Brexit intensifies labor shortages as companies scramble to hire

Brexit intensifies labor shortages as companies scramble to hire

Brexit has exacerbated the UK’s labor shortage over the past year, with industries that rely most on freedom of movement severely affected, according to a report led by Oxford University academics.

The research found that in parts of the economy, such as hospitality and corporate support services, there was a large decline in the number of EU workers, a substantial increase in vacancies and few opportunities for employers to hire from non-EU countries. belonging to the EU.

The academics found no evidence that employers have responded by raising wages to attract UK-born workers to fill jobs previously held by people born in the bloc.

In a detailed study, the authors were careful not to put all the blame for labor shortages on Brexit, especially as there have been hiring difficulties in sectors such as travel in many countries recovering from the pandemic.

The early retirement of workers over the age of 50 has also caused major problems in the UK labor market unrelated to Brexit.

But labor shortages and vacancies were highest in sectors that relied most on EU workers before the pandemic, according to the report. Employers of these businesses were unable to use the new visa routes to find foreign workers, mainly because wages were low.

Sectors included hospitality and support roles such as warehouse and security staff.

In sectors such as health and agriculture, where employers had access to non-EU workers due to special visa schemes, there was a big shift from EU to non-EU migration, according to the report.

The data examined only covered the period up to June 2021, but working EU citizens decreased by 6% compared to the same month two years earlier, while working non-EU immigrants increased by 9%.

Madeleine Sumption, director of the Oxford University Migration Observatory and lead author of the report, said the figures showed that “ending free movement has made it harder for employers in low-wage industries to recruit.”

But he cautioned that the answer to this challenge was not necessarily to increase the number of visas available to less-skilled foreign-born workers.

“Low wage work visa schemes are notoriously difficult to police and often expose workers to exploitation and abuse. It’s also surprisingly difficult to measure shortages and determine how to target immigration policy toward them,” Sumption said.

Free movement did not suffer from these difficulties because workers were not tied to employers and had most of the same rights as UK citizens, but the apparent lack of control over migration was a major factor in the vote to leave the EU in 2016.

One of the report’s most surprising findings was that, contrary to predictions by Brexiteers, employers had not responded to shortages by raising wages.

“Early figures have shown no evidence that labor markets are tight. . . they have increased wage growth in low-wage jobs,” he said, noting that employers had mostly cut production.

The report concluded that the government may want to “wait” in the hope that labor shortages will eventually disappear as businesses and the economy adjust. That would avoid difficulties with the new visa schemes for low-skilled workers, but would come at the cost of “disrupting some businesses in the short and medium term.”

The Home Office said it had reduced the time it took for employers to recruit those eligible for visas from abroad.

“However, employers should look to the domestic labor market rather than relying on overseas labor by making investments in the UK through training, salary increases and career options,” he added.

Leave a Reply

Your email address will not be published.