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European workers depart Brexit Britain for certainty on the Mainland

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The Numbers

One year on from the European Union Membership Referendum, and the latest UK migration figures released by The Office for National Statistics paint a somewhat unsurprising picture – EU workers are choosing to leave the UK.

The numbers speak for themselves. 117,000 EEA citizens emigrated from the UK in 2016, an increase of 31,000 on the total that left these shores in 2015. In a year that saw 52% of the voting British public decide to leave the EU, we simultaneously saw the greatest annual exodus of EEA citizens since the peak of the financial crisis in 2008. Furthermore, less citizens are migrating into the UK from Europe – just 275,000 in 2016, a decrease of 33,000 from the year before.

This all contributes to a significant fall in UK net migration figures. Still a way short of the incumbent Government’s recently-reduced target of “tens of thousands”, the surplus of incoming migrants over UK leavers was 248,000 for the year ending January 2017. Nevertheless, the sharp increase in emigration among EEA nationals, particularly those from Eastern Europe, since the referendum shows that British businesses need to start preparing now for a big shift in the labour market, even before we leave the EU.

What do these figures mean for UK employers?

The latest figures seem to suggest the realisation of a long-anticipated fear, forecast by analysts, business commentators and industry leaders alike – EEA citizens are beginning to select reliable employment in mainland Europe over the uncertainty presented by Brexit in the UK. The Government has repeatedly refused to confirm whether EEA citizens will have a right to stay in the UK after Brexit negotiations, despite widespread calls to do so.  

This latest trend is likely to have its greatest impact on UK sectors reliant on unskilled or low-skill labour, where the demand will largely remain unfulfilled by the home-grown pool available. Industries such as hospitality, leisure, retail and construction are set to find themselves more exposed than most, whilst staffing shortages in the public sector have been widely publicised.

Besides a marked reduction in the selection of workers from which to choose, UK businesses are now faced with a number of other challenges.

The prospect of the UK’s lack of access to free movement of persons is likely to precipitate an increase in immigration fees relating to EU workers – both from the perspective of the employer, and for the workers themselves. Current EU directives curtailing the tariffs for immigration applications, whilst set initially to be  transposed in an identical form into UK law, will no longer bind the Home Office’s hands as to costs. Long-standing low prices for EEA citizens applying for permanent residence in the UK for example, are likely to be replaced with a model closer to the far higher settlement visa costs for non-EEA citizens. Prohibitively high costs for EEA citizens to protect their immigration status within the UK will undoubtedly have an impact on UK employers and their prospective workforce. Couple this with the certainty that whatever the proposed new system around hiring EEA nationals looks like post-Brexit, employers should expect additional costs and administration following removal of freedom of movement, and there is a need for an EEA workforce strategy that British employers are unable to overlook.

A further, immediate challenge, is the prospect of meeting the greater expense and complexity of accessing labour from outside the EU market, under the Tier 2 points-based system. Such a solution requires UK employers to obtain a Sponsorship Licence, and to navigate a number of recruitment regulations and immigration red tape. This equates to flying in the face of specific Government attempts to protect the British workforce, and its wider mandate to reduce net migration. Nevertheless, as the ONS figures are starting to bring home, recruiting unskilled labour from further afield may no longer be the largely overlooked secondary option it once was for UK employers.

How are UK employers responding?

So how are, or perhaps more importantly how can, UK employers respond and mitigate the impact the of the ONS’ latest statistics? The most proactive of the group have identified the need to help their current workforce attain permanent residence in the UK, before the two-year Article 50 negotiating period draws to a close in March 2019. This allows EU workers, many of whom will have already obtained the right of permanent residence (through, for example, a period of 5 years’ continuous UK employment) to secure their immigration status in advance of any changes on the Brexit horizon. Indeed, despite an increase in EEA national emigration, the number of EEA nationals in the UK applying for permanent residence more than doubled from 92,289 in 2015, to 201,287 in 2016. A select group of law firms and immigration advisors are rolling out specific training for employers to help them educate their workforce in this area – for advice on how Chattertons are able to assist, please contact a member of our Immigration team.

Other approaches include an emphasis on apprenticeship and training schemes for both younger and older British workers, taking advantage of the Government’s Apprenticeship Levy. Whilst there can be little debate as to the long-term benefits of such schemes, they are unlikely to meet the short-term demand many employers now find themselves faced with.

To discuss any of these matters further, please contact a member of our Immigration team to arrange a consultation or to discuss any specific matter in more detail.