Our Resources Guest Article comes from Christine Dyckes, Director & Finance Specialist at Avatar Recruitment
Recruitment and the EU Referendum - Are you aware of the impact on recruitment?
The REC is asking for our opinion on whether we should be a part of the EU or not. The impact on our business and yours is quite significant without even going into the economy! The REC is questioning the following:
REC members who are currently active in another EU country, for example sourcing EU candidates, placing UK workers into other countries or having an office in another EU country, will need to take a view on what a ‘Brexit’ might mean for their business. Would this jeopardise business interests, or would the possibility of a bilateral trade agreement offer suitable or better alternatives?
REC members who have no direct involvement with the EU will need to reflect on how the referendum outcome might impact on key clients (either positively or negatively) as well as on the overall jobs market and economy.
The EU single market gives British business access to over 500 million customers and EU trade accounts for 44.6% of UK exports of goods and services (ONS – Oct 2015). According to the REC’s JobsOutlook report (Nov 2015) 16% of UK employers plan to do more business in Europe. Although the EU remains the UK single largest export market, it has been argued that the importance of the EU as the UK’s main trading partner is decreasing. For example the share of UK goods exported to the region fell to a record low in April 2015 (45.1% of exports, down from 52% in the previous year (Oxford Economics/Haver Analytics). The question for our industry is whether leaving the EU would curtail growth and have a negative impact on hiring activities or whether potential benefits, such as cutting regulations and negotiating our own trade deals, would offset this?
Food for thought:
How are other business organisations approaching the debate?
An important part of the REC’s work has been to engage with leading employer organisations to
gauge the latest feedback on the pros and cons of EU membership.
Here is a brief summary of how other business bodies are approaching the debate:
Confederation of British Industry (CBI)
The Confederation of British Industry (CBI) approach is to provide clear evidence, share case studies from businesses of all sizes and sectors, host debate and discussion and evaluate reforms as they are achieved. The impact of the UK’s relationship with the EU on jobs and growth is one of the most important aspects. Specific reforms the CBI are calling for include reducing and simplifying the rules so business can grow, breaking down barriers to European trade in services and doing more to
open up global markets.
Federation of Small Businesses (FSB)
The Federation of Small Businesses (FSB) survey showed that 47.0% of small business owners would vote Yes, the UK should remain a member of the EU, with 40.9% indicating they would vote No and 10.7% saying they had yet to decide. One core message from the FSB survey is that small businesses felt that they lack clear, impartial information on which to form their views, with only one in five
(19.2%) feeling ‘very well’ informed about the EU referendum.
British Chambers of Commerce
A British Chambers of Commerce survey showed that if an in-out referendum were to be held in August 2015, 63% of business people would vote to remain in the European Union, 27% would vote to leave, and 10% are unsure. 50% said their vote could change depending on David Cameron’s renegotiation package. Over eight in ten business leaders report no material impacts of the planned
referendum on their businesses to date. If the UK were to leave the EU, 40% currently expect this would have a negative impact on their overall growth strategy.
The representative body for independent professionals and the self-employed (IPSE) estimate that of the UK’s 4.5 million people who work for themselves, at least 11% regularly work in Europe. According to IPSE’s last survey, 61% of freelancers would choose to stay in while only a quarter (24%) would choose to leave. When asked whether our continued membership would be in the best
interests of their business, 41% said this would be the case regardless of whether reforms are
achieved, but 29% need to see real change before they can be convinced.
What could the referendum outcome mean for jobs and skills?
The lack of suitable candidates in areas such as engineering, health, technology, care, hospitality and
logistics is a major challenge for the UK jobs market. The REC’s Report on Jobs for February 2016 shows that overall demand for staff has now increased for 40 consecutive months. The latest Employer Skills Survey from the UK Commission for Employment and Skills (UKCES) shows that the number of positions left vacant because employers cannot find people with the skills or knowledge to fill them has risen by 130% since 2011. According to the UKCES report, so-called ‘skills shortage vacancies’ now make up nearly a quarter of all job openings, leaping from 91,000 in 2011 to 209,000 in 2015.
Whilst free movement provisions would be curtailed in the advent of a ‘Brexit’, it has been argued that a ‘points-based’ visa system could apply to workers with the most in-demand skills and that there should also be an onus on upskilling the UK workforce. Would this ensure that UK businesses can still access the staff and skills they need? Whatever the outcome of the referendum, it is crucial to ensure that there is an informed debate on the practical implications for the UK jobs market and access to key skills. The practical insight from REC members will have a crucial role to play here.
Free movement cuts both ways. According to the United Nations Population Division there are around 1.3 million British-born people living in another EU country. Would a ‘Brexit’ limit the opportunities for UK nationals to develop the international awareness and adaptability that UK firms need to win the global race? Or, could bilateral agreements be put in place to maintain these international opportunities?
Questions you may well ask?
- What would be the impact if free movement of workers was restricted?
Would the UK workforce be able to compensate? Would a ‘points-based’
visa system maintain access to key skills and talent?
- Overall, would leaving the EU facilitate or hinder your access to key skills and talent?
- How important is exposure to different working cultures and overseas experience to career development in your sector(s)?