The rhetoric from EU leaders has been consistently stark; if the UK wants to stay in the single market the free movement of people is not up for negotiation. EU leaders are deeply concerned that if they make concessions for the UK, other Eurosceptic member states will demand their own limits on immigration. This would surely lead to the unravelling of the EU as we know it.
From the UK perspective, the ability to place controls on immigration was the single biggest reason for the Leave vote. It would be political suicide for the UK negotiators not to secure some limitations on immigration.
The upshot of these seemingly immoveable positions is that the UK is almost certainly going to have to come out of the single market (a so-called “Hard Brexit”) and curb EU immigration. Many employers have already reached this conclusion and are planning for the impact on their businesses.
But how reliant are we on foreign talent, as a whole? Well, it’s difficult to say, and the answer varies by sector and industry. However, just in terms of numbers, many businesses have significant proportions of EU labour which may need to be significantly reduced post-Brexit.
A survey of over 280 businesses conducted by HR recruitment consultancy, Macmillan Davies, showed that EU nationals (not including UK staff) comprised more than 20% of the overall workforce of respondents. In some cases it is much higher. Curbs on EU immigration are likely to place huge pressure on industries as diverse as construction and leisure to tech and financial services. I expect the UK skills shortage will become more acute as a result of Brexit.
To reduce the chances of losing a significant proportion of your EU workforce, businesses should encourage staff to formalise their immigration status immediately. This can mean staff obtaining a registration certificate, or applying for permanent residence or citizenship if they have been in the UK for 5 years. There are however, a number of pitfalls for the unwary in calculating this 5 year period. These include, for example, the requirement that any time spent as a student will only qualify if the individual had comprehensive medical insurance in place. Many employers are therefore taking an active role in educating and informing staff about their immigration rights.
The Macmillan Davies survey found that 33% of employers were concerned that EU staff working in the UK would be reluctant to undertake international assignments. This reflects the fact that undertaking a lengthy posting abroad could reset an EU migrant’s period of continuous residence in the UK and effectively prevent them from obtaining indefinite leave to remain in the UK.
The survey also showed that more than 30% of businesses were concerned that they would no longer be able to attract top talent from abroad as a result of a Brexit. According to Macmillan Davies’ Managing Director, Angela Franks, this concern is unsurprising. In Franks’ view “many EU nationals working in the UK are highly mobile and the uncertainty around free movement of people could make the UK a less attractive option”.
Sadly, it is also the case that the UK is now perceived as a less welcoming destination for EU workers, and I am anticipating a rise in the number of race discrimination complaints brought in the employment tribunal in the coming months and years.
In summary, employers that invest now in encouraging and supporting their EU staff to formalise their immigration status stand the best chance of retaining their skilled labour through the uncertain negotiations ahead, and beyond.