Delayed Brexit and blue-collar staff shortages could see the UK economy lose out on £22 billion a year by 2024

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A delayed Brexit could see the UK suffer a £22 billion reduction in economic output, compared to an ‘orderly Brexit’ – a new study has revealed.

The report, developed by workforce management expert Quinyx in collaboration with Development Economics and Censuswide, includes economic analysis of ONS data and findings from an employer sentiment survey of 1,008 senior decision makers in UK firms that hire blue-collar workers. It highlights the importance of these workers to the UK economy, and the severe impact Brexit uncertainty will have on their jobs.

As part of the research, Quinyx compared the predicted growth and economic output of the UK’s blue-collar workforce under both a delayed and timely Brexit scenario.

The study found that the increase in economic output generated by the UK’s manual and elementary workforce would be £31.7 billion per year under a timely Brexitcompared to £9.7 billion per year by 2024 under a delayed Brexit. This equates to a 70% reduction or £22 billion loss each year.

The decrease in economic output would come from a lack of access to workers in manual or elementary service roles primarily as a result of uncertainty around, or lack of, immigration policies.

These staff shortages are predicted to be felt most acutely by the logistics and healthcare sectors under a disorderly Brexit– potentially leaving some of Britain’s biggest businesses exposed.

The impact will vary across the UK. The research found that in the event of a delayed Brexit, London, the East of England and the South East will see the greatest reductions in both available workers and economic output.

The research found that under any Brexit scenario employers in the UK expect to lose – on average – 18% of their manual and elementary service workers as a result of the UK’s departure from the EU, with 22% saying they expect to lose 31% or more. Despite this, 28% of businesses have no plan for managing their future pipeline of these workers post-Brexit.

Mansoor Malik, Managing Director UK & International at Quinyx, comments:

‘’The impact that a delayed Brexit will have on the UK’s blue-collar workforce and the businesses that employ them is concerning. Access to these workers is crucial for ensuring the UK’s economic wellbeing – and employers need to make plans to avoid staff shortages in the future.

‘’A first step for employers facing staff shortages is looking at ways that they can bridge the gap between supply and demand. Given the degree of uncertainty on the horizon, seeking out new ways to attract and retain domestic staff should be a primary focus.’’

The research also found that challenges accessing workers in manual or elementary service roles, as a result of Brexit, are likely to be further exacerbated by the fact that UK employers already report trouble recruiting and retaining these workers.

Nearly half (49%) of UK employers currently struggle to recruit manual or elementary service workers, with the same percentage reporting that they struggle to retain them. The main barriers to the recruitment and retention of these workers in the UK are low pay, unsociable hours and lack of career progression. Lack of flexibility was also cited by one-fifth (19%) of employers as a significant grievance among its manual and elementary service workforce.

Mansoor continues:

“Our research found that skills shortages, as a by-product of poor retention and the inability to recruit workers, result in a 9% reduction of growth and a 10% drop in productivity in businesses, on average.

‘’Hiring and retaining these workers is no easy task at the best of times, but with Brexit on the horizon it’s crucial that businesses now do all they can to attract motivated workers to these roles. Employers need to be creative and provide the greater flexibility that workers in manual or elementary service roles are looking for.”