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How will Brexit impact recruitment?

As Brexit resurfaces in the news, we look at how it will impact recruitment practices, from the government's proposed new points-based immigration system for EU and non-EU nationals to attracting and developing talent. 

Points-based immigration  

As things stand, free movement of people between the UK and the rest of the EU will end on 31 December 2020. Individuals who are resident in the UK on or before then based on EU free movement rules can apply to the EU Settlement Scheme if they wish to continue to lawfully live and work in the UK. Employers would be wise to carry out staff audits to identify who may be impacted.

From 1 January 2021, a new immigration system will apply that will cover both EU and non-EU nationals – meaning EU nationals arriving in the UK after this date will need a visa to live and work in the UK. Those who have been granted status under the Settlement Scheme will continue to be governed by the rules of that scheme.

Under the proposed new points-based immigration system for both EU and non-EU nationals, some eligibility criteria will be mandatory but other characteristics would be tradeable so that an applicant could offset certain strengths against certain weaknesses to meet the overall points threshold. As part of these proposals, the controversial ‘resident labour market’ test would be abolished – meaning that mandatory advertising to the resident UK workforce would no longer be legally required. 

Sponsorship 

The need for a sponsor job offer will add time and as yet unspecified expense to existing recruitment processes. However, there are a number of aspects under the proposed new scheme that would actually make sponsorship of non-EU/EEA/Swiss nationals easier. 

The abolition of the ‘resident labour market’ test would allow for broader and more innovative advertising, rather than the current prescribed locations and format. The minimum skill level of sponsored workers will also drop, as will the general minimum salary threshold, increasing the pool of non-EU workers that can theoretically be sponsored. The government has also proposed to remove the cap on the number of visas that can be issued under the current system.

There is an important exception to the rule, in that a proposed ‘global talent’ visa category will allow “the most highly skilled” workers without a job offer – primarily with a background in STEM subjects – to come to the UK. Other non-sponsorship routes are also being considered.

Competing for UK-based talent  

The proposed changes to the immigration system have the potential to make already competitive recruitment processes that much harder for individuals – especially for senior posts. Employers may have to rethink the way they attract talent in order to stand out from the crowd. 

Given the current economic situation and anticipated downturn, employers would be wise to focus on what they can offer prospective employees other than pure salary – especially as salaries could decrease in relative terms. Many employees will gauge employers by the benefits they offer. 

Employers who promote work-life balance through flexible working for example are likely to be attractive to job seekers, especially following the change in working patterns for many people as a result of Covid-19. Similarly, being able to evidence a positive culture that makes employees feel valued and supported is likely to have a significant impact on employee retention levels. 

Developing existing talent  

The new immigration system will arguably make it easier for employers to employ non-UK nationals in more senior or highly skilled roles. As such, employers will likely be more concerned with how they fill perceived staffing gaps for so-called low skilled roles. 

The government has urged employers to develop their own UK-based staff and look to the “economically inactive” to fill the gaps created once their access to low-skilled EU labour is cut off. Employers could consider if their current recruitment processes act as a barrier to talent and look to widen their existing recruitment criteria and target demographics if this is the case. Many employers have already recognised that there are untapped resources out there, for example women who have left work to raise children and who may now be looking to return to a work environment. 

Low skilled or entry level roles that do not require particular skills could be used as training and development opportunities to improve staff retention. Likewise, apprenticeship schemes or graduate programmes could benefit younger workers who can learn the skills they need on the job. 

While additional investment in training will incur further cost, this may be more palatable than the costly and often time consuming process of recruiting skilled workers from overseas.  

Future trends 

In the longer term, automating certain jobs or roles, such as repetitive manufacturing processes may help employers to deal with challenging recruitment conditions and increase productivity. However, it should be approached on a case by case basis, as certain roles will not be suitable for machines alone and will always require an element of human involvement.

The current economic downturn is likely to mean less people are looking to move jobs, but employers should work to better understand what drives their existing workforce and how to keep them engaged. Salary is not always the determining factor – management, targets, workload and culture may be just as important. Employee surveys and informal feedback opportunities are relatively low cost, low effort ways of facilitating this and signposting where employers could do better in managing staff turnover.

Right to work checks are an obvious but often overlooked consideration. UK employers are required to conduct right to work checks on all prospective employees. They must retain clear records of workers' rights to work in the UK in either prescribed electronic form or hard copy, for the duration of the employment and for a period of two years afterwards. The way EU/EEA/Swiss nationals prove their right to work in the UK will undoubtedly change when the new immigration system is implemented in 2021, and new guidance on right to work checks is expected before then. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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