Recruitment & The EU Referendum

Brexit & Recruitment: How the EU Referendum is breeding uncertainty on both sides


In what’s being billed as the most important vote of our generation, arguments on both sides of the EU coin are being hotly debated and contested. The only factor that’s absolutely certain in all of this, is how much uncertainty there is. Whatever your stance on the EU, you can’t argue with the fact that no one knows for sure what the UK labour market will look like after the referendum has taken place. Amongst all the uncertainty, what we do know is that the outcome of this referendum will have an impact on the future of recruiting and HR. The question we can ask at this point, is what will the effects on the hiring business be after today’s vote?

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What impact does the EU currently have on recruitment & HR?

Having been a part of the European Union since 1973, Britain has been afforded the luxury of freedom of movement throughout the EU. This has allowed skilled workers from across the EU to bring their knowledge to the labour market here, and vice versa, allowed British workers to take their skills abroad. Members of the ‘stay’ camp claim that IT, construction and engineering would be the worst hit industries should an ‘out’ vote be cast, due to the high degree of EU workers. Furthermore, as the competition for the best indigenous employees would increase from a cap on skilled migration, rising wages to land these candidates would impact business revenues across a variety of sectors.


As well as freedom of movement, being within the EU subjects Britain to a number of employment specific EU laws. Most notably, laws regarding contract workers, such as the WTA (Working Time Directive) and AWD (Agency Workers Directive). These laws provide agency and contract workers with the same rights of permanent employees after 12 weeks of employment. But these laws are considered costly and inflexible by some UK businesses.


A figure being repeatedly used by ‘leave’ campaigners is the apparent £350m weekly taxpayer cost of EU membership. A Financial Times article breaking down the claims to facts argues the figure is closer £130m; a third of which is reinvested back into Britain’s economy as a result of Margaret Thatchers budget rebate negotiation in 1984. Whatever the real figure is, this is all cash surplus that could be invested into creating jobs and upskilling a British workforce. Although this cost would be gone should we leave the EU, the public finance costs of a shock to the economy post Brexit would dwarf this figure.


How could a British Exit from the EU affect recruiting?

Highlighted by members of the ‘leave’ camp is the potential for Britain to negotiate favourable trade terms with the EU despite no longer being a part of it. Described as the ‘Norway option’ this would be a scenario where Britain joins the ‘European Economic Area’, which could mean continued freedom of movement for people, goods and services. Although this could be an option, it would depend on the government’s ability to successfully negotiate this deal. Potentially, a failed negotiation and limitations on freedom of movement would impact businesses ability to recruit talent from across the EU and bring these skilled workers to Britain. Some notable firms, such as Goldman Sachs, have already expressed their plans to change how they operate in a post Brexit Britain. Firms of this size reducing their recruitment would significantly impact UK stock markets.


EU employment law is a hot Brexit topic for recruiting. A reduction on EU employment law certainly looks less restrictive on the face of it. But in reality, EU trade pressure would probably mean that employment laws remain the same, as to not give Britain an unfair competitive advantage against continental counterparts. Successful



What do we know for sure?

Unfortunately, not a lot. The propaganda approach to educating the public on these issues has left a lot of people uncertain of what to vote. For recruiting businesses, what we can predict with some degree of certainty, is that the ability to recruit internationally will at least change, if not be more difficult. And for recruiters, changes to migration policies may reduce the availability of skilled workers, and as the demand for skills increases, the already competitive playing field could well become more challenging. On the other hand, we could be left with a more skilled and educated pool of young talent further down the line, as money sent to the EU could be invested back into upskilling the next generation of British workers.


Whilst it’s difficult to provide a perfectly balanced piece for either side, I hope this can at least stimulate some debate surrounding the recruitment in a post Brexit UK. What everyone can without doubt agree on, is that the real challenge is to find the facts and come to our own conclusions; uncertainty from both sides is becoming the focal topic of this referendum.