Labour In the UK post BREXIT

Posted on 29 July 2021

When the UK's referendum vote to leave the European Union became an issue in 2016, there was immediate uncertainty for the labour market. The UK's membership in the EU has direct effects on the countries labour market because of the free movement of people and workers. As there was a foreseeable restriction in movement, people became wary about its impacts on employers and businesses.

The pessimism about the labour market and economic well-being was essentially a self-fulfilling prophecy. People became uncertain, which caused a hiring freeze and a drop in job postings. It also caused business confidence to fall to a record low, as the loss of movement through the country could cut labour supply and business opportunities.

Since the United Kingdom left the EU in January 2021, we can consider whether this uncertainty was warranted. Some insights can be provided on how the labour market is adjusting to the new independence.

Overall employment increased compared to the hiring freeze that happened post-referendum. Post-Brexit UK employment rates are thriving. Employment levels have continued to grow sharply since 2016. The worry about the loss of business did not come to fruition. The labour market remains strong, and the number of openings is still skyrocketing.

Recruitment Difficulties

Now that it is more challenging for EU members to move to the UK, there has been a significant slowdown in placements made. The increase in the number of EU citizens coming to the UK since Brexit has not risen to match the spiking employment growth. Therefore, there has been a difference in the supply of workers and the demand for open positions. The discrepancy has caused hiring issues for many companies.

However, employers have not lost interest in EU workers. UK's employers want to find the best person for the job and do not consider nationality a deciding factor. Employers have stated that their jobs are left vacant for all skill roles because of the lack of domestic applicants and the Brexit barriers for EU citizens.

 

Skill Set

 As Brexit has resulted in a restriction of workers, the UK is facing recruitment difficulties. There are skill shortages in all sectors, but those recruiting high-skill and low-skill jobs have the most challenges.

High-skilled jobs include sectors such as health, finance, or education. Opposed to low-skilled jobs, which are in industries such as agriculture and hospitality. These jobs seem to be lacking supply because they are the most reliant on EU workers. There are not enough UK workers to fill the positions due to lack of skill or low pay, and poor working conditions.

 

What Are Companies Doing?

Companies have had to pivot with the overwhelming amount of UK job openings with not enough domestic citizens to fill the roles. There seems to have been an upward pressure on wages to incentivise either working a lower-skilled job or provide training to fill positions requiring greater skills.

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