A Brexit storm has already hit and employers are paying
Last Sunday marked the third anniversary of Britain’s vote to leave the EU, to which it still belongs.
No one yet knows exactly when or how the UK will depart. We do know that Boris Johnson, the favourite to succeed Theresa May as Britain’s prime minister, insists he will take the UK out on October 31, the latest Brexit deadline, come what may. We also know that both Mr Johnson and his rival, Jeremy Hunt, want to change the country’s immigration policy.
For British employers this poses an array of worries, including one that some already say is troubling: luring skilled workers from Europe.
Brexit erupted against the backdrop of a tightening labour market in the UK, where the unemployment rate hit 3.8 per cent this year, the lowest level since 1974. In the three months to May, there were an estimated 837,000 job vacancies, 12,000 fewer than in the previous quarter but still 11,000 more than a year earlier.
Official figures show long-term immigration to the UK for work has fallen since 2016, the year of the Brexit vote, mainly because of a decline in EU arrivals. For a deeper insight into the nature of that decline, it helps to look at LinkedIn, the jobs website that 630m mostly white-collar employees around the world use to show off their CVs and hunt for work.
Analysis of its members’ job views shows the UK has long been the most attractive country in the bloc for EU professionals. That remains the case but last week, when I asked LinkedIn for its latest data on the UK’s proportion of cross-border EU job views, it came back with some sobering figures. They showed a noticeable drop in the UK’s share of EU job searches since the Brexit vote, from 34.3 per cent in the first quarter of 2016 down to 24.7 per cent today.
That is still a lot higher than the next two most appealing countries, Germany (13.6 per cent) and the Netherlands (10.6 per cent). After that come Spain and France, which both score below 10 per cent. But the findings are in line with other data from the website showing professional migration to the UK from other EU countries fell by 30 per cent between the first quarters of 2016 and 2019.
These figures add weight to fears of a so-called “skills drought” that some experts say is driving businesses to offer more lavish pay and perks to employees. A survey last year for the Migrate UK specialist immigration law firm claimed some British businesses were paying up to £100,000 extra to lure or retain EU workers nervous about Brexit Britain. Higher salaries, bigger bonuses, extra holidays and new company car schemes were among the benefits being offered.
That matches the results of more recent polling that the Coleman Parkes research firm carried out for LinkedIn. Asked about the impact of Brexit over the past 12 months, 65 per cent of the recruiters and human resources people polled said they had never found it so hard to find and hire qualified employees.
More than half said they were raising salary offers to recruit the right people inside the UK and 49 per cent said they were boosting benefits such as pension contributions. Just over 40 per cent said they were offering more flexible working conditions.
This is excellent news if you work in a skills-short sector. The flipside is the same research suggests British businesses are hiring people to plug pressing, immediate gaps, not for long-term ventures or investments that Brexit uncertainty might be discouraging.
So what might happen if the UK crashes out of the EU without a deal on October 31? No one knows for sure. But LinkedIn does have interesting figures from the US that show the effect of sudden shocks of a different nature: huge storms.
After hurricanes hit Houston and Miami in 2017, LinkedIn’s figures show there was, not too surprisingly, a sharp drop in hiring rates. The data suggests it takes about two months for hiring levels to recover after such a disaster.
No one is suggesting a no-deal Brexit would strike Britain with the force of a hurricane. But at least you know roughly what you are getting with a big storm, including when it finally ends. With Brexit, sadly, we are a long way from knowing even that.