Brexit: how could it affect the jobs market?

Written by
Will Tear

15 Jun 2016

15 Jun 2016 • by Will Tear

The leave camp: could Brexit generate growth?

The Telegraph recently reported that over 300 top Business leaders backed Brexit, with a view to removing European Union red tape, supporting the creation of more jobs. Some of the people on this list included Peter Goldstein, a founder of Superdrug, Steve Dowdle, the former vice president Europe of technology firm Sony, David Sismey and Sir Patrick Sheehy, the former chairman of British American Tobacco.

The Economist also stated that Britain could do very well on its own. By not being part of the EU, Britain could abolish legislative red tape, like the Agency Worker Directive which gives temporary staff the same rights as permanent. This could be a huge benefit to businesses by reducing costs. In 2015, the Recruitment and Employment Confederation reported the market for temporary recruitment was worth about £28.5 billion. On any given day, it was reported that a consultant working within the temporary or contract market was trying to help 32 people find a new position. From a business perspective this removal of added red tape would allow for big cost savings for firms employing temporary workers.

Sam Bowman from the Adam Smith Institute also reported that the cost savings from not being part of the EU could be invested by the government in other areas, such as the NHS. This investment could create more jobs within the public sector stimulating further economic growth.

The stay camp: Brexit threat affecting job prospects

The investment firm, Hargreaves Lansdown reported a downturn in investment in the UK in the first four months of this year compared to last. The reasoning behind the reduction was put down to “uncertainty over EU membership” with the upcoming Brexit vote. This was further supported by a letter published in the Financial Times, with a number of top chief executives putting their name to the need for “one single market” with Europe. Names included Tom Enders (Airbus), Michael Bloomberg (Bloomberg) and Chuck Robbins (Cisco.) 
Ryannair chief, Michael O’Leary confirmed they would scale back on investment in to the UK if Britain was to leave the EU. He stated this could be lost to other competitive EU members if the UK does leave. 

This is supported by the Office of National Statistics which recently reported that although employment continued to rise in the first quarter of 2016, this has been at a much slower rate than last year. The Financial Times also reported advertised job vacancies had fallen by about 18,000. This again was attributed to the uncertainty around Brexit and what it could mean if Britain were to leave. 

UK heading for recession?

These are just some of the recent headlines, but based on this what would be the right decision?

Both sides have some strong points. But it is the air of uncertainty of what happens next if we do leave. How could this impact the global recruitment field? We are currently recruiting roles across Europe, so what are the implications? Will this limit potential investment in to the UK? Will firms move European offices out of the UK?

Based on this am I swaying to stay, it is not that I don’t see the case for leaving; but because no one can guarantee what is going to happen if we leave. Is it cowardly not to embrace the potential change? I would normally be pro, and of course, you can never guarantee what's round the corner but where we have just fought our way out of one recession, my concern is that this could be the catalyst to head straight in to another.