An estimated 750,000 skilled workers – both UK citizens and nationals from other EU countries – will move from Britain to other parts of Europe in the near future to seek more stable economic environments in the post-Brexit era, a report published on Wednesday predicts.

Brexit prompts drop in confidence for small and medium enterprises

The latest small and medium-sized enterprises’ (SME) confidence index from the business leadership organisation Vistage says that, in the face of Brexit uncertainties, companies are facing one of their toughest ever recruitment challenges.One in four of the 336 SMEs surveyed said their planned business growth and investments have been hampered by Brexit negotiations, while 43 per cent said they would not be increasing headcount over the next 12 months, compared to 36 per cent in the last quarter’s survey.Roger Martin-Fagg, Vistage economist, said, “There is no doubt in my mind that SMEs will face one of the toughest recruitment challenges they’ve ever encountered in the months ahead. I suspect around 750,000 disillusioned workers will be moving to other parts of Europe to seek a more stable economy.“This means the fight for the cream of the crop will be rife for UK businesses. We will quickly see that many of the people choosing to flee the UK for ‘pastures green’ are the lifeblood of vital industries. These combined factors means automation is crucial for business survival.”

Recruitment issues as workforce deficit emerges

Almost 40 per cent of SMEs reported that it was far more difficult to hire top talent now than it was a year ago. As a result, 61 per cent have turned to social media channels to recruit and more than half have had to raise salaries to attract staff.Compounding recruitment problems is the fact a workforce deficit likely to emerge over the next seven years, with 14 million employees retiring but just seven million people of working age entering the market...and this at a time when net migration to the UK is predicted to tumble.

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The survey showed that retaining existing staff had taken on even greater importance for SMEs, with two-thirds improving the training on offer, 58 per cent raising salaries and 55 per cent looking to boost the benefits packages.However, many firms admitted there was still room for improvement, with almost half conceding they did not monitor competitor packages and almost one in three recognising they have fallen down on succession planning for key positions and critical players.But despite the challenges being faced by SMEs, they appear to be in relatively rude health: the latest SME Health Check Index, compiled by the economics consultancy Centre for Economics and Business Research (Cebr) in association with CYBG, owner of Clydesdale and Yorkshire Banks, found that the economic health of SMEs has hit an 18-month high.

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Read Ruth Holmes article on Brexit talent challenge: strategies and approaches  – which discusses how organisations are planning their response and where it leaves the labour market – in the Autumn 2017 issue of Relocate Magazine.

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