After being a member state for 46 years, Britain’s departure from the EU has been much discussed, reported on and argued over. Regardless of whether you were for, or against, our exit is impending.
Among the reasons for leaving the EU, were the cries of, ‘British jobs for British workers. Among the MANY questions regarding this statement, is one that stands out: do British workers even want some of the jobs commonly undertaken by migrant workers?
Because in our experience, when it comes to various roles in the food and FMCG sector, they, in fact, do not.
To begin with let’s take the example of an abattoir vet, something that we have touched on before. Abattoirs in the United Kingdom are unable to operate without a vet on premises, responsible for overseeing the animals and their welfare on the way to slaughter. Many UK vets have no interest in roles such as these, instead opting to work with domestic animals or farming livestock. As a result of this, we have seen a large proportion of Spanish vets in roles such as these.
For the farming and agricultural industry, migrant workers account for a large proportion of the labour force. There has already been a post-Brexit visa scheme for 2,500 farm workers between 2019 and 2020 – a similar scheme was previously in place, but ended in 2013. However, news reports last year painted a bleak depiction of tonnes of crops left to rot because of the shortage of pickers and packers. One farm in Hertfordshire reported wastage of 87,000 punnets of fresh raspberries in 14 days because of a lack of staff.
Not only is there a downfall in the number of British citizens in comparison to the number of vacancies, there is also concern that there will be a lack of willingness by UK workers to undertake the labour-intensive roles EU nationals would normally perform.
A greater reliance on UK workers is likely to impact wage costs but could also prompt firms to revisit their business model. The reliance on less-expensive and more-flexible EU workers has meant that businesses haven’t been required to make investments into the efficiency and productivity of their workers – until now.
To fully understand how the restrictions on freedom of movement and goods will impact talent and supply chains, we will need to feel the effects of Brexit first-hand. However, it’s thought that the long-term effects could delay new product development and investment in facilities and infrastructure.
We know that the impact on the supply chain is a cause for concern, especially for those that rely on a supply chain involving multiple countries. In these instances, there are several elements that will impact profits and eat into other budgets – including recruitment.
An increase in cross-border tariffs and investment into new or upgraded IT systems to manage import/export paperwork, not to mention the cost of seeking legal support, will be required. All of this could result in longer wait times, meaning products will need to be stored in warehouse facilities, adding to the cost and complexity of the supply chain, causing perishable goods to suffer.
The impact on access to talent and recruitment is yet to be seen. However, it’s likely the consequences will be considerable.
Across all skill levels, but particularly lower-skilled workers, we envisage there to be labour shortages. As previously mentioned, there already been a decrease in the number of EU workers coming to the UK, whist some have returned to the continent, knowing their fate hung in the balance. A previous report by the Food and Drink Federation found that almost 33% of the EU workforce in the UK had left within 12 months of the Brexit referendum, and a further 47% were considering returning to their native countries.
It has been speculated that in order to continue working and living in the UK, European individuals will face more rigorous requirements, including working visas and a demonstration of skills. For businesses that rely on employees from EU member states, there may be HR and employment legislation that requires contracts and remuneration and benefits to be reviewed.
The reality is that the lack of labour is one of the biggest threats to food and FMCG businesses, namely those that require a large volume of low-skilled workers.
Uncertainty around Brexit has also contributed to a shift in consumer behaviour.
Another element that will ultimately begin to impact staffing budgets is the changes in consumer spending, as they become more cautious as a result of wage constraints.
By June 2019, consumer spending was at its lowest since the mid-90’s, however by the end of 2019, we had seen some growth (0.6% year–on–year in like-for-like sales), indicating that there may be an opportunity for recovery in this area.
To combat the decline, there is talk around simplifying ranges and increasing the volume of everyday items. However, the other side to the argument is that we see a boost in investment into British production and farming as a solution for a reduction in imported foods. This could lead to consumers choosing British foods that are in season.
It’s not just the FMCG and Food sector that is facing a talent shortage. There is wider concern that a lack of access to workers could compromise Britain’s prominent position in a range of sectors. If you are concerned about your recruiting and staffing needs in the wake of Brexit, contact a member of our team today to see how we could help.
Prior to The Sterling Choice I spent my earlier life in the Insurance industry (don’t judge me). I started The Sterling Choice with Gareth back in August 2013. When I look back to our h...