Food, Hospitality And Construction Employers Worry About Labour Shortage After Brexit

Food, construction and hospitality companies are worried about a dwindling labor force if Brexit puts an end to freedom of movement, according to a study by the National Institute of Economic and Social Research. The report cites concerns about the welfare of EU migrant employees, including their job security and right to remain in the country.

Some employees in the construction sector assumed Brexit would result in redundancies as contracts were withdrawn or the sector went into a recession. The most prevalent fear was that there would not be enough EU staff to meet business needs.  

A number of employers said restrictions on the number of migrants in low skilled work would exacerbate their long-term and chronic recruitment difficulties and labour shortages. Some, particularly in hospitality, were not only concerned at the number of employees they could recruit, but their quality. A number said that, with fewer EU migrants available, they will need to be less "picky" and this would inevitably impact employee quality. 

Despite the emotional upheaval, only two actual business reversals were cited: A construction consultancy saw two residential housing projects withdrawn and was expected to reduce its workforce, and a hotel chain was planning to expand into the Lake District but was now concerned whether it would be able to recruit the staff needed.

Even before the referendum, UK construction activity had contracted 0.4% while the rest of the economy grew by 0.6%, so some firms were already revising their business plans. It is possible that the food and hospitality industries find their equilibrium before construction companies, which now face higher building costs as well as a potential labour shortage.