100 days since the referendum, what impact is the impending Brexit having on recruitment?

It's been more than 100 days since Britain voted to leave the EU. Since the vote, there has been much change and uncertainty. 

We have since got a new Prime Minister, new government, and the pound has fallen to a 31-year low as Britain's exit strategy is put into place. 

In the month preceding the referendum, we asked UK businesses for their thoughts. Now a third of the year has passed since the result, it is perhaps a good chance to see the effects the vote has had on employers and recruiters. 

What we know about Brexit

"Brexit means Brexit - and we're going to make a success of it." - Theresa May. 

The Prime Minister set out the government's stall at the Conservative Party Conference at the beginning of October with those words. But what does Brexit mean?

Studies they have conducted in the two months after the referendum show that 94% of professionals canvassed are concerned about a potential economic downturn, while the vast majority are also worried about the reduced access to talent.



It's hard to be sure for now, but what we do know is Article 50 of the Lisbon Treaty - which will facilitate formal exit negotiations - will be triggered by the end of March 2017 at the latest. 

The decisions to be made will have a direct impact on businesses in this country; how they employ people and the trade tariffs they may have to pay in future years. 

The term 'Hard Brexit' has received much airtime since the Conference season, mostly because the rhetoric used by the Prime Minister included announcing the intention to repeal the 1972 European Communities Act, which will see laws made in this country, rather than in Brussels. 

Since Brexit, the pound against the dollar has fallen as low as .21 for every £1. This is impacting on purchasing goods outside of the UK.



More significant than that though, is the rhetoric about becoming a "fully independent, sovereign country," and regarding immigration: "We will do what independent, sovereign countries do. We will decide for ourselves how we control immigration. And we will be free to pass our own laws."

Now, a soft Brexit would theoretically involve some access to the single market, in return for the UK maintaining an element of the free movement of people between the countries.

But because Mrs May spoke so firmly about the UK having power over its own immigration controls, it suggests a "hard" Brexit, which would also involve removal of access to the single market. 

The Prime Minister wants to maintain the benefits that the UK enjoys by having access to the single market. Let's not forget, it is valuable because it doesn't involve trading tariffs. 

However, the immigration stance would make this access impossible. 

The decisions to be made will have a direct impact on businesses in this country; how they employ people and the trade tariffs they may have to pay in future years.



In turn, the "hard" Brexit approach would inevitably affect British businesses and in some cases, their ability to employ. 


Important High Court ruling on Brexit


The government's plans for Brexit have a way to go yet after a High Court ruling in November that said Parliament must have a vote about whether the UK can put the wheels in motion to leave the EU.

Significantly, it means Article 50 cannot be invoked by the government, who will appeal this decision. 

Thoughts on Brexit from employers and recruiters

The terms of exiting the EU inevitably mean some changes to trade agreements and the movement of people from the member countries. 

These were the biggest concerns for employers who previously spoke to us. Have these concerns manifested into something tangible since?

Devaluation of the pound

Rune Sovndahl is CEO and Co-Founder of Fantastic Services, an on-demand cleaning services provider. His concerns previously were of the unnecessary bureaucracy that would be created through trade deals changing, as well as the ability to hire from abroad

However, the changes to Rune's business haven't come from either of these. Instead, the effects have been keenly felt because of the fall of the pound.

Since Brexit, the pound against the dollar has fallen as low as .21 for every £1. This is impacting on purchasing goods outside of the UK. 

What we do know is Article 50 of the Lisbon Treaty - which will facilitate formal exit negotiations - will be triggered by the end of March 2017 at the latest.



"It is harder when we are buying things outside of the UK," Rune said. 

This is an obvious pitfall for businesses, in that trading and purchasing with companies that aren't in the UK will, for the time being at least, mean that goods and products cost more than they did a few months ago. 

Although there has been no effect on jobs at Fantastic Services, it's extra costs like these that have the potential to damage. 

How important is freedom of movement?

As things stand, there hasn't been legislation to prohibit the movement of workers from EU countries. However, one recruitment agency told us that the Brexit vote has affected its hiring in some cases. 

MERJE is an agency that assists clients from a range of sectors and principal consultant Eleanore Sykes is experienced in placing EU nationals in UK roles over the last 10 years. 

She said there has been a slowdown of these candidates since the referendum, with ex-pats also questioning their futures. 

"The prestigious British financial services sector had previously proven very attractive to foreign nationals, but since the referendum, prospective candidates from within the EU are already questioning whether working in the UK is a wise move.

"One candidate even pulled out in the middle of the recruitment process as a direct result of the announcement on June 24th. We have also seen an increase in the number of British ex-pats exploring the possibility of returning to the UK."
However, the circumstances of the referendum and the help required by British businesses has seen a rise in accountancy activity.

Eleanore explained: "Brexit could represent an opportunity for certain sectors, particularly in accountancy, with businesses throughout the UK actively seeking advice and direction on how to deal with the fallout."

I sincerely hope that in our new future, we are able to continue recruiting across the EU member states because we need to continue to draw on that experience.



The food manufacturing industry is one that thinks Brexit may cause damage, if the words of The Sterling Choice are anything to go by. 

The biggest issue, their spokesperson said, is the challenge in finding staff for lower-skilled roles, which are sourced from the continent. Finding people to fill these jobs will then cost more. This "knock-on effect" could be detrimental according to the company.

"This will inevitably have a knock-on effect to the labour cost for companies which could therefore mean that managerial roles are not as well paid and therefore not as sought-after."


Skills shortage concerns

Global resourcing specialist BPS World have previously spoken about the importance of EU workers in potentially alleviating the country's skills shortage, which could be exacerbated as a consequence of Brexit. 

The company's Compliance Manager, Kris Simpson, says it's business as usual until Article 50 is invoked, the mention of which has had an impact on the pound; a clear sign that global markets and the country are sensitive to Brexit. 

Long term, it's anyone's guess how exiting the EU will impact available vacancies and access to talent. That depends on what the UK's eventual relationship with the EU looks like.



Although he believes businesses are not holding back from prospering, Kris raised serious concerns for the recruitment industry, and the service they provide to employers.

He explained: "One of the concerns for the recruitment industry was the reliance on skills from the EU, as the UK skills shortage is a real concern and the removal of free movement for skilled workers would widen the skills gap further."

"Due to the current uncertainty and the weak pound, we are already beginning to experience shortages of skilled workers and with no alternatives, this is causing concern to employers who rely on this workforce."

Has everybody felt a negative impact from the referendum?

Previously, the Association of Professional Staffing Companies (APSCo), conceded there was a serious business risk posed by Brexit, though their data in May showed demand within investment banking had gone up by 13%. 

Has the demand for professional staff in this and other sectors continued? 

According to APSCo, the studies they have conducted in the two months after the referendum show that 94% of professionals canvassed are concerned about a potential economic downturn, while the vast majority are also worried about the reduced access to talent. 

We have also seen an increase in the number of British ex-pats exploring the possibility of returning to the UK.



Despite over half of respondents having concerns about access to staff in the medium to long term, the number of permanent vacancies throughout the professional sectors has actually increased

The Finance sector - and contract vacancies in particular in this profession - have seen noticeable increases in staff

Even after these statistics, APSCo's CEO Ann Swain, believes it's hard to know how Brexit will impact the hiring process in the future.

"Long term, it's anyone's guess how exiting the EU will impact available vacancies and access to talent. That depends on what the UK's eventual relationship with the EU looks like, and although we have a definitive timeline for Brexit, the EU has made it very clear that they will not start any negotiation talks until Article 50 has been invoked."

Are employers still hiring despite Brexit?

A recruiter in the fields of market research, insight, analysis and planning showed that it isn't all doom and gloom and that in fact, hiring opportunities are still available.

Sinead Hasson, who is the founder and Managing Director of Hasson Associates, said that, despite the fear that Brexit would lead to difficulties in recruiting talent, the signs are good and that firms are still hiring

One of the concerns for the recruitment industry was the reliance on skills from the EU, as the UK skills shortage is a real concern and the removal of free movement for skilled workers would widen the skills gap further.



As a note of caution though, she did say that there needs to be more clarity regarding the process. 

"However, 100 days on, nothing is certain so whilst nerves have been calmed, the lack of information or clarity means there could still be an impact, not necessarily on positions but on who and how people hire."

The issue of movement of workers also weighs heavily on Hasson Associates, with the agency and wider industries they deal with reliant on national and EU talent pools. As such, the company has clients and candidates throughout Europe - something Sinead hopes to see continue.

"I sincerely hope that in our new future, we are able to continue recruiting across the EU member states because we need to continue to draw on that experience."

What about organisations that have many of their work operations derived from EU law? Refused Car Finance is one company that have to deal with this predicament. Many of its business finance lenders are regulated by the Financial Conduct Authority - which has many regulations from EU legislation.

Changes to these rules are inevitable during Brexit and the worry is that these changes will affect the number of approved applications from its panel of lenders. If this were to happen, the company would take a real hit on jobs.

As things stand, there hasn't been legislation to prohibit the movement of workers from EU countries. However, one recruitment agency told us that the Brexit vote has affected its hiring in some cases.



The company has placed restrictions upon hiring in light of the referendum. However, encouragingly, there has been no change in the number of applications or demographic of candidates. This suggests that freedom of movement has not yet been adversely affected in this industry.

Significantly, and despite these concerns, Refused Car Finance still plan to expand, which should create further employment.

A spokesperson said: "Despite the referendum result and the potential impact it would have on the motor finance industry, we want to continue with our plans to expand with new brands and franchises throughout the UK, which will ultimately require new employees."


Which sectors have seen little change since the EU referendum?

Your World Healthcare, the largest supplier of allied healthcare professionals to the NHS - aired their concerns previously by suggesting nurses and healthcare would have to be permanently placed on the skills shortage list. 

Their worry in particular was that restrictions on the freedom of movement would have a detrimental effect on the sector. 

Brexit could represent an opportunity for certain sectors, particularly in accountancy, with businesses throughout the UK actively seeking advice and direction on how to deal with the fallout.



However, although in 'limbo' until firm details are announced, Commercial Director, Greg Wood, said that things haven't changed a great deal since before the referendum.

"The healthcare recruitment sector hasn't reacted in any extreme way as of yet, quite simply because there have been no major policy announcements. Therefore, we're still in a state of limbo until we hear the detail of Brexit's implications. 

"Pre-Brexit pressure on healthcare workers remains, and it's business as usual in the healthcare recruitment market until we know more."

How have businesses been affected by the EU referendum?

There have been initial shocks following the leave vote, and as decisions are made and the path forward set in stone, there will surely be more. 

As things stand, it's been very much a mixed bag. Access to EU employees is what seems to be weighing heavily on the minds of many, but there are industries that have shown that the outlook is positive. 

It will be interesting to see how this progresses in the coming months. 

Written by John Train