Where a Brexit will affect IT contractor recruitment

Whether they’re going to vote ‘leave’ or ‘remain’ on June 23rd , many of my colleagues in the IT contractor recruitment market agree that the temporary market for IT opportunities will change in two main areas if Britain renews its vows with the EU, or divorces from it, writes Tim Jacob, operations director of ReThink Recruitment.

The first impact relates to our employment legislation. EU employment regulations have been passed into UK law long ago and, as a consequence, the legislation would continue to apply at the point of Brexit. But any Brexit decision, and the ensuing process, would mean any changes to this country’s legislative framework would be for the UK Parliament to decide without recourse to the EU or its regulations, as our parliament sees fit. There is a number of oft-quoted pieces of employment legislation that are borne out of EU regulation, many of which we now take for granted and have been part of our working lives for many years. 

It begs the question whether changing (and even repealing) laws covering areas like anti-discrimination, the equal treatment of men and women in the workplace, Transfer of Undertakings (TUPE), and maternity or parental leave would actually be popular with the UK electorate. Interestingly, some of these were actually pioneered by UK practice. Do you want them changed, or repealed?

Before you vote, it's also important to consider how changes to the working time regulations and Agency Workers Regulations might be made, but it’s true to say that these frameworks are more controversial for some business sectors than others. Nonetheless, in the event of Brexit, the UK government, the civil service and legislature will be faced with an enormous collective task of working through EU legislation and UK law, and it is likely to set priorities based on the politics of the moment. In short, the mood that emerges may have far-reaching consequences.

With more certainty, I can say that any changes to the professional and temporary IT labour market in the UK after the EU referendum is likely to take some time to impact both practically and legally. The end of the two-year exit process, if a Brexit takes that long to fully achieve, would also be overshadowed by the beginning of electioneering for the next UK general election -- however there are suggestions that a Brexit outcome may well trigger this sooner.

The second main issue that comes to the fore when IT recruiters and contractors discuss whether leaving or remaining is better for Britain is immigration. This has clearly been a dominant issue in the debate since it started (and before).

Today’s UK workplace contains a diverse set of nationals. If the vote were to go in favour of Brexit, the Vienna convention would assume that existing migrants from the EU in the UK would have the right to remain. But questions abound as to whether the two-year exit process would result in a new influx of migrants from the EU, trying to get ‘under the wire.’ Many UK-born professional job candidates in work or looking for it in this country are asking; how would they and their prospects be affected by such an influx?

Yet there’s a consensus now forming that the UK government’s policy on non-EU migration will result in the likelihood of a similar set of criteria applying to new EU migrants. This would inevitably mean a lower number of EU nationals entering the UK.  In addition, the current system for non-EU migrants has also lowered the number of new arrivals and is seen by many to discourage migration to the UK -- the quota for highly skilled migrant visas has not been met in many years, for example. 

The upshot is likely to be increased headwind for businesses that rely on a highly-skilled talent base in the UK. One obvious solution is for such employers to simply hop across the Irish Sea and set up their business there. That way, they can enjoy easy access to EU labour and markets in the short term, while the long process of renegotiation of the UK relationship with EU is played out. Rethink Group’s Irish business, Berkley, accounts for about 10% of our current contractor work in the EU; this proportion may well change during the exit process, although this is likely to take time to unwind if the prediction of a two-year Brexit process rings true. 

It is also difficult to predict what a Brexit vote might mean in terms of demand for IT contractors, especially as there has been some broader narrative in recent months about the ‘unknowns’ ahead and how these may potentially adversely impact appetite for such freelance techies. 

And this is my belief too -- ultimately, any change to the UK relationship with the EU is bound to be followed by a period of uncertain demand for IT contractors, and likely reform to the two areas I’ve explored here, immigration and employment legislation. But just like any other union or marriage, it’s not as simple, straightforward or one-way as that.  Indeed, IT contractor demand may actually increase in the short-term if there’s a Brexit, due to the launch of projects relating to changes in technology systems as a result of us all being in a completely new operating environment.

Editor's Note: Related Reading -

UK quits EU in historical 'Leave' vote

Contracting in the EU? Keep Calm and Carry on

Brexit decision: how UK contractors are affected