The Recruitment Industry takes the Brexit debate head on!

The recruitment industry is worth a valued £26bn a year to the UK economy. With the upcoming European referendum, businesses have been trying to constructively contribute to the debate and give analysis of what the impact might be. Reports from within the recruitment sector have been mixed, some worried about a potential skills shortage with others adopting a more relaxed approach.

The Association of Professional Staffing Companies (APSCo) has been representing professional recruiters since 1999.  APSCo has become a trusted badge of quality within the sector, with an increasingly international profile. For many years its trade delegations have supported the global growth of its member organisations. With the upcoming referendum British membership of the EU, APSCO produced a report on the issue to help inform its members.

Findings from APSCo Report (2016):

·     Two APSCo surveys, in the summer of 2015 and in February 2016, found that support for remaining in the EU had significantly dropped from 80% to 59%, suggesting a growing unease with the status quo

·     For recruitment firms, social and employment policy is one of the most controversial areas of EU competence. Agency Workers Regulations (AWR) and the derived Temporary Agency Workers Directive is viewed as inappropriate European legislation for many professions with ‘no corresponding positive benefits for the independent professionals placed’.

·     From a recruitment standpoint, the Services Directive is the most important concession from the Prime Minister’s renegotiations with the EU, allowing UK firms to get full access to the EU services market. The Services Directive would add 1.8% to overall EU GDP.

·     Any provisions for leaving the EU should be drawn up in consultation with the private sector to ensure that the UK is not left at a disadvantage compared to EU states in terms of competitiveness

APSCo Scottish Forum Debate

APSCo’s Scottish Forum made its own personal contribution to the issue by bringing the debate to their Glasgow meeting, hosting three prominent speakers: John MacLeod (ICAS), John Edwards (Scotland Stronger In Europe) and Iain McGill (business owner). The debate, chaired by Abigail Stevens, Managing Director of Think Global Recruitment, allowed three perspectives: neutral, for and against, with respective proponents providing their own analysis on the issue concluding with questions from APSCo members.

John MacLeod, Partner at Mazars UK, first spoke about ICAS’s official report and how their assessment concludes that rather than a factual decision, people will be heavily influenced by perceptions of subjective issues such as immigration, fairness and national interests. ICAS’s objective report gave an independent review of all of the key figures at play and can be read here. He stated that his job, as a neutral contributor, was sometimes the most difficult ensuring impartiality in all of the assessments.

With neutrality set aside, it then came time for the big debate. As people say that they want to hear the facts, without transcribing the whole debate, and to bypass the hyperbolic statements we have summarised some of the main points.

Four key points that can be concluded from the debate:

-      Three territories have left the EU or European Economic Community

Two territories, Greenland and Algeria, left the European Union’s predecessor, the EEC. The Caribbean Island of Saint Barthélémy withdrew from the European Union in 2012 and instead joined the Overseas Countries and Territories List.

-      Whatever the outcome we will have terms settled by 2018

Under Article 50 of the EU’s Lisbon Treaty, the UK will have two years to negotiate an exit, during which time its future relationship with the EU will have to be agreed. The UK would continue under the European Union until that time and by 2019 there will be some degree of certainty as to its position within the continent.

-      If the UK votes to leave, unelected European officials will still retain some power

The European Court of Human Rights will still have an ability to overturn the UK High Courts on social and employment issues as the UK will remain signed up to the European Convention of Human Rights. However, the unelected European Commission (Europe’s governmental cabinet) would lose its authority to create legislation.

-      It’s impossible to know the economic impact of an exit

Although this might not have a numerical weighting attached, it actually has more value than any of the campaign statistics. Since most of the economic arguments are based around future trade negotiations it would be impossible to determine what the economic situation post-exit would look like. There was mutual agreement in the debate that it would rely on a fair amount of ‘crystal ball gazing’ with both sides using alternative figures and experts.

As expected from these debates, it managed to result in more questions than answers. The purpose of this blog was to highlight some of the key issues to the recruitment industry and help assist in answering some of the uncertainties around the referendum. We hope that you have found this article useful and would encourage additional reading on the subject.

APSCo, ICAS, Mazars UK and Think Global Recruitment would like to confirm their neutrality on the referendum issue. Iain McGill was speaking in a personal capacity and John Edwards was speaking on behalf of Scotland Stronger in Europe. We would like to thank all those that contributed to this article through their reports or arguments.