Businesses predict triggering Article 50 will impact hiring and prompt EU workers to leave UK

Filed under Press release

Wednesday, 28 December 2016

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.”

ENDS

Notes to editors:

When the Government triggers article 50, this will start the formal process of the UK leaving the EU. Do you think triggering article 50 will make each of the following more or less likely?

Delays in business investment and hiring decisions in the UK

 

Total

  

More likely

42%

No impact

38%

Less likely

12%

Not applicable

8%

Employees from other EU countries leaving the UK

 

Total

  

More likely

44%

No impact

39%

Less likely

9%

Not applicable

8%

JobsOutlook is produced by the REC in partnership with ComRes. ComRes interviewed 602 employers and owners involved in hiring by telephone between September 1st and November 22nd 2016. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public / private sector split. ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at www.comresglobal.com

  • 30 per cent feel that economic conditions are improving, up from 27 per cent in the previous quarter.
  • 38 per cent expect hiring and investment to improve, up from 33 per cent who said the same last month.
  • Business confidence remains significantly lower than before the EU referendum: In the three months to June 45 per cent employers surveyed reported that UK economic conditions were improving.

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