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Brexit and The Recruitment Industry

Posted on Jun 9th 2016

With the EU referendum less than two weeks away the polls are showing a fairly even split between Brexit and Remain supporters. Regardless of what side you’re on most people will agree that we can’t be sure exactly what is going to happen if the UK decides to leave the EU. The jobs market has slowed down and a blog posted on Adzuna suggests that one of the reasons for this is the uncertainty surrounding Brexit.

41% of voters say that immigration is one of their two most important issues when deciding how to vote and 29% cite the impact on the economy that Brexit could have while 35% think that Britain’s ability to make own laws without EU interference is one of the more important matters. As the recruitment market is closely linked with all of these issues they could all potentially have an effect on the industry.

One of the main principles of the union is “free movement” which means EU citizens don’t need a Visa to come here to live and work and UK citizens don’t need a Visa to live in another EU country. At the moment there are over 1 million UK citizens living and working in other EU countries. While Remain campaigners argue that immigration is good for the economy and immigrants contribute more in taxes than they take out in benefits many Brexit voters say that they want to leave the EU to regain control of immigration. The reality is that some industries in the UK rely on foreign workers to survive and recruiters working in the construction and care sectors would struggle to fill their positions without EU workers.

It is likely that leaving the EU would cause an economic shock and 9 out of 10 economists agree that leaving the EU would cause uncertainty in the markets and pose other economic risks. Over three million jobs in the UK are linked to the trade with the EU and almost half of British exports in goods and services go to the EU, so leaving could put thousands of jobs at risk, which will clearly have an effect on the recruitment sector.

A minority of UK laws derive from the EU, but some of them do affect the labour market. The recruitment industry has to follow EU legislation like the Agency Workers Regulations and the Working Time Directive. If Britain leaves the EU legislation relating to recruitment would need to be re-examined and this could affect the industry. The EU also gives every citizen certain basic rights like holiday pay, maternity and parental leave and health and safety in the workplace. One of the main arguments from the leave side when it comes to work is that less regulation from the EU would create more jobs, but an independent study has shown that membership of the EU could add £58bn a year to the UK economy over the next 14 years. This could deliver as many as 790,000 new jobs by 2030.

Exports to the EU are worth £200 billion a year to the UK economy and if EU countries buy less UK goods and services UK jobs will be put at risk. If the UK votes leave on the 23rd June it will be the first time a nation state that has ever left the EU and the overall effect of leaving could lead to a lot of uncertainty in the labour market.

Written by Elina Lund