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Brexit: The recruitment industry responds

June 30, 2016  /   No Comments

Many were shocked at the results of last week’s EU referendum, while others were delighted – but what effect will it have on the recruitment industry?

First, we know that there will be no change in our legislative make up until Parliament decides to amend or repeal the European Communities Act, which was the enabling Act that facilitated our entry into the EU constitution in the first place. Second, Parliament has to decide when to give effect to Article 50, namely give formal notice of termination to the EU. When these steps will actually happen has been a major subject of discussion and contention among politicians and with the EU itself over the past week.

In the meantime, representatives from leading recruitment industry bodies and businesses have offered their insights on this momentous result and what it will mean for the recruitment sector.

Adrian Marlowe, Chairman of the Association of Recruitment Consultancies (ARC): “What can be seen is that with the change engendered by the referendum there is more opportunity to press for a flexible employment model in the UK that supports all. The entrepreneurial spirit that is embraced by the recruitment sector, one of the UK’s flagship industries, should be allowed to flourish.”

Julia Kermode, CEO of the Freelancer & Contractor Services Association (FCSA): “Leaving the EU will undoubtedly bring a period of uncertainty – and as we have witnessed in the run up to this referendum, demand for contractors has been high and I see this demand increasing particularly if the rules on immigration tighten up. However, it should be borne in mind that exit will not be instant, stability is needed and now more than ever it is important to ensure that firms have the right skills in place. Once again, the flexible workforce will be key in ensuring the UK’s economy doesn’t suffer.”

Kevin Green, Chief Executive of the Recruitment & Employment Confederation (REC)“The vote to leave the EU is likely to usher in a challenging period for British business and for the UK labour market in particular. Our data has shown a slowdown in hiring as we approached the referendum. We expect to see this period of uncertainty continue. Nothing will change overnight. There will be a prolonged period of renegotiation and readjustment. During this time government needs to do everything possible to help businesses to grow and create jobs.

“That involves outlining a timetable of renegotiation to help organisations make informed strategic decisions. We call on policy-makers to set out the plan for implementing changes to employment regulations such as the Agency Workers Directive and the Working Time Directive.”

Samantha Hurley, Operations Director at the Association of Professional Staffing Companies (APSCo): “Britain has decided that the EU experiment, with its expansion into social and employment policy, hasn’t worked for this country, with 51.9% of the electorate voting to leave the Union. At this early stage, there is little detail on how Brexit will affect the regulation of the professional recruitment sector. However, this result brings the possibility that the Agency Workers regulations (AWR), and other inappropriate EU-derived legislation, could, at some stage, be reformed. APSCo will, of course, be working closely with Government regarding any changes, and will keep members abreast of all developments.”

Peter Cheese, Chief Executive of the Chartered Institute of Personnel and Development (CIPD): “Now is not the time for hasty decisions or knee-jerk reactions from government or employers. Evidence suggests that the UK’s flexible labour market already strikes the right balance between providing flexibility for employers and employment rights for workers. Another key element of our flexible labour market is that it enables employers to access or bring in skilled and unskilled workers from outside the UK to help support business growth and address labour shortages in our public services. It is important that this is not forgotten in any reform of the immigration system.”

Sinead Hasson, MD and founder of  Hasson Associates: “As the owner of a small business the outcome will have a very real impact on my business and on the industry I recruit for. At Hasson Associates we recruit for the market research and insight industry, it’s an industry reliant on the knowledge and experience of people not just here in the UK, but across the whole of Europe. Our clients are international and our candidates come from all corners of Europe, those candidates make a valuable contribution to the research industry and I can’t imagine a research agency without representation from those countries.”

John Salt, Group Sales Director at totaljobs: “In the wake of the EU Referendum, and the political, economic and social chaos that has ensued, it’s important that HR professionals, or anyone who looks after recruitment and HR issues, maintains a steady and pragmatic approach.

“Totaljobs’ pre-referendum research found that 87% of Europeans living in the UK were worried about the impact of a Brexit vote, with 49% fearing for their job security. With the UK’s economic health in doubt, and with many companies warning of potential job losses, businesses should be looking to reassure all of their employees, whether Europeans or UK nationals, of their job security, wherever these assurances can be guaranteed.” 

Phil Foster, MD of Love Energy Savings:For SME owners, one of the issues that is now front of mind will be how this affects their recruitment strategy. UK businesses of all shapes and sizes have, at some point or another, relied on the European Union to supplement their workforce. The UK is still in the midst of a skills shortage, and EU migrants have provided many of the vital skills that we were lacking. There is a chance that the UK will no longer be the talent magnet it used to be, resulting in more bureaucracy and a reduced candidate pool for SMEs to dive into.

“However, the alternative view is that the Brexit will actually improve recruitment options for UK businesses. There is a very real possibility that the UK may now introduce a points-based system, such as that used in Australia, which could result in us welcoming in higher quality candidates.”

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