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The Actuary The magazine of the Institute & Faculty of Actuaries

Fall in supply of EU nationals leading to skills and labour shortages

Labour and skills shortages are on the rise in sectors that employ a high number of EU nationals following the UK’s Brexit vote, according to the CIPD and The Adecco Group.

Significant slowdown in non-UK nationals from the EU working in the UK ©Shutterstock
Significant slowdown in non-UK nationals from the EU working in the UK ©Shutterstock

Their joint Labour Market Outlook report reveals that companies are increasingly finding it difficult to recruit the right staff, with figures from the Office of National Statistics, released today, showing that the number of EU workers in Britain fell by 50,000 in the last three months of 2016.

In addition, the research shows that 27% of employers have seen evidence that non-UK nationals from the EU are considering leaving their organisation or the UK in 2017, which rises to 49% for those in healthcare.

CIPD labour market adviser, Gerwyn Davies, said: “The most recent official data suggests that there has been a significant slowdown in the number of non-UK nationals from the EU in work in the UK.

“This is creating significant recruitment challenges in sectors that have historically relied on non-UK labour to fill roles and who are particularly vulnerable to the prospect of future changes to EU immigration policy.

“With skills and labour shortages set to continue, there’s a risk that many vacancies will be left unfulfilled, which could act as a brake on output growth in the UK in the years ahead.”

The research involved a survey of more than 1,000 employers, with 26% of respondents saying they would “pay the difference” and absorb the extra cost of recruiting EU nationals should there be restrictions on migration.

However, 19% of employers said they would seek to retain older workers, 17% said they would invest more in training and up-skilling, another 17% would recruit more apprentices, and 16% would look for UK-born graduates.

“The big decisions that Britain took last year are beginning to show in the UK labour market,” The Adecco Group UK & Ireland CEO, John L Marshall, said.

“It is encouraging that some employers are beginning to look to new solutions for their future workforce with investment in retraining and apprenticeships, but many more need to begin this planning and investment in their workforce.

“While the outcome of Brexit negotiations is still uncertain, employers’ access to EU migrant workers is likely to change.

“Investing in young people is a solid long-term strategy, but employers also need to face the facts and prepare for a situation where they might lose access to significant numbers of skilled EU workers in the near future.”