The Budget wish list: staying at the heart of talent issues in a globalised world
03 March 2017
This will be a critical Budget – the last before Article 50 is triggered and we begin our exit negotiations from the EU. On 8 March, all eyes and ears will be on the Chancellor, and top of the current wish list for most businesses will be clarity on how the UK will migrate to an business environment where we are no longer linked to the EU – but what might that look like in terms of the movement of people?
Perhaps we shouldn’t hold our breath. We can’t expect Mr Hammond to pull the solution to post-Brexit talent mobility, rabbit-like, out of a hat. So it’s up to employers to prepare, plan and put themselves in the best possible position for the future. There are plans to be made, and time is short.
Let’s look at what we do know. We know that competition for talent is intense. According to our latest CEO survey, almost two-thirds (63%) of business leaders are planning to increase headcount in the coming year. That’s a lot of competition, so it’s not surprising that 77% now see the availability of skills as the biggest threat to their business.
We also know that UK employers will have to rethink where they find talent. It’s looking increasingly likely that after Brexit, there will be more constraints on workers moving into and out of the UK. For the past 40 years or so, the UK economy has been built around freedom of movement within the EU; if that’s restricted, employers who are reliant on overseas talent and labour will have to adapt to a world where there’s a more even playing field for talent from Europe. The phrase that often comes up is that they have to source talent from ‘the rest of the world’ but we should remember the scale of the labour market that’s out there. It’s not the ‘rest’ of the world that will be the marketplace, but most of the world.
And it’s quite a marketplace. Thanks to global demographics, the principal source of talent will shift to emerging economies in the next few decades. According to the OECD, the world’s population will increase by 1.6 billion people by 2034, but 95% of them will be born in developing countries. That’s a huge pool of potential talent and future leaders, in markets that most western employers are currently failing to exploit.
This isn’t an insurmountable problem for mega multinationals but for those organisations – and there are many of them – that aren’t used to sourcing talent overseas, where to start? A concerted effort to recruit in geographically distant shores won’t be easy; it takes research, investment and hard work, not to mention a strong employer brand and a culture that’s attractive to potential and current employees.
And there’s more. If Brexit results in a restriction on labour movement, this will also affect businesses at home; those in sectors that are most reliant on overseas workers, such as hospitality, agriculture and healthcare, and those that are not. The unemployment rate in the UK isn’t high; so should we expect the price of labour to rise? If it does, this is likely to accelerate the changes that we’re already seeing in the workplace, such as digitisation and automation, as businesses adjust their workforce strategy and delivery models to cope with the new normal. And that comes with challenges of its own; it will change the types of skills organisations need and change the culture of the business.
We often talk about the need for businesses to be agile, but this is a whole different ball game – employers need to be ready for anything and open to new ideas and strategies. Are you?