The Recruitment & Employment Confederation (REC) has warned that triggering Article 50, the formal mechanism for leaving the European Union, may cause UK employers to delay hiring and investment decisions, as well as risking worsening skills shortages due to EU-nationals leaving jobs in the UK.
According to an REC survey of 201 employers conducted in November, 42 per cent of businesses believe that formally notifying the EU of the UK’s intention to withdraw will make delays in business investment and hiring decisions ‘more likely’. Twelve per cent of employers believe delays will become ‘less likely’, while 38 per cent said that triggering Article 50 will have ‘no impact’ on investment and hiring.
Employers were also asked about the impact that triggering Article 50 would have on EU workers in the UK. Forty-four per cent of respondents said that it will become ‘more likely’ that EU-nationals will leave the UK, against 9 per cent who said it would become ‘less likely’ and 39 per cent who said triggering Article 50 would have ‘no impact’.
Earlier this month, the REC’s regular JobsOutlook survey of 600 employers showed that business confidence has improved in the last three months, but remains significantly lower than before the EU referendum.
The survey also revealed that almost half of employers (48 per cent) expect to face a shortage of suitable candidates to fill jobs in 2017.
REC Chief Executive Kevin Green says:
“We saw the effects of business uncertainty immediately after the referendum, when hiring decisions were put on hold. Since then the jobs market has recovered and we’ve seen confidence begin to return to UK businesses, but it’s likely that we’ll hit another patch of turbulence when the EU negotiations begin in earnest.
“The prospect of EU workers leaving the UK at a time when employers are already facing severe skills shortages is particularly concerning because it’s a risk we cannot afford. We need EU workers in many sectors across the economy, from construction to hospitality to public services. The government must take steps to reassure EU nationals of their future in the UK.
“More broadly, the government needs to focus on shoring up business confidence by providing clarity about the changes employers should expect, particularly regarding immigration policy.”
Full press release on www.rec.uk.com