Impact of Brexit on Migrant Workers in the UK

Introduction

The raging deliberations with regards to the membership of the UK to the European Union (EU), a major campaign revolving around Brexit was that it would provide the UK with increased control over the number of immigrants who enter the UK from various member states from the EU. Many local individuals have voiced an apprehension that greater immigration levels would have made a negative impact on their jobs, quality of life and wages [1]. For the past two decades, a tremendous growth in immigration was observed and a substantial part of this growth has been from other EU nations. This is particularly true post 2004 and the accession of eight East European nations (the A8). In the period ranging between 1995 and 2015, total immigrants belonging to other member states from the EU living within the UK had witnessed a triple growth from 0.9 million to 3.3 million [2]. The share EU nationals grew from 1.5% to 5.3% of the overall total population and from 1.8% to 6.3% of the working age populace [2] (adults falling in the age group of 16-64). The national overall income on the whole has experienced a growth owing to higher immigration (increase in number of workers would increase the GDP) and has been an advantage for immigrants who have moved to the UK as they are comparatively better off in the UK as compared to the states they belonged. But it needs to investigated whether this trend has been economically detrimental to natural born citizens of the UK? Also, a necessity has been felt to understand the ramifications of Brexit on migrant workers in the UK.

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Figure 1: Overall Immigration to the UK from EU and Non-EU States

Source: Office for National Statistics [3]

Impact of Brexit on Migrant Labour in the UK

Migrant workers UK both from EU and non-EU nations abound in the UK and they prove to be quite significant for several industry sectors. However, there have been concerns that Brexit could curb the flow of migrant workers into the UK [4]. Reduction in the labour market could result in an undue hike in labour costs, in terms of recruitment as well as wages, and prices which could then be transferred to the end user while having the potential for lowering profit margins or sales volumes [4]. Modifications within the labour market in the UK have been observed as per the employment figures which indicated that unemployment within the UK has been at a very low rate since past 42 years (4.2% as on 15^th May, 2018) [5].

The rate of employment for people from the EU was at its peak, but it was forecasted to drop owing to Brexit and a clear indication of this trend could already be witnessed when the workforce from EU within the UK fell by 28,000 over a period of the past 12 months [5]. This drop in the number of migrants from the EU owing to higher rates of employment and the number of EU migrants going back to their home states tends to pose a major challenge over a short-term as well as long-term period for organizations within the UK, as far as their human resource management practices are concerned [6]. Challenges in the short-term for organizations could emerge owing to uncertainty of the possible conditions of employment which could be enforced across EU workers working in the UK, and the consequent challenges of having the capability to satiate manpower requirements in future with duly skilled and qualified personnel [7]. To tackle these challenges, it would need human resource managers to evaluate existing as well as future strategies for talent management.

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Conclusion

The impact that Brexit would have on the EU labour force within the UK would present challenges that might be beyond the control of organizations, however organizations are in a position to tackle such challenges by initiating certain actions. This would involve a reassessment of their strategies for talent management. It would also include evaluating the influence of more limiting policies of immigration on their existing workforce and the manner in which these can be tackled by seeking alternative strategies for recruitment within diverse markets. The focus of talent management would also be on the necessary roles within organizations and from the context of Brexit, it would become necessary to include what the necessary roles might be and the manner in which an organization would be able to develop other employees to take-up such roles. Considering the possible modifications within the macro-environment, the talent management of an organization would only need to evaluate these, but also evaluate how its internal context could satiate such challenges with a view to sustain success. This would require the organization to initiate a scenario planning in order to make sure that the response undertaken is highly appropriate and proactive.

References

[1]  J. Wadsworth, S. Dhingra, G. Ottaviano, and J. Van Reenen, “Brexit and the Impact of Immigration on the UK,” CEP Brexit Anal., vol. 5, pp. 34–53, 2016, [Online]. Available: http://library.kiet.re.kr/_MultiData/krms/00040/427/BREXIT 2016.pdf#page=50.

[2] United Nations, “International Migration 2019,” 2019. [Online]. Available: https://www.un.org/en/development/desa/population/migration/publications/migrationreport/docs/InternationalMigration2019_Report.pdf.

[3] Office for National Statistics, “Migration Statistics Quarterly Report: February 2016,” 2016. https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/february2016#net-migration-to-the-uk.

[4]  Norton Rose Fulbright, “Immigration after Brexit The new points-based system,” 2020. https://www.nortonrosefulbright.com/en/knowledge/publications/2fd4c32b/immigration-after-brexit.

[5]  The Guardian, “UK real wages rise, but drop in EU workers could hurt NHS – as it happened,” 2018.

[6] PWC, “Brexit – A key role for HR People and organisation issues to consider following the EU referendum,” 2016. https://www.pwc.co.uk/eu-referendum/po-summary-of-brexit-and-hr-related-issues-september-2016.pdf.

[7] BBC, “Brexit: What you need to know about the UK leaving the EU,” 2020. https://www.bbc.com/news/uk-politics-32810887.