By Sander Poos, Managing Director of Europe for global expansion solutions provider Velocity Global, looks at the challenges UK firms face when looking to recruit EU nationals after Brexit, and how flexibility in searching is vital.
The new skills-based immigration system now governs employment laws in the UK, meaning EU migrants are subject to the same requirements as everyone else around the world in applying to live and work here.
Candidates must apply for government permission and meet the entry requirements set out by the new points system before they can take up a job and move.
For employers, this adds time, complexity, and cost to the import of fresh talent from the EU. Businesses shoulder the regulatory complexity and application cost for a skilled worker licence, with a price range from £940 to £1,476, depending on the size of the company.
Ultimately, time will tell how the new process impacts hiring in the UK in the year ahead. But, the relatively painless experience of recruiting from the EU is now a thing of the past.
With this in mind, firms that still want to tap into the EU talent pool need to think differently about how they do it.
Learning from Covid-19
The pandemic is the catalyst for a mindset change in recruitment. While 2020 was a tough year, the closure of offices across the country and around the world resulted in many working from home. With this becoming the norm, businesses are more equipped than ever for remote working.
This move changed people’s attitude to the world of work. A recent YouGov survey found that only 7% of employees want to return to the office full-time after Covid-19 restrictions are completely lifted.
Businesses, too, realise remote work does not affect productivity, and many now embrace it. We already see the likes of Twitter, Facebook and Nationwide introduce permanent work-from-home policies.
The mood changed simultaneously in just about every industrialized nation in the world with an internet connection. Both employees and employers learned to appreciate the benefits of flexibility. Businesses think even more expansively, and not just in terms of employees working from home, but from anywhere in the world – be it Birmingham or Berlin.
The new way to hire EU talent
The Chartered Institute of Personnel and Development (CIPD) estimates that more than two thirds of businesses will continue to recruit EU nationals after Brexit. With the newfound global appreciation for remote work, they can tap into the talent pool without relocating them to the UK – avoiding immigration cost and complications.
What once was a life change for the EU worker relocating to the UK, is now a hiring change for the UK firm recruiting EU talent in their home country. UK companies that hire remote workers in the EU must ensure compliance, from taxes to benefits. Establishing a foreign entity is likely not the most cost- or time-efficient option, especially if the business hires remote workers in multiple countries.
Additionally, Brexit adds additional challenges for a UK national to open an entity in the EU. For instance, to incorporate a business entity in the EU, a local national, citizen, or resident of the EU or member state of the European Economic Area is usually required. Currently, UK nationals do not fall into these categories.
UK businesses seek flexibility to hire top remote talent. In the run-up to Brexit, British companies learned flexibility was paramount as policies shift, change, and extend past deadlines.
The remote work shift of 2020, combined with Brexit, did not immediately translate to increased budgets to set up new foreign entities. An Employer of Record (EoR), sometimes called an International Professional Employer Organisation (PEO), is growing in popularity for its flexibility and speed.
The EoR utilises its existing global infrastructure in the desired country to employ workers on a company’s behalf so it does not have to set up a foreign legal entity in-country.
The shift is underway
In 2020, our clients added more than 50% additional supported employees in the EU than in the previous year. Among those EU countries, Spain topped the list for both client growth and supported employee growth. Our client base grew by more than 80% in Spain in 2020, and the number of supported employees grew close to 90%.
Talent in Spain is typically more affordable than other EU countries and the country experienced stable economic growth due to its attractive talent pool.
Brexit and Covid-19 have both changed the hiring game. EU employees want to work remotely and UK businesses want to avoid immigration hassles. It’s a mutually beneficial shift for businesses ready to seize the moment.