As we inch closer to a no deal Brexit, understandably concerns are increasing about the effect that this may have on the jobs market in Scotland. Looking beyond the headlines, scaremongering and media speculation I have done a bit of fact finding to try to clarify the situation for current job seekers.
I did say try! Unfortunately, no-one really knows what is going to happen. The economic impacts of Brexit are incredibly complicated and even at this late stage, the experts can only give us their best guess at what might happen. There is a consensus, however, that there is going to be a negative impact on the jobs market. Very simply put, it is predicted that:
- Jobs may be lost due to increased trading costs, a reduction in trade and a drop in consumer confidence
- The jobs market will become more static due to candidate uncertainty and a lack of confidence to move
- There will be difficulty in attracting staff at all skills levels due to Brexit uncertainties and the UK becoming less attractive as a place to live and work
As yet, we do not know how badly the UK economy will be affected. That will depend on what deal, if any, is struck with the EU on 29th March. However, job seekers are already concerned. The Totaljobs Employment Index (TEI) report, July 2018 reports that:
- 44% of all candidates believe there will be more competition for jobs following the EU referendum
- 28% say that Brexit has already had an impact on their job search
- 34% are worried about their job security as a result of Brexit
Without an agreed Brexit plan and limited guidance from the current government it is up to companies to ensure that they are Brexit ready. What that means for business will very much depend on industry, trading partners and export strategies but there will be an impact for companies even without direct trade links. Every sector is likely to be impacted due to increased costs and a projected fall in demand for either products or services. A weaker economy and a drop in consumer confidence is expected.
Economic modelling based on 2% reduction in economy suggests that London and the SE will be particularly hard hit. Whilst the effects will be felt to a lesser extent throughout the rest of the UK, a 0.5% shortfall is indicated in Scotland. There are 130,000 jobs closely related to EU trade in Scotland. 40,000 of these are in the Glasgow area alone so a large number of Scottish jobs might be affected, although to what extent is unclear.
However, in Scotland the rate of unemployment is lower than the rest of the UK and the number of workers in employment has risen by 59,000 over the last year. 80% of this was for workers in full time employment. It’s not all bad news. It is thought that the reduction in value of the pound will boost some manufacturing jobs and jobs will also be created within the tourism sector as an increase in visitors from overseas take advantage of the UK being a more cost-effective holiday destination. Protecting service sector jobs is less certain, however.
Impact on the recruitment process
Feedback from HR teams suggest that recruitment budgets may shrink leading to less jobs and more caution over hiring. Although some companies may require significant additional resource to deal with Brexit planning and implementation, there will also be an emphasis on upskilling and developing the existing workforce and only recruiting with a longer-term plan in mind.
Again, it’s not all bad news for job seekers. Nine out of ten recruiters say that hiring strategies have been hit by the Brexit process. The UK is now less attractive to applicants from the EU and from other parts of the world. 100,000 EU citizens left the UK in the three months after the Brexit vote and the lack of EU workers is now impacting on employers’ ability to fill positions at all levels. There was an 11% reduction in applications from the EU since 2016 according to Monster and a recent LinkedIn survey has shown that HR professionals and recruiters report the search for talent has been impacted negatively since the 2016 vote to leave the EU. Uncertainty over the job market is also encouraging highly skilled workers to stay where they are rather than risk a move. Recruiters report that this impact is being felt most in the healthcare sector, followed by manufacturing, construction and education.
The Brexit vote has arguably had an even greater impact on low level recruitment already and, particularly, for seasonal workers employed within agriculture, tourism, hospitality and the care sector. 85,000 mainly Eastern European workers take on seasonal agriculture jobs in the UK each year alone and many farmers reported greater difficulties in attracting the staff required in 2018. It remains to be seen whether the shortfall can be filled by either UK workers or a new wave of EU migrants but predictions are not hopeful.
So what can we do?
It’s a mixed picture and it looks like it will remain unclear until well beyond 29th March. My advice to job seekers would be not to be too down-heartened. Both opportunities and challenges will arise in the coming months. Keeping informed is going to be key. Ensure that you are aware of the implications and impacts of Brexit on your specific industry sector. You may well be asked about it at interview. Research prospective companies and their preparations for Brexit in detail before committing to an application to ensure that you are confident in your decision to move. Network as much as possible to keep track of positions that may not be advertised in an uncertain and static jobs market and make sure that you invest the time and effort into making any job applications as effective as they can be.
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