Brexit: Could Uncertainty Risk Jobs & Investment?
As the uncertainty of Brexit lingers on, the UK risks losing jobs and investment (warns Britains five biggest business lobby groups).
In a letter issued to Brexit Secretary David Davis, the groups state that “time is running out”.
The other lobby groups backing the letter are the British Chambers of Commerce, the Federation of Small Businesses, and the EEF manufacturers’ body.
Theresa May has suggested a transition period of about two years.
EU negotiators have agreed to start preliminary work on a future relationship. However, they still want more concessions on the UK’s so-called “divorce payment” before starting talks on trade and transition.
The five business bodies – which together represent firms employing millions of people – are calling for more urgency. With less than a year and a half left until the UK leaves the EU, this is vital.
Concern about the loss of UK jobs and investment was underlined last week when the head of Goldman Sachs, Lloyd Blankfein, tweeted that he will be “spending a lot more time” in Frankfurt.
All of this comes at the worst time for the UK. Unemployment fell again by 52,000 in the three months to August to 1.4 million. Therefore, the jobless rate remains unchanged at 4.3% from the previous quarter.
Mrs May is due to address the commons on the progress of Brexit negotiations later this week.
As arguments for and against Brexit are gaining pace ahead of the national EU Referendum on June 23rd 2016, consideration needs to be given to UK employers, the effect on them, and the knock on effect on UK Human Resources Departments and the Recruitment Industry. Whichever way the EU referendum goes, it will have consequences for UK employers.
Take a Look at History
A dominant swathe of those eligible to vote in the EU Referendum in June were not eligible voters back in 1973 when the UK entered the European Union. This has two-fold power. Firstly, this age group of voters are the current working generation, many responsible for business and with it recruitment and employment law and regulations. Secondly, these voters mostly won’t remember what Britain looked like on the outside of the EU looking in.
To understand the implications of Brexit and the EU Referendum now it is important to look at it within the social, political and economic political climate of the pre-EU days. In the heart of the Thatcher era, private business was king. With the entry in to the EU in 1973, the effects weren’t just apparent directly on the economy and trade, but also in a more subtle and slower way through the legal effect of EU treaties gradually making their way in to EU law.
Europe: The Issue for Employers, Human Resources and Recruitment Industries
The biggest implications of the EU on UK employers and therefore their Human Resources departments and the wider recruitment industry needs to be looked at within two key contexts: Employment Law and The Job Market.
Europe and Employment Law
Without a shadow of a doubt, the UK’s Employment Law landscape would look enormously different without the direct influence and implications of being part of the EU. The main Employment Law areas covered by EU legislation include:
- Working Time Regulations 1998 – whilst the UK negotiated various Opt-Outs and Exemptions, the UK is still largely subject to the weekly maximum hours, rest break and holiday entitlements, as dictated by the EU. One of the key reasons the UK negotiated the Opt-Outs and Exemptions was precisely because of UK business concern that such restrictions would hinder UK businesses, damage their profitability, and make working environments too restrictive. However, we were able to negotiate the Opt-Outs, and long-term our competitive edge hasn’t been affected.
- Equality Act 2010 – the EU is largely responsible for bringing the UK fully in line with the rest of the Western World when it comes to discrimination. The Equality Act protects individuals from discrimination on the grounds of sex, race, religion, belief, disability, age, sexual orientation and gender reassignment, marriage and civil partnerships. Without a shadow of a doubt, this Act has made the workplace one that is fairer, and brings in valuable talent previously overlooked due to discrimination.
- Agency Workers Regulations 2010 – these regulations give Agency workers in the UK the right to equal treatment as that of their permanent counterparts. This obviously has a knock on effect for Recruitment Agencies looking to fill temporary agency positions.
- Part Time Employees (Prevention of Less Favourable Treatment) Regulations 2000 – regulations to ensure that part-time employees’ employment rights are protected enabling UK businesses to benefit from more flexible working patters, especially making it possible to make the best possible business use of women returning to work after having children, bolstering the economy overall.
- Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 – similar to the Part Time Employees Regulations, these regulations brought in from the EU help to ensure the UK workplace is fair for all.
On top of the above laws and regulations, the reach of the EU is completely intertwined with UK Employment Law. Europe is responsible for bringing us Maternity Leave Rights (protecting both the individual and the employer) Parental Leave rights, further pay equality than the UK’s own previous laws, Data Protection, Redundancy Consultation, TUPE (Transfer of Private Undertakings), Health and Safety, and Human Rights. All these areas of law are governed by, or largely affected by, EU directive.
All the while the UK remains in the EU then UK business has a voice in the shaping of these regulations. A worrying scenario would be if the UK went down the Norwegian route and the UK was still governed and restricted by these laws, but without the power to influence them going forward. At present, UK business has a strong voice in the EU. Remove this and UK business could find itself hindered.
Europe and Jobs
The Office of National Statistics tells us that 942,000 Eastern Europeans, Romanians and Bulgarians work within the UK. However, these figures can’t be looked at in isolation. The UK plays host to a further 791,000 western European workers. But this figure still pales in comparison to the number of workers the UK has from outside of the EU – a whopping 2.93m, from places such as China and India. These figures need to be considered as a whole, and why the UK economy is currently reliant on non-UK workers.
Working in Human Resources or Recruitment yourself, you have likely been faced with skills shortages from within the UK market alone which you can more easily fill from abroad. This ability to recruit from beyond our own borders gives us economic power. Professor Adrian Favell, from the London School of Economics, says that limiting freedom of movement and employment would deter the brightest and the best that enter the UK from the EU.
Without this freedom of movement the UK employers may have to move to other lower cost, more competitive EU countries. The car manufacturing industry has already hinted at this possibly knock-on effect of leaving the EU. In a slightly different vein, UK farmers would struggle even further if EU subsidies were removed.
Europe for Recruiters: To Stay or Go
There are pros and cons for both camps. The reality is that even if we exited Europe, we aren’t operating in the political and economic climate of the 1970s. We’re now in the digital age, and it seems to remain competitive then we have to utilise Europe to the best of our advantage, whether that’s staying in or getting out. We’d love to hear your thoughts in the comments section below.
Why Your Voice Matters – Make It Count
You may be part of the passive generation when it comes to politics, but here’s an issue where your voice counts. The Government has released an Open Consultation that affects anyone in the Recruitment market: from employers, recruitment consultants to employees and candidates. If you’re in the labour market in any way shape or form then this one needs your voice.
Closed Recruitment Practices in the Public Sector – Open Consultation
The Open Consultation is entitled ‘Closed Recruitment Practices in the Public Sector’ and is geared up to find out the what, the why and the who of closed recruitment practices in the public sector. The Government are looking to find out why the Public Sector has traditionally differed so greatly from the private sector in this matter, and whether that’s a good thing, whether that needs to change, and if so why.
Some Definitions: Open & Closed
Closed Recruitment is simply what you think of as ‘in-house’. No external advertising or drawing candidates from any pool other than your own already existing employee base. Open Recruitment on the other hand spreads the net wider and actively markets the positions outside of the employers existing staff base. Open Recruitment considers any applications whether they come from inside or outside of the organisation.
So What’s the Purpose of the Open Consultation?
There are pros and cons to both Open and Closed Recruitment practices. The Closed Recruitment Practices in the Public Sector Open Consultation is looking to find out if the pros are equal to the cons and the wider implications on the labour market.
The Government are seeking evidence, they are on a fact-finding and opinion-seeking mission, to discover how common closed recruitment is in the Public Sector, including whether it is ever used appropriately, and whether any changes need to take place. Whoever you are, this Call for Evidence is seeking your voice. They are also seeking views on the role of Government in encouraging more open recruitment
Why Does It Matter?
Fundamentally the Public Sector has a greater responsibility to the labour market as a whole as it is the arm of Government. This extends to recruitment practices that demonstrate fair employment opportunities for all, as well as tax payer value for money.
So what are the Pros of Closed Recruitment for the Public Sector?
Closed Recruitment holds a long tradition in the Public Sector. Whilst the Private Sector will see the odd closed position where it’s guaranteed it’ll be an internal candidate taking the job, the vast majority of Private Sector Recruitment is open. However, the Public Sector has traditionally relied heavily on Closed, internal recruitment and there have been good reasons for that.
Closed Recruitment is vastly cheaper than Open Recruitment, or at least was in the pre-digital age. For Government departments and organisations highly aware of their budgets and taxpayers money this is a huge deciding factor. Why spend hundreds, possibly thousands sourcing and attracting candidates when you have ample supply already?
Closed Recruitment is generally much less time-consuming. You may even have in mind who’s up for the role and no need to even post it on the intra-web. Closed Recruitment generally works in a quickly cascading manner that sees vacancy to post-filled happen much faster than Open Recruitment with screening, interviewing, offers and notice periods can allow.
Additionally, many Public Sector organisations are more specialised than at first apparent. Knowing the system, the role and the organisation means that recruiters within the Public Sector may simply feel more confident that they will find exactly the right candidate, with the right aptitude, skills and expertise, from within their own.
So what are the Pros of Open Recruitment in the Public Sector?
The Private Sector has been aware of the huge benefits of Open Recruitment for decades. Gone are the days of rampant Nepotism and working your way up through the ranks, or waiting for dead man’s shoes.
Open Recruitment allows access to the widest pool of talent. You not only get to consider the ‘known faces’ already in the organisation but you get to throw the net wider and in so doing get to see a talent base that is much broader in scope than internal recruitment alone will provide.
Open Recruitment for the Public Sector in particular is important because it sends the right message to the population: employment matters. By opening up recruitment practices the playing field gets levelled and it simply enhances the opportunities for all who are looking for work. It removes the ‘Us and Them’ mentality of Private versus Public employees.
Importantly, particularly for Public Sector organisations in danger or doing same old, same old, Open Recruitment means new blood, fresh ideas and dynamic influences that can effect change and productivity. By welcoming on board new skills and expertise there is a knock-on positive effect to innovation and growth.
So Why Does Your Voice Count?
Whether you are an employer working in the public or private sector, whether you are a recruitment specialist, or whether you are or have been a candidate seeking work, this Open Consultation is for you to have your say on whether Recruitment Practices in the Public Sector should be Opened Up. All you need to do is give your opinion, answer a few simple questions based on your experience, and we might see some changes that have been a long time coming that will benefit us all. Changes don’t happen unless people speak up, and in this instance it’s pretty easy to do so.
What To Do
It really is simple. All you need to do is visit this site, scroll down and click on the Form to fill in. It’s going to take about 10 minutes to do so, so not long. Then either email your completed form to email@example.com or send it to the Government at:
Labour Market Directorate
Department for Business Innovation and Skills
1 Victoria Street
Make sure you’ve sent it off well in advance of the closing date: 15th April 2016.
It really is that simple. Have your voice counted, and let’s effect a change in the Recruitment Market.