Tory infighting, cabinet reshuffles and deals at Chequers are still being thrashed out, but time is running out. Although a no-deal scenario is the doomsday scenario that all parties are hoping to avoid, Trade secretary Liam Fox was recently quoted as “seeing a no-deal Brexit as a 60-40 chance”. A no-deal scenario with its awkward implications is now no longer something that can be dismissed. Should the UK reach an impasse and no deal is reached by 11pm on the 29th March, what would be the immediate implications for the Construction industry on the 30th March?
In short, a no-deal Brexit would mean that free circulation of goods and persons between the UK and EU would cease overnight, with a probable scenario including lots of new red tape as well as a high likelihood of delays for getting labour and material into the UK – which will both probably cost more in sterling and time. These will almost certainly go hand in hand with delays, disruption and cost overruns – not exactly circumstances the industry craves.
Furthermore, with Brexit approaching, construction employers are rightly expecting the recruitment of skilled workers to get harder as they anticipate restrictions on access to migrant workers. The overnight border controls that will be introduced will almost certainly act as a barrier to workers wishing to emigrate to the UK, with the hiring of a worker from Madrid or Munich to very suddenly resemble hiring someone from Madagascar.
However, few employers are making firm plans to address this and instead are focusing on retaining their existing migrant workforce, with research of more than 400 firms from the Construction Industry Training Board (CITB) indicating that this employee retention is the most important aim for employers. With an estimated 158,000 construction jobs to be created between now and 2022, this is an unsustainable plan and it is critical that the industry works together to deliver a solution if a no deal Brexit is delivered.
The construction industry has had a very rough decade and still hasn’t fully recovered from the 2008 recession. Fallout from the Carillion debacle and the Grenfell tragedy continue to make headlines, profit margins remain uncomfortably tight, risk remains high, the skills shortage is getting worse and competition from new entrants and technology looms large.
Add to that melting pot the potential that a no-deal Brexit would impact on the pipeline, given how much construction and infrastructure funding originates from EU budgets, and you could be forgiven for thinking that the industry is facing a potential crisis.
But this is not entirely the case. Whilst it cannot be denied that the industry faces turbulent times, the construction industry can and will continue to be a catalyst for economic growth. For every £1 spent on construction, the economy benefits to the tune of nearly £3, with even higher returns for infrastructure projects, which places it in prime position for some much needed Government investment when the new rules come into force.
Furthermore, solutions to solve the labour shortage are already being mooted. For major projects to the scale of HS2 and Thames Tideway, some countries, including Dubai and Qatar, implement a visa system, with companies that win contracts allocated a set number of visas to guarantee enough talent to complete the project successfully. This sort of system will likely have its own set of complications, but should they be overcome, would certainly ease the burden on many suppliers looking to retain reasonable completion times.
However, with the talent pool likely to be drained regardless of the Brexit outcome, it will be vital for employers in the construction industry to engage with recruiters who not only know the market inside and out, but can also resource the right level of candidate to ensure smooth workflow is achieved. Without this resourcing expertise, the threat of missing out on the highest calibre candidates can become a real and present danger, threatening company productivity, profitability and efficiency.
We have already taken significant steps to ensure that our service level will not drop, regardless of the Brexit outcome and we remain confident that Unite People will be able to add real value to the people and companies who choose to partner with us.
It has long been part of our vision to help contribute to the development of the Construction Industry by connecting top talent with innovative businesses. This vision feels particularly apt as we approach one of the largest landscape changes the industry has seen in decades.
Unite People are fully prepared for all outcomes, we look forward to helping your business navigate the first few days and months of Brexit, and to thrive in the years that follow.
If you’d like to begin planning for your company’s future, please speak to our consultants in London (02038 927 852) or Leeds office (0113 487 8830). Available to talk at all times, by phone or email (firstname.lastname@example.org), they will provide professional advice free of charge, to ensure your business remains on course both pre and post Brexit.
We look forward to hearing from you.