Workforce planning and Brexit: Don’t let your EU talent drift away

 

In association with KPMG

About the Author

Punam Birly

Punam Birly, Brexit People & Immigration Lead at KPMG

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Punam Birly, Brexit People & Immigration Lead at KPMG urges companies to be practical, personal and prepared.

People are the heart and soul of any business. For many UK employers – from food manufacturers to financial services firms – that now includes a large number of EU citizens, whose skills and expertise comprise an invaluable part of the mix.

Brexit has left many of those workers feeling anxious. In a KPMG survey on the intentions of EU nationals in the UK, over a third of respondents reported they were considering moving on. And it’s the young, single and highly educated who are most likely to head for the door. Looking at latest migration data from the Office of National Statistics we can see that pattern playing out across the country.

Much of the evidence points to how an increasing number of EU citizens view Britain as a less attractive and more uncertain place to be. Add in factors such as unfavourable exchange rates and we’re seeing a rebalancing of the people economy as the flow of EU migrants, especially from Eastern European countries slows.

Speaking to recruiters, we find sectors such as construction, food production, retail and hospitality are all struggling to find affordable labour, and costs are climbing. We also repeatedly hear that despite the reassuring noises being made by the UK government and EU Commission, the facts of permanent residency often get lost in the argument.

Yet a loss of talent is by no means a done deal. As the Brexit process continues, there is plenty that employers can do to help keep prized EU talent on board.

Reassurance and advice

What EU nationals want, above all, is reassurance and advice. Where do they stand? If they want to stay in the UK, how should they apply for residency? What else should they be doing and when?

Reading through the Government’s guidance to date a few things are clear (but often misunderstood).

Despite all the noise on Brexit, EU nationals who are in the UK now will be able to stay in any scenario – deal or no deal. What really changes is the cut off point for entry, and what rights EU nationals not currently in the UK but wishing to relocate here in the future, will enjoy.

Starting with EU nationals already living in the UK. If the Prime Minister’s deal is agreed, every EU citizen will have to make an application to stay in the UK and the cut off point for entry will be 31 December 2020. There are two ways to make an application. Applicants can apply for Permanent Residence (under EU law) or Settled Status (under UK law). However, if the applicant applies for Permanent Residence, they’ll have to swap this for Settled Status by June 2021. It is also worth noting that an application for Permanent Residence or Settled Status requires the applicant to have already been living the UK for 5 years. Applicants who have lived in the UK for less than 5 years should apply for Pre-Settled Status (under UK law).

KPMG’s guidance to clients is for EU nationals to apply for Permanent Residence and then swap later to Settled Status in order to guarantee all current EU rights and benefits will continue to be available to the applicant.

EU nationals not currently in the UK

As for EU nationals not currently in the UK, if the Prime Minister’s deal is agreed they have until December 31 2020 to come to the UK and eventually settle here.

If a deal isn’t agreed, only EU citizens resident in the UK by 29 March 2019 will be able to apply for Settled or Pre-settled status. EU residents entering the UK after 29 March can only stay for 3 months without a visa. If they want to stay longer, they will have to apply for limited leave to remain, which can last up to 36 months. 

Our guidance to Business:

  • Understand precisely how many EU nationals are on your payroll.
  • Communicate as fully as possible on immigration requirements and what the changes on residency are likely to be.
  • Pin down the residency application deadlines and advise your staff what needs to be done and when.
  • Run information sessions on the visa application process.
  • Encourage staff to apply for permanent residence now, to avoid a surge in applications further down the line.
  • Decide, in a broader sense, what your policy is in terms of supporting visa applications and how much you are able to invest in the process.

Keep it personal

  • Put yourself in their shoes. How would you feel facing such uncertainty? You can help by reassuring EU nationals that you want them to stay – and keeping the lines of communication open, so that staff feel comfortable raising concerns or requests for support at any time.

Stay prepared

  • No matter how unclear the Brexit journey ahead, businesses can create their own certainty by planning for a range of different outcomes.
  • Our economy’s requirement for workers means that people are now being drawn from all over the world to fill UK jobs.
  • Given the direction that migration policy is going in, a period of restructuring is likely and as the relative cost of automation becomes more attractive.

Questions you can ask:

  • What is your possible exposure to flight risk, not just with your own staff, but also those who work for your suppliers and clients?
  • How would you replace any staff who leave? Can you recruit more locally or actively for non-EU27 talent?
  • Are you up to speed with the ‘right to work’ regime, which is designed to prevent illegal working? Which new forms of documentation might you need to check to ensure an employee has valid evidence of a right to work?
  • What is your long term workforce strategy? What alternative sources of labour can you tap into and how can technology augment what your people do?

Security for the long term

With Brexit still dominating the headlines, many EU nationals are already deciding whether or not their future lies in the UK long term. The more employers can do now to make their people feel secure and help with the practicalities of staying, the more chance they will be an asset to your business in the future.

The simple truth is: the more support you provide now, the greater the incentive for your people to stay and continue making a valuable contribution to your business. Remember, with a new immigration system coming soon and a high UK employment rate overall, many predict it’s about to become even harder to fill vacancies, so keeping your existing workforce engaged will be more important than ever.

Disclaimer

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.

KPMG International's Trademarks are the sole property of KPMG International and their use here does not imply auditing by or endorsement of KPMG International or any of its member firms.

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