Brexit may lead to labour shorftall

The latest Labour Market Outlook (LMO) report, which is produced in partnership between CIPD and The Adecco Group, suggests that, despite a near record number of 748,000 vacancies, UK employers are struggling to fill roles with the right candidates as a result of both labour and skills shortages. 

Official ONS data and the Labour Market Outlook suggest that a fall in the supply of EU nationals may be playing a key role. The ONS data shows that low-skilled sectors, which typically employ a large number of non-UK nationals from the European Union are facing particular recruitment challenges, with vacancies in retail and wholesale, manufacturing, health and accommodation, and food services making up almost half (45%) of all vacancies. 

The LMO, which surveys more than 1,000 employers, found that as many as one in four employers (27%) have seen evidence to suggest that non-UK nationals from the European Union were considering leaving their organisation and/or the UK in 2017.  This is consistent with official data, which suggests that the growth in the number of non-UK EU nationals in employment in the UK has slowed sharply in recent months. 

The figures are not seasonally adjusted so some caution should be attached to drawing firm conclusions from the data. But the report shows that the number of non-UK nationals from the European Union almost halved from an average of more than 60,000 per quarter in the nine months to June 2016 to just 30,000 in the three months to September 2016.