New research by the Federation of Small Businesses (FSB) has found that an inability to recruit skilled workers is right at the top of SMEs’ post-Brexit worries.
EU Workers Employed by a Fifth of SMEs
The FSB’s report, ‘A skilful exit: What small firms want from Brexit’, found that 21% of small employers currently have EU staff.
The FSB found that these small businesses with EU workers mainly employ mid-skilled staff (47%), such as care and construction workers, mechanics and office managers. Nearly three quarters (72%) of these small firms recruited their EU workers when they were already living in the UK.
Fears for the Future
Over half of small businesses with EU workers were worried about finding people with the right skills (59%) – or growing their business (54%) post-Brexit. 95% said they have no experience of using the UK’s points-based immigration system to recruit non-EU workers.
When asked what would happen if Brexit creates additional barriers to recruiting EU citizens, 13% of small firms that employ EU workers would consider moving their business abroad and another 13% foresee reducing their operations, while 8% would even consider closing down.
Mike Cherry, FSB National Chairman, said:
“There is real concern among small firms with EU staff that they will lose access to the skills and labour their business needs to survive and grow. EU workers are a vital part of our economy, helping to plug chronic skills gaps across a wide range of sectors, and filling jobs in an already tight labour market. From packers, to mechanics, to graphic designers, small employers need to be able to hire the right person, for the right job at the right time.
“Securing the right to remain for EU workers in the UK must be a priority. It’s also crucial small firms are given time after the UK leaves the EU to prepare for the new immigration arrangements. There can’t be a sudden cliff edge preventing small firms from accessing the workers they need. This means having sensible transitional arrangements first, followed by the phased implementation of a new immigration system.”
What Post-Brexit SMEs Want – and Need
What they want:
Over half (56%) of small businesses with EU employees said they were concerned about needing to enforce new immigration rules post-Brexit. On average, SMEs wanted a transition period of more than three years after the UK exits the EU to meet their jobs needs.
What they need:
The FSB has called on the Government to
+guarantee, as soon as possible, the right to remain for EU citizens in the workforce.
+ensure SMEs aren’t left battling layers of red tape when recruiting workers under any new immigration rules.
+ensure the 30% of SMEs that carry out cross-border business with the EU are not disrupted by Brexit
+ensure that special consideration is given to businesses in Northern Ireland, the only part of the UK with a land border with another EU member state, as tens of thousands of people commute over this border on a daily basis.
“Restrictions on immigration will be felt more acutely by small businesses,” warned mike Cherry. “Most small firms don’t have HR departments to deal with complex immigration procedures, or the time and resources to deal with swathes of additional paperwork or extra costs.
They are least well-placed to cope with losing staff, or dealing with a burdensome application process from the government to retain and hire new staff. So it is vital that the Home Office engages with small businesses as early as possible on the design of a new immigration system to ensure affordability and ease of use. Otherwise, as our research shows, the consequences for small business growth and survival could be severe.
“Brexit negotiations must also take into account those small firms who have important business relationships with the EU. Brexit will not work for small business if there are delays or difficulties in doing business across the EU border.”