RPT: ANALYSIS - UK Skilled Labor Shortage On Rise Since Brexit Vote Amid Uncertainty, EU Workers Exodus

LONDON (Pakistan Point News / Sputnik - 24th August, 2018) The UK deficit of highly-qualified workers has grown considerably since the 2016 Brexit referendum amid the related economic uncertainty and fall in net EU migration, however, half of representatives of business community still remain hopeful that the exit from the bloc with subsequent reduced red tape could result in fresh economic boost, experts told Sputnik.

On August 13, the Chartered Institute of Personnel and Development (CIPD) said in its report that despite the fact that the United Kingdom as a whole was experiencing "continuing high employment," the country's businesses were suffering a "supply shock." The lack of skilled workers from the European Union was mentioned as one of the major factors.

CAUTIOUS RECRUITMENT PLANS AMID UNCERTAINTY

According to the Association of Professional Staffing Companies (APSCo), the negative trend is linked to the broader uncertainty created by the Brexit referendum, which led to labour shortages but also made the so-called white-collar sectors more cautious in their recruitment plans.

"Recent research by the Association of Professional Staffing Companies has found that over half of its members which recruit talent into white collar sectors such as IT, engineering and financial services have seen their clients become more cautious about hiring amid Brexit uncertainty, with a similar number finding that skills shortages have intensified significantly since the referendum," APSCo CEO Ann Swain told Sputnik.

The APSCo findings also showed that almost 40 percent of these sectors representatives pointed to the decreasing number of EU candidates as the factor behind labor shortage. The situation, however, may be also driven by fears of economic downturn, which are shared by nearly 80 percent of respondents.

"More than a third report that time to hire has increased since the referendum result was announced and 39 percent of respondents have seen a decrease in EU-based candidates on their books. When quizzed on risks to business post-Brexit, 75 percent of professional recruiters reported that they expect to see access to talent decrease. Perhaps unexpectedly, 79 percent believe it is likely that we will see an economic downturn, while over half foresee clients hiring less permanent staff after Britain leaves the EU," Swain added.

Findings elsewhere indicate that the Brexit process is having a negative impact on the UK workforce. Statistics released as far back as January from the British Chamber of Commerce (BCC) indicate that the situation was approaching "critical levels" as key sectors struggled to find appropriately qualified candidates.

The figures, issued by the Office for National Statistics (ONS) on Thursday, showed that the net EU migration to the United Kingdom, or the difference between people coming into a country and those leaving, fell in the year ending March 2018 to its lowest figure since 2012, from +189,000 to +87,000.

The net migration of non-EU nationals, however, is estimated at 235,000, the highest since 2004.

The apparent decline in EU workers seeking employment in the United Kingdom is believed to be particularly prevalent in skilled occupations.

"What we're seeing is [shortages] of those in entry level five [professions] which is the one below graduate level, so it's the doctors, it's the teachers, the engineers and the accountants, those kinds of people," Gerwyn Davies, a CIPD public policy adviser, told Sputnik.

The labor shortages are being most noticeable in the south and east of the country, according to the expert.

"The most vacancies are more prevalent in the south east of England and the east of England [although] London seems exempt from that and one of the explanations for that is that, while the demand is strong in London, it's still getting more supplies of workers compared to the southeast and east of England, so that's the main explanation," Davies noted.

Previous CIPD data paints a similarly worrying picture, with the research published last week indicating that, along with "continuing high employment," much of the United Kingdom is also facing "stagnating pay expectations and shrinking labor supply."

HOPES FOR POST-BREXIT ECONOMIC BOOST

Although slowing productivity and wage growth are expected to remain an issue, the Centre for London (CFL) think tank believes that there are reasons for some optimism. London, for instance, appears to hold fast in an otherwise uncertain economic climate amid growth in jobs in creative sectors and civil service.

"Job numbers are going up and unemployment is going right down to very low levels. Some of the growth we've seen over the past years have been the creative sectors which have been doing quite well, with growth also in jobs in the civil service, which are often specifically London-based jobs so that's significant as well," Richard Brown, a research director at the CFL, told Sputnik.

So, the dismal forecasts of "mass disappearance of jobs" have so far proven to be wrong.

"It's hard to say precisely why that is, but neither London nor the UK are growing fast in terms of job numbers compared to 2012 to 2014 when we were coming out of recession, essentially, but they are growing. There isn't a mass disappearance of jobs as some people forecast in the context of Brexit, suggesting that companies are holding tight and waiting to see, which would suggest there is some residual optimism," Brown concluded.

Meanwhile, certain sectors are also cautiously hopeful as to a potential turnaround following the country's full exit from the European Union, citing an end to "unhelpful" EU regulations as a possible stimulus to growth.

"While the possible threats associated with Brexit have clearly been noted, members are also cautiously optimistic about the opportunities that our withdrawal from the Union will offer the recruitment profession. Almost half of those surveyed are confident that Brexit will boost their business by allowing for the reform of �unhelpful EU-based legislation. One in three, meanwhile, are looking forward to less red tape. Three quarters of APSCo members believe that Brexit will create an increase in demand for flexible contract and interim talent - which I dare say many are building into future business strategies," Swain of the APSCo said.

Since the Brexit vote, the United Kingdoms political and economic communities have been split in the forecasts on whether the countrys exit from the union would mean a cliff edge for businesses or in contrast provide new opportunities and reduce EU-related red tape.