Skilled labor crisis

Brexit feeds skilled worker crisis

What makes the UK an attractive workplace? Why do we face a skilled labour crisis in global trade and logistics? Latest Brexit research and tangible tips.

Markets are moving and skills are in short supply.

I have come across an interesting mass mailing in my inbox last week: it came from a recruitment specialist in the area of logistics and supply chain management. Starting off rather gloomy, it referred to announcements from different media sources and industry associations about upcoming Brexit negotiations and negative impacts on the logistics and supply chain sector.

Somewhat tired of gloom and doom news and not interested in feeding negativity, I was about to hit the delete button. But then much more uplifting news followed: Jaguar Land Rover creating 5,000 new jobs, Etihad Airways Engineering outsourcing its internal logistics processes, Clipper Logistics acquiring a new company to better manage retail returns management, and Asda investing in a new £100 million distribution centre in the UK.

This made me finish reading the mailing after all. It was, of course, ultimately promoting the sender’s recruitment services. But it’s good to see market developments and companies across industry sectors engaging and taking actions in those turbulent times for global trade. It also got me thinking again about one of my key concerns for the UK at the moment: skills shortage.

And I very much agree that it’s high time to work on this. In fact, I am not the only one worried about the lack of skilled workers in global trade and supply chain management. And even way before Brexit – take a look at my call to action back from February last year: New talent? Succession planning in international logistics.

Brexit, of course, sheds an altogether new light on the importance of skilled labour shortage. It also creates a new priority and pressure for UK businesses.

New research: what EU and non-EU workers plan to do.

Just this week, Deloitte published new research based on Brexit survey responses from 2,242 EU and non-EU workers, half living in the UK and half living outside. The report is titled “Power up” and the results further emphasize the urgency and the need for businesses to take actions. I’d like to highlight three interesting findings:

1. How many skilled workers plan to leave?

36 percent of non-British workers in the UK said they are thinking about leaving by 2022 and 26 percent are planning to move even sooner, by 2020. This represents 1.2 million jobs out of 3.4 million migrant workers in the UK – with highly skilled workers reportedly the most likely to leave. This certainly underscores the severity of a potential job crisis as a result of Brexit.

2. What would make them stay?

32 percent of skilled foreign workers said they would need to hear more positive statements from the UK government that they remain welcome in the UK before deciding to stay. Lower living costs and more initiatives to improve work-life balance were also cited. The findings are likely to increase political pressure on negotiators to ensure access to talent is maintained following Brexit.

Developments are worrying.
Developments are worrying.

3. How attractive is the UK as place of work?

The study finds that almost half of migrant workers in the UK see the country as being less attractive because of Brexit. But employers can take comfort in the fact that overall, the UK retains its appeal as a place to live and work: 89 percent of non-British workers consider the UK either quite attractive or highly attractive as a work destination. Respondents based outside the UK even ranked the country as the most desirable place to work – ahead of the US, Australia, and Canada.

Well, I’m rather happy to learn that we haven’t lost our appeal as a highly attractive place to live and work. But there is much more we must do in order to a) retain and b) develop skilled workers in the UK. This applies particularly to jobs in global trade, supply chain management, and international logistics – where a lack of skills represents an issue already for some time. And there is no time to lose: we must act now.

Supply chain survey: third greatest challenge – lack of skills.

But whilst negotiations are only just underway and interdependence of this proposed status and reciprocated rights for UK nationals in the EU is not clear yet, uncertainty for EU workers in the UK prevails.

And as a result, as the Deloitte survey demonstrates, particularly highly skilled EU workers in the country are prepping their CVs and are looking for alternative options.

In global trade and international logistics, such news is hitting hart. And supply chain managers are under no illusion either: the Chartered Institute of Procurement & Supply (CIPS) published research study results in May, featuring survey responses from 2,111 supply chain managers.

When asked about greatest challenges, 33 percent of respondents cited the lack of supply chain expertise and knowledge in the UK to draw upon – ranking it third overall. The Deloitte report on the UK as a workplace offers four recommendations for measures to ensure shaping the UK workplace for future prosperity:

  1. Create a new immigration system that recognises the personal choices of international talent
  2. Invest further to upskill both current and future workers
  3. Embrace digital and invest in the deployment of technology to automate repetitive tasks
  4. Work at a regional level to create an appropriate local response

In its conclusion, the Deloitte study stresses the importance and urgency for policymakers, educators and businesses of all sizes to come together to address the potential challenges and opportunities in the UK workplace, to raise proficiency in core skills, and improve productivity.

Digitisation to the rescue: business continuity through automation.

I would like to emphasize point 3 in Deloitte’s list of recommendations on embracing digital environments and automating repetitive tasks. It’s equally important, of course, for UK businesses to further train and educate existing staff, and create work environments that attract new talents in the global trade and logistics sector.

But at the same time, tapping the potential of digitisation to ensure business continuity in this turbulent business and trade environment is crucial. And it’s a tangible measure that will deliver immediate business improvements and benefits – regardless of Brexit negotiation outcomes.

The CIPS industry survey also found that 23 percent of UK participants have not initiated any preparatory measures for Brexit yet. To be honest, this number surprised me. And the many discussions I have had with businesses engaged in the international trade across industries, lead me to believe that the estimated number of unreported cases is much higher. But even 23 percent is 23 percent too much. We all need to prepare – now!

Digitisation attracts skilled workers.
Digitisation attracts skilled workers.

Digitisation, conveniently, drives several objectives: achieving efficiency, increasing competitiveness, lowering costs, and creating a more attractive workplace. And also in light of an expected temporary “skill drain” from the UK following Brexit, automating tasks and reducing the reliance on human skill sets, seems a good idea, too.

There are numerous tasks in international supply chain management that lend themselves extremely well to automation. Especially in the area of global trade, which will be subject to many changes under Brexit.

Getting started: tangible business tips for global trade processes.

It’s really become an urgent matter to kick off now. But where? There are many areas and businesses need to prioritise – there is no one-size-fits-all solution. Take customs declarations, for example: volumes are expected to significantly increase with Brexit – fivefold from current volumes, as reported in March. In the area of customs, the UK government is not only facing challenges under Brexit, but also from managing a massive IT project to change from the current HMRC system CHIEF to the new system CDS in 2018.

As such, this is a perfect area for UK businesses to start future-proofing their businesses. The article “Before or after Brexit: why supply chain success depends on global trade and customs procedures” published by Manufacturing & Logistics IT in June explains this in more detail.

Some businesses currently manage customs processes in-house, mostly based on manual work by own global trade experts. Others use different customs systems across their organization to manage it. And there are also those working with service providers and customs brokers.

But regardless of strategy, things will change under Brexit for all of them. For those of us working in global trade for some time now, we well know that Brexit is just “another change”.

The global trade environment has always been and will always be subject to dynamism and constant change. In this day and age – the digital age – we may actually consider ourselves lucky, because there are also so much more opportunities.

Maybe that’s the reason that many UK businesses still hesitate to prepare themselves: the number of options on how to tackle the change is too high? There are good tips on how to get started in AEB's Brexit Tool Kit online. 

Where does your organisation stand? How far along are you in your preparations? I very much would like to engage on discussions and hear your view – here, or connect with me on LinkedIn.