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Employers cut down on hiring and investment following Brexit

13th October 2016

In our last update we reported on the likely effect of the Brexit vote on UK employment law. Whilst there are no immediate plans to change workers’ rights, a new study suggests that some employers have halted recruitment following the outcome of the EU referendum.

The study, by CIPD and Adecco Group UK and Ireland, found that 33% of employers expect Brexit to increase their costs and 40% expect it to make it more difficult to recruit EU migrants over the next 12 months. The survey is based on UK employer opinion both two weeks before and two weeks after the EU referendum.

Similarly, 21% of employers expect they will need to reduce investment in training. Whilst 36% expected to increase staffing levels over the next three months, this was a reduction from a pre-Brexit 40%, showing a significant 4% decrease.

The data provided therefore demonstrates a clear decrease in employer optimism following the Brexit vote. However, it is likely that the current uncertainty around Brexit is making employers cautious, and it will be interesting to see how recruitment trends change further once the exact terms of the UK’s exit have been negotiated and finalised. In particular, if there is difficulty with obtaining workers from the EU, or obtaining sponsorship for existing EU workers, we may see a significant increase in hiring levels in order to address a deficit in the workforce.

If you have any queries on the effect of the Brexit on your employees or workers, please get in touch.

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