Brexit - the United Kingdom's vote to bid Goodbye to the European Union has sent tremors through the global economic markets. If you were wondering whether this has any impact on the recruitment space in Britain- the answer is a big Yes! The chaos of Brexit has led to a political and economic tangle and companies are up for a hiring freeze. Let’s explore a little deeply as to how Brexit is affecting the job creation.
As a repercussion of Brexit, the interest rates are at a record low, while the government borrowing is still high. You may very well comprehend the magnitude of uncertainty and insecurity this has infused into the market. The analysts believe that the companies have had enough time to plan and strategize policies to cushion the impact. But as one would expect, the companies in all sectors are feeling anxious and have already issued profit warnings after the referendum. Businesses are wary of the economic slowdown and have started playing safe with more defensive balance-sheet strategies.
You will not be surprised to know that one-fourth of the British employers has suspended their hiring plans. The reports also suggest a steep fall in permanent hiring. Though the businesses continue hiring temporary staff, long term hiring has taken a back seat in most of the companies. The CFOs do not want to commit anything for a long term; instead, they prefer to wait and watch.
Law firms, banks and even real estate sector have cut back jobs for the graduates as a short-term measure to save money. As a result, the online job vacancies have plummeted by about 40%. But if you look at the percentage of people seeking jobs, it is up by about 36%. This is an alarming figure, isn’t it? However, the recruitment experts are hopeful of climbing the ladder soon and starting recruitment again. This should cheer up the candidates looking out for a job change. What comes as a pleasant surprise is that amidst all the commotion, the engineering and technology sectors have not been affected much, especially the export-led businesses. So all of you who have sent their resumes to companies associated with the above areas, can expect an interview call!
The experts are optimistic that the impact of Brexit will not be as destructive as it was after the Lehman Brothers collapse. Hence, people comprehending a significant economic slowdown have something to be elated about. But, no one denies a sizeable contraction in the market and a progressive reduction in business. As you must have already guessed, this will lead to reduced spending especially in the hiring department.
Weeks after the vote, people are apprehensive about unemployment and its rise over the summer. The prognosis of 5 to 7.1 percent increase in unemployment by the end of 2019 has left the public biting their nails. But as per Blackrock boss Larry Fink, the fears related to job cuts are uncalled-for. He envisages a halt in new job creation since the market is at an all-time low, but that doesn’t imply job cuts. He also predicts that this is a short-term recession, and the market will pick up soon. This forecast has come as a breather to the worried working class of Britain.
With Brexit, an undesirable impact on growth and job creation is inevitable. But professional, scientific and technical services are still doing well and are potential job initiators. However, it is believed that the net impact of Brexit will be modestly positive and help in the long run. The prospective net benefits of tailored policies and regulations are expected to assist the hiring department and create more jobs. Let’s be optimistic and hope that this storm is just a seedbed for a healthier economy with an able Prime Minister, better policies and a huge pool of jobs, benefiting both the employees and the employers alike. After all, hope is what keeps us going!