Labour shortage: Is 'Brexodus' finally starting to bite?

Immigration
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The number of people moving to the UK from EU countries has fallen to its lowest level for four years, according to ONS figures. Is the much vaunted Brexodus starting to bite - or is it just a natural decline?

The ONS data showed net long-term migration to the UK from the EU was 101,000 in 2017. Net migration, for the uninitiated, is the difference between the number of people coming to live in the UK for at least 12 months and those leaving.

Last year, 240,000 EU nationals arrived in the UK - but a record 139,000 left. The Brexit vote seems to be ground zero for the decline in figures.

Net migration from eight Eastern European countries that joined the EU in 2004 - Poland, Lithuania, Czech Republic, Hungary, Slovakia, Slovenia, Estonia and Latvia - has fallen from 42,000 in the year before the Referendum to 6,000 in 2017. While net migration from member states like Germany, Italy, Spain and France, has almost halved since the vote, falling from 84,000 to 46,000.

The number of EU citizens coming to the UK "looking for work" decreased by a third (33%) from 55,000 in 2016 to 37,000 in the last year. But those coming to the UK with a job lined up remained stable, the ONS said.

“The data suggest that the UK is still an attractive country, but its allure for EU migrants has declined considerably over the past couple of years,” said Madeleine Sumption, Director of the Migration Observatory at the University of Oxford.

“Factors like the lower value of the pound and uncertainty about the implications of Brexit may well have contributed. But it’s not all about Brexit: EU net migration was unusually high just before the referendum, and it’s likely that some of the decline would have happened anyway even if the UK had not voted to leave.”

But even if the dip is only a reversion to the mean, what does it mean for employers seeking capable, willing workers. According to the Chartered Institute of Personnel and Development (CIPD), the abrupt fall in EU nationals entering the UK coincides with a drop in the quantity and suitability of job applicants being reported by employers.

The CIPD’s research showed the number of applicants per vacancy had fallen since last year at all skill levels, and said shortages were forcing many companies to raise wages. The Institute of Directors (IOD) also recently warned of a looming labour pinch.

The institute's chief economist, Tej Parikh noted that “skills gaps” were opening up across the economy. “Individuals from abroad play a crucial role in addressing these shortages, in sectors from agriculture right through to financial services,” said Parikh.

The government has stood firm on ending free movement of workers, but spoke in vague terms of “mobility arrangements” last month in its Brexit white paper. “Given the depth of the relationship and close ties between the peoples of the UK and the EU, the UK will make a sovereign choice in a defined number of areas to seek reciprocal mobility arrangements with the EU.”

The IOD’s Parikh welcomed the aim for a post-Brexit labour mobility scheme but added, “we also need to see the government creating a positive overall migration policy later on this year that enables companies to take advantage of opportunities for growth around the world.”

Tell us about your business. Have you found it more difficult to recruit since the Brexit Referendum?

About Francois Badenhorst

Francois

I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 

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By vstrad
16th Aug 2018 10:31

"The number of EU citizens coming to the UK "looking for work" decreased by a third (33%) from 55,000 in 2016 to 37,000 in the last year. But those coming to the UK with a job lined up remained stable"

Which is exactly what we want to happen, isn't it?

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to vstrad
24th Aug 2018 11:59

vstrad wrote:

"The number of EU citizens coming to the UK "looking for work" decreased by a third (33%) from 55,000 in 2016 to 37,000 in the last year. But those coming to the UK with a job lined up remained stable"

Which is exactly what we want to happen, isn't it?

Depends what side you are on, but i think for most that was what was they set out to achieve. I dont think anyone can really deny it makes sense for immigrants to have a job lined up before they arrive

Interesting many media outlets reporting the decline neglect to add the point about those with jobs lined up remaining stable

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