Businesses unprepared for post-Brexit immigration drop

?As the current Brexit deadline of 12 April approaches, new research reveals that the majority of UK firms are unprepared for immigration changes

Three-quarters (76%) of UK mid-market businesses have no funds in place for post-Brexit immigration, according to research by law firm Shakespeare Martineau.

The survey of 132 decision-makers in UK businesses revealed that Brexit is already affecting HR and recruiting strategies. It found that 41% of businesses have already experienced a decrease in access to talent and skills since the triggering of Article 50 on 29 March 2017.

A third (33%) of businesses have already experienced a decrease in the number of workers coming to the UK since that date, while a quarter (26%) said they had already recruited fewer EU workers into their organisation.

The survey also found that many UK businesses are burying their heads in the sand when it comes to assessing how Brexit will affect their workforce. More than a quarter (27%) said they had yet to analyse the impact of immigration changes on their HR and recruitment strategies going forwards.

Tijen Ahmet, a legal director specialising in business immigration at Shakespeare Martineau, said that organisations are coming under strain as a decision on Brexit approaches. “We are now so close to having a decision finalised – whatever it may be – about the UK’s future relationship with the EU and, despite evidence that many businesses have felt pressure on their recruitment channels so far, there appears to be inaction within the marketplace,” she said.

The prospect of no longer having unrestricted access to EU talent means that businesses will have to look towards other international labour pools, Ahmet added.

She highlighted that the cost of recruiting someone on a Tier 2 visa for a three-year contract in the UK is more than £5,000 per person. This includes costs for application fees, the immigration health surcharge and immigration skills charge. If the worker wanted to bring their spouse and two children this sum rises to approximately £11,000.

“The UK has enjoyed access to EU labour for so long and once that tap is turned off many organisations will find themselves faced with a hole in their recruitment strategy," she said. "Exploring other global talent markets is going to be increasingly important. However, this comes at a price. The current Tier 2 visa system for skilled workers is expensive and if employers find they need to use this system to plug gaps in their businesses the costs could soon climb.”

Ahmet added that, while there has been some improvement in clarity over the future immigration system, employers must still move quickly to help assess potential talent gaps. “Immigration has been one of the fiercest Brexit battlegrounds so far, but at least we now have some clarity about what the future system will look like and how it will function. It’s positive that EU migrants and their families who are already here will be able to stay – providing they apply under the new EU Settlement Scheme – but many will already be leaving and businesses must prepare,” she said.

“The first vital step is undertaking an audit to understand the makeup of the workforce; understanding which people will be affected and how. After gaining that insight, plans can be put in place to help plug talent gaps that might spring up in future. If this involves recruiting from other non-EU geographies, careful thought must be given to how to get individuals over to the UK and the costs must be picked up by employers along the way.”

The survey was conducted by Shakespeare Martineau at the end of 2018 with mid-market businesses across the UK. 132 people responsible for making workforce and staffing decisions were profiled, at organisations with turnovers between £10 million and £150 million. Of the individuals surveyed, 71% were operating at C-suite or senior management level.