The latest ONS labour market statistics, published earlier this week, have highlighted a dramatic fall in the number of EU-born citizens in employment. The results show that the number of EU-born workers fell by 495,000 between January-March 2020 and July-September 2020, representing a fall of more than 20% and erasing more than five years of employment growth among this group. In addition, the number of non-EU-born workers in employment has seen a more modest fall of 227,000, which is offset by an actual increase in the number of UK-born workers in employment (+221,000).

With the rate of inflow of EU workers due to remain subdued in the foreseeable future due to the ending of free movement and the coronavirus pandemic, the CIPD has warned that an urgent and substantial injection of skills investment is required to help enable more UK jobseekers to fill some of the vacancies that the reduction in supply will create when the economy recovers.

Gerwyn Davies, Senior Labour Market Adviser at the CIPD, said:

“The fall may in part reflect the high concentration of EU nationals that are employed in worst-hits sectors, although it is far more likely due to more Europeans finding it easier to work or seek work in their home countries as a direct result of the pandemic. This won’t concern employers too much in the short-term while recruitment activity remains weak. However, the worry is that many EU citizens won’t flow back to the UK now that they have secured their status, which is likely to feed into recruitment difficulties in the medium-term.

“The good news is that this should force employers to make full use of available UK workers, especially those recently made redundant with relevant skills and up-to-date experience. This may partly explain why we have seen the UK labour pool grow since the pandemic.

“However, as the Bank of England recently warned, UK employers are not currently able to make the most of this potential due to a mismatch between the skills of those looking for jobs and the skills firms require, particularly in parts of the economy that continue to grow.

“To help tackle these challenges, CIPD is calling for government to invest £1bn in sector-based skills and employability training and support modelled on the successful US WorkAdvance scheme and to significantly boost its investment in the National Retraining Scheme.

“We are also urging government to reform the apprenticeship levy so it can be used to fund other forms of accredited training and skills development. Our research shows employers would use a more flexible training levy to provide training for staff being redeployed and for those working reduced hours while on furlough, as well as to provide training to people who have been selected for redundancy to equip them with the skills to find work.”