Ending EU citizens' free movement will damage UK businesses and public services unless post-Brexit immigration policies factor this in, according to a report from the CIPD and the National Institute of Economic and Social Research (NIESR).
The survey of 1,000 organisations, Facing the future: tackling labour and skills shortages post-Brexit, found that 11% of organisations are considering relocating all or part of their UK operations, or will focus future growth outside the UK (9%), if they experience significantly reduced access to EU worker skills.
One in 10 (11%) businesses say the number of EU nationals they have recruited since Brexit has already decreased.
The report comes as Brexit talks commence as scheduled despite the doubt cast by the general election result and ongoing talks between the Conservatives and Ireland's Democratic Unionist Party. Questions are being raised, however, over the course these negotiations will now take given Theresa May's failure to secure a stronger mandate through calling a snap general election.
Peter Cheese, chief executive of the CIPD, warned that access to labour is a huge concern for employers. “If the government does not provide a straightforward, flexible and affordable immigration system for EU nationals post-Brexit, as set out in our recommendations, significant numbers of employers are likely to face skill shortages that may hold back their growth and performance,” he said.
“With the Brexit negotiations starting this week there is still little clarity on the immigration system that the UK will adopt after Brexit. An overly blinkered approach focused on simply cutting immigration to tens of thousands and focusing only on high-skilled employees could leave employers high and dry, especially those who rely more on EU migrants to fill low-skilled jobs.”
Heather Rolfe, associate research director at NIESR, said that the government must take action. “It would be very unwise indeed for the government to end free movement without putting in new policies that enable employers to meet their needs for lower-skilled labour,” she said.
The report calls on the government to review and expand the labour shortage occupation list for EU nationals to include jobs at lower levels of skills and salary, where there is evidence that labour shortages are difficult to address and damaging to employers.
“Our research adds further weight to evidence that employers don’t recruit EU migrants in preference to British workers, but because they attract too few British applicants,” added Rolfe. “Many employers would like to recruit more young people but working in a meat factory or a care home is not top of the list for school leavers now, and never has been.”
The CIPD/NIESR report also coincides with five major UK business bodies coming together to call for continued access to the European single market until a final Brexit deal is made with the EU. The letter to business secretary Greg Clark is from the British Chambers of Commerce, the Confederation of British Industry, EEF, the Federation of Small Businesses, and the Institute of Directors.
