A key issue for business in the June referendum on whether the UK should remain in or leave Europe is to consider the consequences that a “leave” vote could have on the free movement of labour.
Restricted access to skilled workers in the absence of suitably qualified UK candidates could have a big impact on small business’ ability to prosper and grow.
The two main issues are availability of skilled people and the cost of wages.
At the moment UK businesses have access to skilled people from across the EU and this has been crucial to many firms, in particular engineering firms and metal fabricators, where a UK shortage has meant having to recruit experienced engineers and welders from former Soviet bloc countries in Eastern Europe.
There have been limited Government initiatives to boost apprenticeship numbers – the latest being to impose a 0.5% apprenticeship levy from 2017 on the payrolls of all businesses with a wage bill of more than £3 million. Others include offering small grants to smaller businesses to encourage them to take on apprentices.
However, after years of a lack of investment in training and skills, reducing the shortage of suitably qualified UK staff will take years and that assumes a serious commitment to training a future work force.
In an extremely turbulent and competitive global economic market businesses cannot wait that long.
Regulations, visas and a restricted labour market?
A second consideration is what would happen if, in the event of a majority vote for Brexit, recruitment were to be somehow restricted to UK natives in such a way that companies would have to provide evidence of a lack of suitable candidates before being permitted to recruit overseas.
Again agile and responsive 21st businesses may not be able to wait that long.
The scarcity of skilled candidates in UK means that businesses will find themselves competing for them which in turn will drive up wages putting further pressure on already tight margins.
The UK is still not investing anywhere near enough in training and skills for its own people. There is no denying that we have centres of excellence in universities and enterprise areas that can currently access capabilities from Europe, but these are not enough to support a dynamic and efficient economy.
Brexit would most likely result in businesses being constrained by having limited access to trained and skilled staff which in turn will push up wages for those with the skills and the necessary gap will not be filled fast enough to prevent a decline in capacity. Essentially the skilled work will move outside UK, to where the skilled workers are.
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