Lack of skills ‘could result in small firms relocating’

There are growing concerns among SMEs that they will lose access to the skills they need from the European Union when Britain leaves the bloc, a new survey has shown.

Relocate Editorial

25 April 2017

The survey of more than 1,200 companies by the Federation of Small Businesses (FSB) showed that, if Brexit results in additional barriers to recruiting EU citizens, some firms that employ EU workers would consider moving their business abroad, reducing operations or even closing down.In the survey conducted for the FSB by research company Verve, more than half of small businesses with EU workers expressed fears about being able to access people with the right skills post-Brexit or being able to grow their business.The report ‘A Skilful Exit: What Small Firms want from Brexit’ shows that 21 per cent of small employers currently have EU staff, with most the firms recruiting all of their EU workers when they were already living in the UK.Consequently, the vast majority of small firms admitted to having no experience using the UK’s points-based immigration system to recruit non-EU workers.The research showed that almost half of respondents said the greatest need was for mid-skilled staff, such as care and construction workers, mechanics and office managers.And if Brexit creates additional barriers to recruiting EU citizens, the survey found that 13 per cent of SMEs already employing EU workers would consider moving their business abroad. A similar percentage would consider reducing operations, while 8 per cent said they might even have to close down.

Right to remain for EU citizens

The FSB is calling on the government to guarantee, as soon as possible, the right to remain for EU citizens and wants to see a minimum transition period of more than three years after Brexit for companies to be able to recruit from abroad to meet their skills needs.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.”

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Battling red tape

Firms also expressed fears that a post-Brexit immigration system would leave them “battling layers of red tape”, while others were concerned about their ability to continue to conduct cross-border business.Mr Cherry added, “Restrictions on immigration will be felt more acutely by small businesses. 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.”