Sectors employing a high number of EU nationals are starting to feel the pinch as uncertainty lingers over future prospects.
According to the CIPD and Adecco’s Labour Market Outlook, while the short-term outlook for employment remains strong, skills and labour shortages are starting to become evident in sectors employing a raft of EU nationals.
Despite a near record number of vacancies – 748,000 according to the latest ONS data, UK employers are finding it tough to fill roles with the right people, due to both labour and skills shortages.
ONS data from January shows that low-skilled sectors typically employing a large number of non-UK nationals from the EU are facing recruitment challenges, with vacancies in retail and wholesale, manufacturing, health and accommodation and food services making up almost half of all vacancies.
The CIPD and Adecco’s survey of more than 1,000 employers found the most common response to labour shortages has been to leave positions empty, reflecting the “tightness of the domestic labour market” and initial signs the UK is attracting and retaining fewer EU nationals.
The research also said over a quarter of employers had seen evidence to suggest non-UK nationals from the EU were considering leaving their organisation, and even the UK, in 2017.
Last week, attempts to force the government to give all EU citizens in the UK permanent residency after Brexit, were defeated. The protections were proposed in amendments to the Article 50 Bill in the House of Commons on Wednesday, but were defeated.
Gerwyn Davies, labour market adviser for the CIPD, said:
The most recent official data suggests that there has been a significant slowdown in the number of non-UK nationals from the European Union in work in the UK.
This is creating significant recruitment challenges in sectors that have historically relied on non-UK labour to fill roles and who are particularly vulnerable to the prospect of future changes to EU immigration policy.
With skills and labour shortages set to continue, there’s a risk that many vacancies will be left unfulfilled which could act as a brake on output growth in the UK in the years ahead.
Employers with EU nationals working for them were also asked how they would respond to possible migration restrictions. A quarter said they would pay the difference and absorb the extra cost of recruiting these individuals, while just under a fifth said they would look to retain older workers and 16 per cent said they would hunt for UK-born graduates.