UK employers in low-skilled sectors concerned over Brexit future

Many UK firms in low-skilled sectors employ large numbers of migrants from the European Union. Now, new research suggests they are concerned about their workforce and the future of their businesses following the Brexit referendum vote to leave the EU.

Employers in three low-skilled sectors – food and drink, hospitality, and construction – interviewed after the EU referendum in June, say the Leave vote took them by surprise. Some reacted with “shock”, “horror” and even devastation, note the researchers.

The 17 employers – with workforces of between 30 and 15,000 – said they wished they had sent their workers information about the referendum and been more active in the run-up to the vote.

They said neither side of the referendum debate expressed or reflected the interests of employers in their sectors. One heard the voice of business groups like the CBI, and colourful individuals like James Dyson, but not the voice of small business.

construction workersNew research suggests UK employers in low-skilled sectors – such as hospitality, food and drink, and construction – are concerned for their EU migrant workers and the future of their businesses following the Brexit vote. Image:

One restaurant manager said small businesses like theirs – employing 70-80 people, turning over £3.5 million, and serving thousands of customers – were not represented, and added:

“We are the backbone of the economy as I understand it and nobody spoke for us.”

Concerns about future recruitment

The employers interviewed also expressed concern about their migrant employees’ wellbeing and whether they will be able to recruit the workers they need once free movement ends.

They told the researchers, from the National Institute of Economic and Social Research (NIESR), that their EU migrant workers have no idea what will happen to them in the future. They said they want firms like theirs to have a say in future immigration policy.

Some employers said their EU migrant workers no longer feel welcome in the UK, and have reported customers making hostile comments to them. Such incidents have caused many firms to reassure their EU workers and tell them how valuable they are to their businesses.

Workplace conversations about the referendum  are more common than they were before the vote. Some firms interviewed have put in place policies to deal with incidents of hostility from the public toward their EU workers.

Employers want free movement to continue

The employers said they cannot see how the points-based system – such as the one the UK uses to regulate immigration from outside the European Economic Area (EEA) and often talked about during the run-up to the referendum – can work for low-skilled sectors.

While they would prefer free movement of workers to continue, they would consider sector-based schemes, as long as they do not cost a lot to administer or involve a lot of red tape. A visa system would have to be able to respond quickly to the ups and downs of their labour market.

One of the employers interviewed, who runs a bakery company employing 280 workers – including 168 EU migrants – said:

“The outer’s view is that migration will stop and we’ll suddenly have a sensible level of tens of thousands net migration whereas anybody I know who works in a food manufacturing industry is thinking ‘oh crikey, if that happens, we’re going to be seriously stuffed in terms of what we can do to make food’.”

Two employers in the construction industry, said:

“An end to free movement will massively affect industries like hospitality and agriculture and that won’t be allowed to happen.”

Dr Heather Rolfe, Associate Research Director at NIESR, says:

“As we negotiate our way out of the EU, politicians need to minimize damage to businesses and individuals. A new immigration policy should be formed in consultation with employers, among others.”

The findings echo those of another recently published report that said some low-paying sectors will likely face serious challenges if fewer migrants enter the UK following Brexit.