Brexit and future immigration policy

With many employers unaware of the government’s post-Brexit immigration plans, Government needs to encourage employers to prepare for the impending restrictions on access to EU skills and labour.

The situation

Employers are set to face skill shortages and recruitment difficulties as a result of post-Brexit migration restrictions, as well as a dampening enthusiasm for the UK as a place to live and work due to general Brexit uncertainty. These issues may in turn hamper business growth.

Following the UK's exit from the EU on 31 January 2020, passage of the EU Withdrawal Bill puts in place a transitional period that will run until 31 December 2020. Although this means there are no immediate changes, the transitional period is finite. An alarming proportion of employers are still unaware of the current government proposals on post-Brexit immigration, and very few have put in place measures to prepare for restrictions on access to EU skills and labour.

CIPD viewpoint

The status of the UK’s withdrawal ‘deal’ and the potential disruption to cross-border trade has been the focus of attention so far. However, where employers are likely to be impacted most is through their workforce.

Over half of UK employers say they currently employ EU citizens, with other evidence suggesting that UK employers find EU migrants a valuable source of labour at all skill levels, especially where they’ve difficulty attracting sufficient UK candidates. These employees are presently covered by the freedom of movement provisions of the Single Market (meaning there are no restrictions on employing them); this will change when the UK leaves the EU.

The government’s current immigration white paper sets out a post-Brexit immigration policy that would treat EU and non-EU migrants on the same basis. Employers will therefore face new costs and additional administration if they wish to employ skilled EU migrants. Furthermore, their ability to recruit EU migrants to fill low or medium-skilled roles seems set to be limited. In refining the details of the new system, the government needs to consider how the costs to employers can be avoided or minimised, and ensure that employers will still be able to access the skills they need at all levels. Employers, for their part, need to reassure existing workers and undertake workforce planning and preparation for when migration from the EU is not as seamless as it is now.

Actions for Government

Create a two-year mobility visa to allow all EU citizens to study or work in the UK for a maximum of two years without a job offer, irrespective of age. This will allow employers to avoid the cost and bureaucracy of using a points-based system while meeting their demand for unskilled labour.
Lower salary thresholds for some jobs on the shortage occupation list. If the median annual earnings for a shortage occupation lies below the £30,000 threshold, this should become the default minimum salary threshold for that particular occupation. This would help ensure that those sectors employing relatively high numbers of EU citizens on relatively low salaries are able to overcome acute labour and skill shortages through migrant labour.
Support good work practice through legislation to ensure that routes into work are open to as many UK nationals as possible.
Engage with employers and industry bodies to develop a communication strategy that ensures all businesses are aware of new legislation and transitional arrangements.

Recommendations for employers

Connect regularly with EU nationals in your workforce. Update them on developments, reassure them of their value to the organisation, and assist them with whatever steps are needed to attain settled status in the UK.
Plan ahead for future workforce requirements and how these might be met given reduced access to EU nationals.
Consider alternatives to hiring EU nationals; for example, from other talent pools including among older, disabled or long-term unemployed people, or ex-offenders.
Review your branding, job adverts and engagement activity with local educational institutions to help sell your organisation, especially if the role or sector is deemed to be unattractive.
Train and develop your existing workforce to reduce dependence on EU migrants.
Take a look at our summary for people practitioners to find out what actions you need to take for Brexit.