The Impact of Brexit on Migration & UK Industries
As the UK’s latest migration figures show a dip in net migration, we examine the impact on six of the most affected industries and what organisations can do to mitigate the risks.
The UK’s looming unprecedented labour shortage caused by an ageing workforce has been masked for many years by positive net migration. With net migration figures now falling, organisations must think very differently about their people strategy moving forward.
A Glimpse of Brexit’s Impact on Net Migration
These latest ONS migration figures are our first glimpse of Brexit’s impact on net migration. From September 2015 to September 2016, net migration fell by 49,000 to 273,000. This is the lowest net migration figure since mid-2014. And compared to the previous period (year ending September 2015), we had 23,000 fewer people arriving and 26,000 more people leaving the UK.
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6 Key Industries Face the Biggest Risk
Below provides a summary of our analysis of the industries that will be most affected. The report provides more detail.
Health and Social Care
- Increasing demand as the over 65s population is expected to increase by 3.4 million (30%) by 2030.
- The increase in employment from 2000 to 2015 was by far the largest of any sector.
- Limited scope for automation compared to other sectors.
- 1 in 3 doctors plan to retire by 2020 so organisations must prioritise a plan to buy, build and retain staff.
Accommodation and Food Services
- The industry has grown by 32% since 2000, with the bulk of the new jobs going to migrants.
- It will be difficult to relocate work or automate jobs.
- Employers will need to attract talent from other backgrounds and industries.
Manufacturing
- Employee base has fallen by 25% since 2000.
- Organisations still need to attract advanced, technical skills to support automation.
- Surplus workers in this industry may become attractive to fill shortages elsewhere in the UK.
- A macro risk for the UK is that manufacturing companies may move offshore.
Transport and Storage
- This industry is already experiencing a driver shortage.
- Technologies and regulation to support driverless transport are not yet in place.
- Transportation cannot be moved or relocated.
- Until automation, attracting new talent to the industry must be a priority for organisations.
Information and Communication
- Knowledge economy is high-growth.
- Talent scarcity may accelerate pay growth for key roles.
- Need to tap into automation and underutilised sources of talent.
- Relocation/contract/home working may be appropriate for many roles.
Financial and Insurance Activities
- Demand for traditional roles (broking, customer services and sales) will decline.
- Increased demand for management, computer and mathematical roles.
- Significant competition for talent for digital, regulatory and cybersecurity needs.
- Need to redeploy existing workforce and diversify the talent pool to obtain the skills needed.
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Over the next few months we will be providing detailed analysis of the combined impact of age and migration on affected industries. We will also continue to publish regular updates as UK population, migration and labour force data become available and as the Government reveals more information about its future migration policy.