectors where skills are already in short supply. Attention must be paid to isssues such as the candidate experience, flexible working, career development opportunities and employee engagement.
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