What does Brexit mean for your growth plans?
While members of the professional recruitment sector are busy trying to figure out how the Brexit vote might impact their business in both the short- and long-term, most experts agree that there is no need to panic – because very little is going to change immediately.
Immediate concerns about financial market volatility
Perhaps the biggest concern right now is whether financial market volatility and any economic slowdown will affect demand for recruitment companies’ services. Trading conditions may be too uncertain for some British businesses to hire more workers, for example. It is worth remembering that we have already been living with some of this uncertainty in the months running up to the referendum, when many companies were already delaying new hirings. Some businesses may opt to avoid the risk of recruiting permanent staff in the short term, and instead choose to hire contractors and temporary staff until the Brexit future becomes clearer. There is also the possibility that some employers who put off recruiting during the referendum campaign may now start to hire again if they decide they cannot wait any longer.
For those companies in the midst of growth plans and seeking investment, there will be the additional worry of whether Brexit uncertainty will knock investor confidence, making it more difficult to secure the necessary funding. If you can continue to grow your company, however, rather than putting plans on hold, the chances are you will be in a stronger position in the event of a recession or longer-term uncertainty. After all, the wider your client base, the greater the stability of your company when the going gets tough.
Concerns about future regulatory reforms
It is possible that leaving Europe will trigger regulatory changes that impact our recruitment landscape, including employment law, immigration, and working overseas – but it's worth bearing in mind that our laws will not just automatically change because of Brexit. Many of the EU-originated laws have been implemented in the UK via Acts of Parliament. These will stay until a UK government decides to amend or repeal them. Some legislative areas are, however, more likely contenders for reform – such as the Agency Workers Regulations (“AWR”) and the “TUPE” Regulations.
Of greatest concern is the changes that might come about in terms of freedom of movement. More than two million EU citizens live and work in Britain, alleviating many of the existing skills shortages - particularly in industries such as engineering, IT, healthcare, hospitality, construction, education and manufacturing. They also provide a lot of the lower-paid skilled work. If EU workers were forced to leave the UK, many companies might struggle to fill skilled positions in many areas, and businesses might struggle to find the funds to hire and train indigenous workers.
It looks likely that Brexit will result in restrictions on the number of low-skilled workers coming to the UK, while welcoming an increasing number of high-skilled workers. This would prove tough for those sectors that rely heavily on low-skilled labour, such as construction and agriculture. Recruitment companies targeting these sectors will therefore need to look into alternative sources of labour now, before any potential reforms – while avoiding non-compliance and ensuring all the necessary pre-employment checks are carried out.
Reframing Brexit as an opportunity to try a new approach
New circumstances often deliver fresh opportunities. Brexit gives recruitment firms the chance to campaign for a flexible employment model in the UK that supports everyone.
Once Brexit negotiations are under way, there is a real possibility that the UK’s new relationship with Europe could signify major ramifications for recruiting into, or from, the remaining EU. At this stage, however, due to the many complexities involved, it is impossible to predict the outcome of the exit deal with the EU.
Official exit discussions and negotiations are not set to begin for some months, and will inevitably take a significant amount of time, so – as the Association of Professional Staffing Companies (APSCo) says – from a regulatory perspective nothing is going to change this year, or even in 2017.
Forward-thinking recruitment firms will be trying to view Brexit as an opportunity to try out a new approach to business. They will be working hard to carry on sourcing skilled and unskilled workers that are in demand here, while at the same time lobbying government to ensure any future reforms of the immigration system consider the importance of workers from outside of the UK. Access to talent is vital to support our economic growth and prosperity.