Brexit a double-edged sword for the UK labour market

Five years from the seismic Brexit referendum of June 2016[1], the UK labour market is feeling its consequences. We have seen a notable shift in international job search patterns on Indeed UK. The news is mixed, with both positive and negative developments.

EU jobseekers are less inclined to search for UK jobs, with lower-paid positions seeing the greatest fall-off[2]. These are jobs most likely to be affected by new skilled worker visa rules.

We see evidence of a clear Brexit effect, rather than just a pandemic travel effect. Falling searches from the EU contrast with rebounding searches from non-EU countries and from Ireland, whose citizens are unaffected by post-Brexit immigration policy thanks to the Common Travel Area. Non-EU interest in higher-paid jobs has actually registered a substantial increase.

The changes in international jobseeker interest in UK positions suggest that the shift in the UK’s immigration regime is working very much the way the government intends — to “reduce overall levels of migration and give top priority to those with the highest skills”.

For some employers and recruiters, this spells a need to rethink recruitment strategies 

For some employers and recruiters, this spells a need to rethink recruitment strategies. For those that previously relied on EU workers to fill lower-paid jobs, such as cleaning, social care, distribution, childcare, food and hospitality, that is likely to mean an increased reliance on domestic candidates. This could be problematic in some cases, given a historical reluctance of home-grown workers to do some types of jobs and the fact that some jobs (lorry driving for example) involve lengthy training periods. Where recruitment difficulties prove persistent, the answer is likely to ultimately involve reviewing pay and conditions.

Concerns over skill shortages in a range of industries from social care to haulage have generally been met by the government rejecting calls for increased flexibility

Concerns over skill shortages in a range of industries from social care to haulage have generally been met by the government rejecting calls for increased flexibility. The Home Office has repeatedly emphasised that employers should focus on hiring and training British workers. The need to recover pandemic job losses among the domestic workforce has only reinforced this position.  

It’s a very different story for those recruiting for roles paying higher salaries, including tech, engineering, finance and medicine

It’s a very different story for those recruiting for roles paying higher salaries, including tech, engineering, finance and medicine. Rising non-EU interest in UK jobs means they are well-placed to tap into new talent pools. Several current and former Commonwealth countries have notched some of the biggest increases. Jobseekers from India and Pakistan are particularly interested in software development jobs, while we’ve seen rising interest in nursing jobs from Nigeria.

Meanwhile, job searches from Hong Kong spiked after the UK government offered citizenship to around three million residents of the special administrative region in July 2020 and have stayed high since.

For the UK labour market, the changes we’re seeing underline that Brexit is a double-edged sword. Jobseekers have reacted to the new immigration system, while British employers wanting to hire from abroad will benefit or suffer depending on the type of work they offer. Some will need to be creative in how they respond and think carefully about how they attract the workers they need from pools of candidates who may have different characteristics to those they previously relied on. 

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Jack Kennedy, UK Economist at Indeed