09 May 2017

The UK Faces Professional Labour Shortage

UK companies are afraid that Brexit will increase the current shortage of skilled workers. A report from Recruitment and Employment Confederation (REC) stated that in the last 16 months, the suitable job candidates for various professions have rapidly decreased. The most in-demand sectors are in engineering, IT and nursing.

“We have the lowest unemployment rate since 2005, and people already in work are becoming more hesitant about moving jobs amid Brexit uncertainty. Meanwhile, the weakening pound and lack of clarity about future immigration rules is putting off some EU nationals from taking up roles in the UK.” REC Chief Executive Kevin Green explained. According to Green, the demand for workers is increasing within all sectors, but there aren’t enough qualified people to “fill the vacancies”.

REC is not the only group expressing concerns. A survey by human resources group CIPD found that as a direct result of Brexit, many EU nationals are looking to leave their British workplace. One in every three UK employers is worried that they will soon will face “significant recruitment challenges”. According to the Office for National Statistics, the number of EU workers fell by 50,000 in the last three months of 2016, which was the biggest drop in five years.

And while that might be good news for Theresa May, who promised to reduce immigration into the UK to less than 100,000 in the dawn of the Brexit, businesses don’t share the same opinion. The outflow of EU workers doesn’t necessarily mean the empty positions will be filled by local employees. According to the CIPD report, a quarter of employers said they would leave positions vacated by EU workers unfilled, and less than 10% said they are ready to increase salaries to attract UK professionals.

There is the bigger picture as well. Many larger employers fear that a drain of skilled workers will have a deeper impact on the economy. As Kevin Green from REC said, “Every shortage has wider implications, for example, the exceptional reputation UK engineering enjoys globally is at risk because employers can’t find people with the skills they need.”

Meanwhile, in London, the major banks in the City are also experiencing labour difficulties after the triggering of Article 50. Deutsche Bank has already confirmed that it will transfer almost half of its workforce – 4,000 people—to Frankfurt and Dublin. Another 1,000 employees from JP Morgan will be relocated to a few European cities, while Goldman Sachs, despite building a new headquarters in London, is currently recruiting bankers for its branches in Madrid, Milan and Paris. Brexit-related changes have also been planned by HSBC, Citigroup and Morgan Stanley. According to Reuters latest reports, the City will lose up to 9,000 jobs as a result of the UK leaving EU.