The vote by the UK’s majority to exit the European Union has left many speculating what a post-Brexit EU will look like for human resource managers. Employees, employers and policy makes alike are still uncertain as to what Brexit portends for the working life and the economy. As the UK marches into these unfamiliar grounds, there are several postulates as to what its fortunes could be like. This paper looks into what this could mean for the demand and supply of labor in the EU with a focus on the National Health Services (NHS) as a case study.
Impacts on labor supply
About 7% of the UKs workforce is composed of EU nationals (2.15 million). These are jobs that UK citizens cannot take up either because they lack the requisite skills and training or because of the low incomes they attract and poor working conditions (Marangozov 2016, p.115) Some of these may still work in a post Brexit UK (under the proposed Australian-style- points system) but most low and semi-skilled workers may not. Although EU nationals who are already partof the UK workforce are not likely to be repatriated, Hillage (2016) denotes that it’s possible that some EU workers may just feel unwanted and leave. This could give rise to a decline in the supply of labor for the NHS leaving human resource managers with the dilemma of solving the labor shortage complexity. Hillage (2011) also opines that the general feeling of the public could be against migrant labor making it difficult to attract skilled labor from overseas recruits this, further impacting negatively on the supply of labor.
According to Caroline Norbury (2013) of Creative England the fastest growing companies in the UK are already finding it hard to find creative talent. She fears that with Brexit-which could make it hard for creative talent from other continents to live and work in the UK- even those already in the country could opt to leave. This could cause a decline in the supply of such skill and labor thus forcing human resource managers to redesign the departmental operations within the NHS as per the labor demands.
The impacts of referendum result have already beginning to be felt in the UK. A fall in the supply of migrant labor is taking shape; thanks to the perception that they are no longer welcome in the UK after the vote (Grant 2017 p.32). A survey by the LaborMarket Outlook revealed that EU is having recruitment challenges with sectors such as manufacturing, retail and wholesale, accommodation health and food services being the worst hit accounting for 45% of all vacancies. Even more worrying is the fact that most employers have left these positions empty (Labor Market Outlook, 2016 p.67) and organizations such as the NHS are suffering from labor shortage. These point to signs that the UK is not attracting and retaining as many EU nationals as it did pre-Brexit. The report also found that 27% of employers have reasons to believe that non UK employees in their firms were contemplating leaving their organizations and/ or the UK altogether. If this is actualized it holds the potential of reducing the supply of labor in the UK.
Brexit portends a number of legal consequences for employers in the UK. Although EU has been criticized for excessivered tape it has observed laws that protect workers’ rights such as maternity and paternity leave and anti-discrimination laws. Although making significant changes to these laws is not a likely move for the government given their significance as a recruitment and retention tool according to Slattery (2015). Speculation is rife that it could repeal laws such as EU working Time and Agency Workers Directive. This affects the functionality of the human resource managers and makes the working conditions unattractive for EU workers who potentially could opt out resulting in a decline in labor supply for the UK.
One of the sectors that are likelyexperience the hardest pinch of Brexit is the nursing sector. Moore (2016) contends that as at 2016, Britain was still in need of more registered nurses. If the EU nurses leave the UK due to the anticipated changes in immigration policies the shortage is bound to deepen at a time when Britain cannot afford to lose any more EU nurses given the number of EU nurses was already on a decline before the Brexit vote and will drastically affect the operations of the NHS (Trueland, J. (2016). As the dust settles on the outcome of the referendum vote, the Royal council of Nursing must anticipate serious shortages in the nursing sector given the significant number of EU nurses working in the UK.
Pre-Brexit UK employers had a labor market as large as 350 million-effectively roping in a huge expertise to choose from. Undeniably, no non-EU countries can boast of this. After the referendum, employers in the UK now have to consider whether they will still be able to find the talents and skills they require competing in the global market (TazVaid, 2016 p 74). As digital integration continues to characterize global trade, an elevation in the requirements for digital expertise is inevitable. This is likely to see the UK witness a skills shortage similar to what was the case in Switzerland in 2015. This is arguably leading the UK into a season of low supply of labor.
Impact on demand for labor
With the looming absence of freedom of movement due to imminent changes in migration laws, a number of things could happen; the UK is likely to experience a skills shortage in areas that are currently heavily reliant on migrant labor. These include high skill sectors such as banking, finance health and education and low skill sectors such as agriculture and hospitality (Marangozov2017, p.78). Even so, a lot is going to depend on the skill mix of the sectors that will be affected. How easy or difficult it will be to replace these with domestic workforce is going to depend on how effectively immigration is managed (Meagre 2016).Whatever the case the indigenous workforce are not likely to fill these vacancies leading to a rise in the demand for skills and labor in the aforementioned sectors.
The UK has had a rich heritage thanks to the diversity availed by the EU. With this no longer in the picture, employers may seek to relocate their headquarters and operational bases outside the country where they can access the same creative diversity they have had for decades. This means the demand for labor will decline in the UK as these businesses shift base and seek employees from other areas- this causing a decline in the demand for labor in their former capitals.Although labor market response to the anticipation of Brexit has not been evidenced yet-unemployment rate remains at 4.9%-the prediction of employer nervousness which could result in a decline in hiring activity cannot be ruled out given the uncertainty around Brexit. According to Meagre (2016), it could negatively impact the demand of labor.
Conclusion
In a nutshell Brexit could have several ramifications on the supply and demand of labor in and outside the UK posing unique challenges to businesses that have relied on non-UK nationals. The sectors that are currently heavily dependent on EU workers like the Nursing sector is likely to experience a deeper shortage of professionals if the imminent changes in immigration laws are realized. Nevertheless, the extent to which Brexit alters the dynamics of supply and demand of labor in the UK and the EU is dependent on the exit model and how effectively it is managed.
References
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Moore, A. (2016). Brexit: WHAT NOW FOR NURSES?. Nursing Standard, 30(46), 19-21.
OUR VISION FOR BRITAIN AFTER THE BREXIT. (2016). Vital Speeches of the Day, 82(12), 378-381
Price, E. (2016). US financial services industry outlines Brexit concerns. International Financial Law Review, 1.
Switzer, T. (2017). Life AfterBrexit. Policy, 33(1), 26-32.
Trueland, J. (2016). After Brexit: nursing a divided UK. Nursing Standard, 31(3), 22-25.
