The jury is still out on whether Brexit’s impact on the UK jobs market was masked or magnified by the pandemic.
Official data shows around 1.3 million people born abroad left the UK between July and September 20201. The approach of Brexit – which came into full effect at the end of the year – was probably only partially responsible for the exodus.
Many foreign workers chose to leave for more immediate reasons, like the loss of their job, frustration at being stuck on furlough or simply the desire to hunker down with family in their hometown.
Either way, the net loss of workers has plunged parts of the economy into a staffing crisis. The problem is particularly acute in sectors that had to shift from total closure to being very busy – all in a matter of weeks – as lockdown restrictions were eased.
Eye of the storm
Hospitality in particular has been at the eye of the storm. ONS data shows that in March alone the food services and accommodation sector saw vacancies spike by a gravity-defying 265.5%2.
In pre-pandemic times, hospitality was heavily reliant on foreign-born staff, so the exodus of foreign workers has hit the sector harder than most.
With customer demand surging after months of restrictions, many hospitality businesses are desperate to hire – and fast. A battle for talent has begun, and Indeed Flex data shows that wages have risen by as much as 14% compared to their 2019 levels as employers compete for staff3.
We’re seeing similar bottlenecks emerge in other sectors that have traditionally relied on foreign talent, such as retail, logistics and agriculture.
The end of the Freedom of Movement for EU citizens has also made it harder for employers to import lower-skilled workers from Europe. The UK’s new immigration regime, which came into force at the start of 2021, prioritises ‘those with the highest skills’.
Meanwhile EU workers appear less keen to come. Analysis by the job site Indeed shows that searches for UK-based jobs by EU jobseekers have fallen 45% since the 2016 referendum, and 41% since 20194. Jobs in lower-paid sectors are particularly impacted, and interest from non-EU workers is not making up for the decline.
Adapting to the post-pandemic, post-Brexit labour market
Employers fishing for staff in a depleted talent pool need to adapt. The most agile will look at their own needs but also study what workers want, and then reimagine their operation accordingly.
The logistics industry is an interesting example. The boom in online shopping under lockdown led demand for staff to soar just as the contingent of European workers shrank.
Many forward-thinking employers have found flexibility to be key, both when attracting staff last year and now as they try to retain them as other sectors of the economy unlock.
This doesn’t just mean offering flexible hours to permanent employees, but also switching to fully flexible, temporary workers to help them manage peaks and troughs of workload.
Temporary staff can be ‘dialled up’ and ‘dialled down’ according to demand, and their flexibility means there’s no requirement to keep using them during quieter periods.
Having ready access to good temporary staff also gives businesses a bulwark against staff absences. A big pool of trained, vetted – and above all available – workers can save the day at short notice if regular staff call in sick.
The events of the past year have also boosted the supply of people looking for temporary work. We’re seeing increasing numbers of workers registering with Indeed Flex as a post-lockdown lifestyle choice; many find that temping gives them a variety and a work-life balance that a permanent job cannot.
Wage rises alone not enough
Whether European workers are staying away because of Brexit or Covid is moot. But what’s clear is that businesses must do more than just raise wages to attract the staff they need.
Employers need to look outside their usual hiring routines, considering different types of workers and different ways of working. Rather than hiring one permanent member of staff, they may work with four different people who take on different shifts.
The combination of Brexit and the pandemic has changed what many workers – and employers – want from each other.
Employers who adjust their hiring practices to appeal more to UK workers will fill the gaps left by departing EU staff better than others, and will step into the post-pandemic era on the front foot.