It’s the question on everyone’s mind – or at least, it’s the question that everyone is sick of talking about every five minutes. Just what exactly is going to happen with Brexit?
There are literally endless amounts of warnings about what could happen in any given Brexit scenario. Before we’ve even left the EU, the uncertainty around what will actually happen has already reared its head, dropping the value of the pound, reducing EU net migration to their lowest levels in decades, and reportedly slowing the country’s GDP growth. As almost every aspect of political life is gripped by an uncertain Brexit future, things seem bleak.
Yet in the recruitment market, there is one big reason to remain optimistic for the future. Economic growth across the country might be going at the pace of a drunken snail, but the recruitment sector is zooming along nicely at a pretty nifty 11% year-on-year. Would things be going faster if Brexit wasn’t on the cards? Maybe, but short of jumping into an alternative reality where Nigel Farage doesn’t exist and the referendum never happened, we’ll never know. Even so, things are looking cheerful within our market – regardless of Brexit.
So that’s it? Case closed. We’re all going to be fine.
Well, not exactly. The fog of Brexit uncertainty might not be enough to significantly slow down the explosive growth of the recruitment sector, but it’s easy to forget that Brexit hasn’t actually happened yet. Predicting what will happen to the recruitment market after Brexit is difficult, purely because we still have no idea exactly how Brexit is going to happen – or even if it will still happen.
So assuming Brexit actually goes ahead, will it put a spanner in the works of the Recruitment market and its continued success? The short answer is we don’t know. The long answer is… we don’t know, but there are certain things we can point to that will give us an indication of what will happen.
The end of Freedom of Movement
Details on how Brexit is going to happen remain scant. There are however a few things we are almost certain will occur should some form of Brexit manage to push itself through parliament. Theresa May’s deal brings an end to Freedom of movement across the EU, as would a no-deal Brexit. So short of a remaining in the single market (which is unlikely), we know that visas are going to be required for recruiters brining in talent from across the English Channel.
For recruitment markets that rely heavily on our own internal market, this isn’t much of an issue, but there are key recruiting sectors that need workers from the EU to plug some pretty huge skill gaps. Take Engineering as an example – a recruitment market that is heavily candidate-based due to a shortage of skills within the UK market. With Freedom of Movement, this issue is solved thanks to our ability to easily bring skilled workers from across Europe. Once that ends, how do we plug the gap? Engineering recruiters can still import workers from Europe (and other parts of the world), yet this process will become vastly more complicated and time-consuming as working visas become a necessity.
While the government has assured that the visa cap will be dropped as a result of Brexit, obstacles will exist where they didn’t before. In the long term, we could solve this issue by pushing students towards more engineering-focused training, but filling the skills gap this way is a process that could take years. In the short- and medium-term future, things will be difficult for markets that rely so much on European workers.
Economic slow-down cuts spending
Whether you believe the forecasts or not (and you probably should), most experts are predicting that any form of Brexit will result in economic slowdown. In the absolute worst economic case, a no-deal Brexit could bring about another recession.
The last big recession was not exactly great for the job market, and while a market crash as catastrophic as the one that hit us during the 2008 financial meltdown is incredibly unlikely, any recession is sure to force clients to cut spending as quickly as possible.
What’s the first thing a company cuts back on when spending must be reduced? Out-of-house agency work.
At the moment this isn’t much of an issue. Even during the current uncertainty of the market, clients looking to hire more talent from outside agencies are on the rise. This is good news for now but as things change and our image of Brexit becomes clearer, this might not last.
For recruitment agencies with a diverse set of clients from a variety of markets, this could be less of an issue, but for recruiters embedded in a single key market that looks likely to experience a dramatic slowdown during a no-deal Brexit (sorry, automotive recruiters!) things could take a turn for the worse.
Looking to the future
Luckily all this uncertainty does give one advantage to companies looking to stay vigilant. While Brexit continues to slowly roll itself across everything political, businesses are given time to prepare for a worst-case scenario. If you feel like reading the (literally) hundreds of pages the government has published to prepare businesses for a no-deal Brexit, you can. It will take an age, but it’s possible.
Short of spending a large portion of your life reading through government advice on Brexit, you can remain hopeful that the recruitment market is outpacing the country’s economic growth by a significant margin and is likely to continue doing so for the foreseeable future. However, when (or if) Brexit does eventually happen, things could take a turn. It’s always better to remain prepared for this possibility than to get caught out.