Written by Helen Beech and Georgia Roberts and

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The British Chamber of Commerce (BCC) has released its latest quarterly economic survey, which perhaps unsurprisingly reported that the UK has “stagnating levels of growth and business confidence as a result of heightened Brexit uncertainty”.

The survey, which is the largest private sector business survey in the UK, is made up of responses from over 6,000 business (which employ over a million people) across the UK.

One of the key findings of the report is that businesses across all sectors are facing increasing difficulties in recruiting staff, with the manufacturing and service industries reportedly struggling the most.

Of the manufacturing firms surveyed, 81% reported difficulties recruiting staff, which is the joint highest percentage on record. The sector experienced a 17% decrease in job applications from EU nationals in 2017, and a further decrease of 26% in 2018, in line with heightened Brexit uncertainty as we nudge closer to the leave date. The recruitment difficulties facing the service sector is also at a near record high.

The decrease in the number of EU applicants to UK jobs is being felt across all sectors and is making headline news. For example, The National Institute of Economic and Social Research reported at the end of 2018 that there could be as many as 51,00 unfilled vacancies for nursing staff in the NHS by 2021, following the end of the Brexit transition period and the final exit of the UK from the EU.

The BCC survey also reported that skill shortages are impacting the ability to recruit which is further compounded by immigration uncertainty. The current workforce is unable to keep up the pace of technological advances in all sectors of the labour market; an increasing demand for high skilled workers is outstripping supply.

At the other end of the spectrum, the new immigration system proposed post-Brexit is reported to be both more costly and more burdensome for employers who rely on EU nations to fill lower paid, lower skilled jobs. The skill base of the workforce is being squeezed from both the bottom and the top.

HR departments and talent acquisition teams are really going to have to think hard about their recruitment and retention strategies in anticipation of the skill shortages posed by Brexit and which are likely only to get worse, in the event of a no deal.

Organisations will first want to retain their current talent and so understanding the immigration status of the workers will be fundamental. Those from the EU will have to apply for settled or pre-settled status. An audit of the talent may indicate that the business should provide support to its EU workers both with advice and/or financially to make the application to stay in the UK.

Identifying skill requirements early on, as well as having a good idea of future business needs will be crucial as competition hots up. If the expected landscape is that employers will not be able to rely on overseas nations to fill both high and lower skilled roles, we will need to improve our domestic education, training, and recruitment strategies to encourage more British workers to apply for such jobs.

Retention of workers then becomes the key. Benefits, not just in terms of monetary compensation, but work-life balance, flexibility, recognition and opportunity to develop and grow within a business may become the differentiating factors that mean a business holds onto its talent rather than loses it to the competition. Being good at these things will become so much more important when there is a reduced talent pool. Simply “getting by” will no longer pass muster.

Looking to the future, training existing staff to be more flexible in their approach, thought processes, skills and adaptability will set a company in good stead to fill future vacancies that might have become difficult to fill post Brexit. And on a practical level, ensure contracts and job descriptions are drafted to allow for flexibility of role and attitude to match the ethos of the company.

Brexit involves many uncertainties, but businesses should not be paralysed into inaction, rather they should seize the opportunity now to get ahead of the game.

10th January 2018