How to manage the workforce risks of Brexit
This article is part of the FERMA/AIRMIC joint Brexit Newsletter which is designed to give risk professionals unique insight into Brexit related risks and mitigation strategies.
The majority of UK businesses are failing to plan for Brexit workforce challenges, according to research from the chartered institute of personnel and development (CIPD). Ben Willmott, head of public policy at CIPD, offers advice to British businesses.
Amidst the lingering confusion over what impact Brexit will have on UK employers, one area where there does appear to be some certainty is around restrictions on EU migration and the end of freedom of movement. The UK government published its White Paper on immigration reform just before Christmas, which suggests that it will be significantly more difficult for employers to access both skilled and unskilled EU workers after we leave the EU.
The proposals, which are subject to consultation, include no overall cap on skilled workers. However, there are plans to engage with employers on the appropriate salary threshold for skilled and intermediate skilled workers. Low-skilled workers, meanwhile, would only be able to apply for a short-term visa.
Just the act of ending freedom of movement and introducing a work visa system for EU nationals, however flexible that system is, will put a sharp brake on EU immigration simply as a result of the additional cost and bureaucracy the system will place on employers and individual.
Health, social care, hospitality and construction sectors are most likely to be affected by these proposals.
Consequently a key area for action for UK employers is ensuring they will continue to have the necessary skills and labour to continue delivering on business objectives, against both expected and unexpected changes. Workforce planning, specifically in the Brexit context, will therefore be a business imperative. However, CIPD research suggests only a minority of employers are taking action in this area.
A fundamental starting point for organisations is understanding the make-up of their workforces, including how many EU nationals they employ, the average length of service of employees, their skills, location and age to retirement.
This will give a clearer picture on the reliance on EU migrants and also other risks around workforce retention and current and future skills requirements. A next step would be to do some scenario planning to consider how the organisation would cope if there was a significant reduction in its ability to recruit and retain EU nationals and how identified risks and challenges could be mitigated.
An important area for UK employers to consider will be to improve how they attract and recruit candidates, for example by increasing the use of social media to reach a wider more diverse audience of potential job seekers, or targeting particular groups such as older people, or parents looking to return to employment after having children.
Organisations should also ensure there are no unnecessary barriers when recruiting staff, such as requiring candidates to have a degree when the job does not require this.
Improving workforce flexibility
UK businesses should also consider their use of contingent workers such as self-employed contractors or temporary workers to deal with fluctuating demand for goods or services. However, in doing this employers must ensure they are very clear on the employment status of such atypical workers and the employment rights they are eligible for.
Another approach to achieving workforce flexibility is to increase opportunities for employees to benefit from flexible working opportunities such as working from home, flexitime, job sharing and compressed hours working. Flexible working is also crucial to retaining employees, particularly those with caring responsibilities, older workers and people with health conditions.
In addition, UK employers should review how they upskill existing staff, through apprenticeships and other forms of on-and-off the job training and development. Training and career development is essential as a means of addressing skills gaps in the organisation and is also necessary to encourage people to stay with the organisation for the long term.
Investing in improving the quality of people management by line managers and supervisors is also at the heart of retaining staff, as it is how people are managed on a day-to-day basis that will decide their level of motivation and commitment to the organisation.
There is no doubt that Brexit could present a significant risk to many organisations but if British employers use it as an opportunity to take a step back and improve how they recruit, manage and develop their workforce it may also provide an opportunity.
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