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CIPD reports that a reduced amount of EU to UK migration has caused a skills shortage in the UK

According to CIPD’s latest quarterly labour market snapshot, a slump in the number of EU citizens migrating to the UK has exacerbated skills shortages in the UK.

CIPD found that the median number of applicants per vacancy across all skill levels has significantly decreased in the last 12 months. For each low-skilled role, the number of applicants fell from 24 to 20, for medium-skilled roles from 19 to 10, and for high-skilled vacancies from 8 to 6.

The prevalence of hard-to-fill vacancies has also continued to rise. Among employers who currently have vacancies, in Summer 2018, 66% reported that at least some of their vacancies are proving hard-to-fill, higher than in Spring 2018 (61%) and Spring 2017 (56%).

This coincides with a 95% decrease in the growth rate of EU-born workers migrating to the UK in the last year. Between Q1 2016 and Q1 2017, the number of EU-born workers in the UK increased by 148,000, whereas between Q1 2017 and Q1 2018, the number of EU-born workers in the UK increased by just 7,000.

Although there has still been a net increase in the number of EU workers in the UK labour market, a possible explanation for the skills shortage is a shift in the type of EU workers available in the UK labour market. Newly arrived EU workers may not have skills and experience in line with vacancies available, especially at a time when established EU workers who have built up years of experience in the UK are returning to the continent. Another possible explanation is UK job growth outstripping the growth in the UK workforce and the continued low unemployment rate.

Looking ahead, it is highly likely that labour will become even more constrained, at least in part as a result of new migration restrictions post-Brexit.

Employers would be well advised to place a greater emphasis on developing and up-skilling existing staff, for example, by sponsoring relevant professional qualifications, to be able to continue attracting and retaining people with the best skills and potential for their needs. Employers should also consider how best to retain their existing EU workers, especially as we move closer to Brexit and the launch of the new settled status scheme.

The next round of ONS migration statistics are due to be released on 23 August and it will be interesting to see whether the downward trend continues and we move into negative EU migration.

CIPD reports that a reduced amount of EU to UK migration has caused a skills shortage in the UK

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