How business models might have to change as a result of post Brexit labour shortage

The UK government has introduced a points based immigration system that aims to restrict immigration to so called highly skilled workers.  We are yet to see how this will be implemented in practice but if we assume that the restrictions on immigration will result in greater competition for talent, what can businesses do to prepare for this?

  • All businesses should anticipate a gradual increase in labour cost as scarcity drives wage inflation: whilst certain sectors will be hit harder than others, it’s likely that a ripple effect will mean that everyone is affected to some degree.
  • Consider what your optimum personnel structure would look like if you were to start your business from scratch today. Do you really need all the staff you currently have?
  • Research all industry/sector relevant technology to establish if you can introduce new software that can drive staffing efficiencies and automate certain tasks.
  • Stripping out of middle management: can your business operate effectively with a flatter management structure?
  • Productivity: research has shown that specialist roles, where employees are focusing on a narrow area of work all the time can be much more productive than where they are asked to multi task. Can work teams can be re-organised to create greater productivity per unit of manpower?
  • Measurement of productivity: professional services firms require staff to complete timesheets which enables productivity to be measured easily. Businesses that lack objective measurement tools need to look at what software is available that might best suit their sector to give them better feedback over productivity and weed out or combine unproductive roles.
  • Training programmes: review your current approach to training and developing graduates and school leavers. Can progression be accelerated through more effective mentoring/demanding more of your junior staff so that they can perform higher value roles while their labour cost is still relatively low?
  • Marketing roles: how can you improve your employer branding (how your company is perceived in the employment market) and increase direct recruitment to make your firm a favoured choice compared to the competition.
  • Remote hires in lower cost regions: can you recruit certain roles from lower cost areas of the UK to work remotely? If so, you will need to consider how to indoctrinate new remote hires into the culture of the organisation.
  • Trading wages for greater flexibility: can you keep costs down by tailoring employment packages to employees’ desire for lower working hours? Certain roles may only require a 3 or 4 day week and pay can be tailored accordingly. Have you considered an annualised hours approach (where staff work a set number of hours a year and receive the same monthly pay but work more hours in busier times and fewer hours at quieter times)?
  • Covid silver lining: Covid has already forced many companies to adopt tech efficiencies to allow them to cope with home working.  For example, professional services firms have seen their reliance on administrative staff reduce significantly as offices have been forced to become paperless.


COVID has shown many ‘change resistant’ businesses that change is possible in a very short space of time. Although resistance to and fear of change is a natural human trait, every business in the land can point to the experiences of the last year as evidence that when change is forced upon us, we can, more often than not, find a way to cope and even thrive.

The post Brexit human resource landscape will be a challenge for many UK businesses but those who acknowledge and embrace the challenge have the opportunity to put themselves significantly ahead of their competition.

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