As three years from the Brexit vote approaches, Economic Graph data can help understand how the change in migration into the UK is impacting the talent landscape - increasing the risk of skills shortages but also creating opportunity for some on the sidelines of the labour market.

Today we’ve published a LinkedIn Workforce Insights report on Brexit and the UK Labour market. Over the three years since the vote, LinkedIn’s insights have seen how the UK’s attractiveness to EU job seekers was hit, and how the country became a net exporter of talent in 2018. 

This report takes a longer view, looking at job seeking and migration since 2016, but also surveying recruiters and talent professionals working in the UK to understand how the environment they are working in has been changed by these shifts of perception and changes to talent availability.

1. Access to EU talent is diminishing

Our data shows that the UK is becoming less attractive as a place to work for job seekers from the EU. The number of international views of UK jobs from EU 27 countries, which declined after the referendum vote, continues to fall - dropping from 52% in Q1 2018 to 47% in Q1 2019 (as a share of all international views on UK jobs).

Migration has also been affected. Since Q1 2016, professional migration to the UK from other EU countries has decreased by 30%. In Q1 of 2016, the UK received 11.0 EU27 members per 10,000 UK members, but by Q1 2019 this had fallen to 7.7 members per 10,000.

These statistics are backed up by sentiment among UK talent professionals: 43% of respondents say the UK is less attractive to candidates from the EU.

2. UK migration to non-EU countries has also fallen

While LinkedIn data shows that migration from EU 27 countries has fallen since 2016, the share from non-EU countries into the UK has remained steady. However, there has been a 34% drop in the share of UK to non-EU job flows - from 19.7 to 12.9 members per 10,000 (again, based on an average membership of 24.5m in the three year period between Q1 2016 and Q1 2019). The implication may be that UK residents are less likely to seek opportunity abroad during this period of high employment at home.

3. Recruiters are increasingly focusing on talent already in the UK

Faced with a smaller talent pool due to record levels of employment and diminished access to EU professionals, many organisations are considering how to compete for the best talent already in the country: three quarters (75%) are seeing an increase in businesses looking to source candidates from within the UK rather than internationally. Across many industries, increased competition for talent means that benefits are being improved: almost half of the recruiters surveyed (49%) report that businesses they work with are increasing benefit offers, such as pension contributions, and 41% are offering candidates more flexible working opportunities in order to make their organisations more attractive to potential candidates.

That refocusing on domestic talent means more opportunities for workers on the sidelines of the British Labour market – as employers extend their search into sometimes neglected pools of labour such as those who are not in the workforce – but it could also lead to an increased risk of skills shortages, and potentially higher costs to businesses and other employers.

Find the full report here.

Mariano Mamertino, Economist