Lacklustre GDP figures raised eyebrows in March. Inflation and wages took a bullish turn and, according to Alex Lydall, head of corporate FX at Foenix Partners, “sanguine UK markets will be short-lived if growth fails to uplift towards the 1% mark in the short-term.
“With Brexit soon upon us, clear pressure on the domestic economy will weigh on the ability to raise rates at the sort of pace the US is currently encountering, possibly curtailing the upside for Sterling.”
Such factors have been fuelling doubt and speculation – especially in the way of securing talent. Many have given voice to the possibility that our referendum decision will impede the UK’s future ability to attract European workers.
While this sentiment isn’t backed by everyone, we have already started to feel the effects. Indeed, Monster.co.uk found that the number of EU workers actively searching for UK jobs has dropped by 11.4% since the vote.
The research also highlighted that Romanian employees were now the most reluctant to apply for UK jobs. Based on search traffic results, Monster.co.uk claimed there was a 52% drop in Romanian job seekers. This was followed by a 42% decline in Portugese workers and a drop of 35% in Polish candidates.
Sinead Bunting, VP of Europe’s marketing sector at Monster.co.uk, suggested declining levels of interest threatened to leave UK businesses unable to fill critical skilled roles.
“While no one knows for sure what kind of deal the UK will get as it exits the EU, it seems certain we will end up with controlled movement of EU workers, further restricting the supply of labour against a background of rising vacancies and full employment,” Bunting said.
Skills shortage concerns are an increasing area of debate. The Federation of Small Businesses (FSB) announced that 21% of SMEs employ workers from the EU. George Koureas, parter at Fragomen, pointed out that 47% of high-skilled workers considered leaving the nation within the next five years.
“The latest immigration figures also show that net migration has fallen by 27%,” Koureas said. “This exodus is largely the result of uncertainty, together with the perceived anti-immigrant sentiment and the devaluation in the Pound, which has essentially narrowed the gap between what foreign workers earn in the UK compared to their country of origin.”
Training will likely become a costly expense, with Brexit analysis from the Open University highlighting that companies could now pay around £2bn a year in recruitment costs and temporary staffing bills.
Commenting on the statistics, Matt Weston, managing director of Robert Half, went so far as to suggest the UK was in a war for talent.
“While the unemployment rate shifts month to month, overall this figure has remained relatively low for an extended time – further illustrating the skills shortage across the UK,” he said. “With the fourth industrial revolution affecting most aspects of our life today, businesses need to consider how the future workplace needs to adapt so that we can continue to attract, retain and develop top talent into the UK economy.
“Through a more digital and automated model, we can adopt less labour and time-intensive processes and instead, spend more time on value-added work. It is this shift where companies need to look ahead and ask questions about how they can up-skill their current workforce and consider the progression this offers.