UK firms lifting wages as EU migrant numbers fall

UK companies are being forced to lift wages to attract employees as fewer EU citizens come to seek work due to Brexit uncertainties, according to a survey of personnel managers.

The Chartered Institute of Personnel and Development (CIPD) said applicant numbers per vacancy had fallen since last summer.

According to the latest official data, the number of EU-born workers in the UK increased by just 7,000 from the first quarter of 2017 to the same period this year, compared with an increase of 148,000 year on year from the first quarter to 2017 - a fall of 95%.

“The fall in labour supply growth from EU-born workers coincides with a fall in the youth unemployment rate to a fourteen-year low and an overall fall in the population of young people over the past year,” the CIPD said.

“Overall, it seems that the downward pressure of persistently weak productivity growth is dominating any upward pressure from labour and skill shortages.”

“With Brexit looming we're seeing a talent shortage and a more competitive marketplace,” said Alex Fleming, president of staffing at Adecco, which co-authored the study.

“In this candidate-short landscape the pressure is on employers to not only offer an attractive salary, but also additional benefits.”

Gerwyn Davies of the CIPD said the “significant slowdown” in the number of EU nationals coming to work in the UK was “feeding into increasing recruitment and retention challenges, particularly for employers in sectors that have historically relied on non-UK labour to fill roles and which are particularly vulnerable to the prospect of future changes to immigration policy for EU migrants”.

“With skills and labour shortages set to worsen further against the backdrop of rising talk of a ‘no deal’ outcome with the EU, the need for the government to issue consistent, categorical assurances about the status of current and future EU citizens, whatever the outcome of the negotiations, is more important now than ever,” Davies said.