July 4th, 2016 | Sterling

How Will Brexit Impact the World of Recruiting?

The historic decision to leave the EU has ushered in a period of great uncertainty amongst British businesses. Yet while the political landscape may have changed dramatically over the past few days, can the same be said for recruitment?

First, it’s important to remember that Brexit will not happen immediately, so any significant reforms are extremely unlikely in the short term. Most employers can therefore use this time to reflect on the situation and consider what it means for them.

That being said, many are still understandably concerned about what impact Brexit will have on their ability to recruit the right people with the right skills, both now and in the future.

According to a report by NGA Human Resources, Brexit is more likely to restrict the number of low-skilled workers coming to the UK and instead attract more high-skilled workers. This would obviously be challenging for sectors relying heavily on low-skilled labour, such as agriculture and construction, so these employers may need to start exploring alternative sources of labour now, as well as ensure they avoid non-compliance and perform the required pre-employment checks.

“Employment law, immigration and the ability of employers to bring the right skills they need into their business were key themes focused on in the campaign that will potentially be subject to change going forwards, and these things will no doubt be on employers’ minds,” said Peter Cheese, chief executive of the Chartered Institute for Professional Development CIPD, adding that any reform of the immigration system must enable employers to hire both skilled and unskilled foreign-born workers, to help “support business growth.”.

The contingent workforce

While some employers might decide not to risk recruiting permanent staff in the short term, we may see many opting to hire contractors and temporary staff instead, until the post-Brexit landscape is a little clearer.

“It is during this time of uncertainty that contractors will benefit from businesses hiring contingent workers in order that they can manage risk,” remarks ContractorCalculator CEO Dave Chaplin.

If this is something you are considering, it’s essential you apply the same rigour to background screening your contingent workforce as you do your full-time permanent staff. Our latest Background Screening Trends report found that only half of firms perform checks on contractors, yet they could still have the same access to your assets, customers and clients, so it’s important to remain diligent.

Possible reforms to employment law

The vote to leave the EU means we can expect some reforms to current employment legislation. Writing in HR Grapevine, Enrique Garcia, a consultant at employment law firm ELAS, said one of the key areas likely to change is Agency Worker’s Regulations, which he says could be fully repealed as it is “universally unpopular” and has been “heavily criticised.”. Another reform could be the Right to Work, as leaving the EU places a question mark over EU citizens working in the UK, as well as UK national working in Europe. Garcia thinks it’s likely that the UK “would negotiate separate trade agreements allowing both UK and EU nationals to work flexibly.”.

Positive opportunities

While the negative repercussions of Brexit have been widely reported over the last week, some experts do view the vote to leave as a positive opportunity for recruitment.

Adrian Marlowe, chairman of the Association of Recruitment Consultancies, argued that the change engendered by the Referendum provides more opportunity to press for a flexible employment model in the UK that supports all.

“The entrepreneurial spirit that is embraced by the recruitment sector, one of the UK’s flagship industries, should be allowed to flourish. We call for a positive model and reform that provides for real choice, so attracting foreign investment at the same time as improving efficiencies in the UK.”

Green was also optimistic about the possible long-term impact of Brexit on recruitment: “We hope that the Referendum result leads to a step-change in the way we prepare current and future jobseekers in the UK, so that new entrants to the jobs market are better equipped with the skills and attitude that employers need. Employers, educators and government must seize the initiative and create a pipeline of talent so that individuals and businesses continue to thrive in the post-EU era.”

Despite the uncertainty of the last few days, it’s worth remembering that new circumstances often bring new opportunities. Plus, nothing will change overnight so the overriding message for employers here is to keep calm and carry on. More importantly, use this time to ensure you have the right skills in place to enable your business to weather the storm.

“Now is not the time for hasty decisions or knee-jerk reactions from government or employers,” advises Cheese. “Evidence suggests that the UK’s flexible labour market already strikes the right balance between providing flexibility for employers and employment rights for workers. We would urge the government to bear that in mind when approaching any renegotiation of our relationship with the EU or considering any changes to UK law.”

The CIPD has put together this handy guide which offers practical advice on what the EU Referendum result means for employers and HR professionals.

In addition, you can learn more about how Brexit could affect your background screening program in our five-minute express webinar here.

Express Webinar: Brexit and Background Screening: What next?

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.