Implications of Brexit
On 29 March 2017, the Prime Minister officially triggered Article 50 and began the two-year countdown to the UK formally leaving the European Union.
The energy and utilities sector now faces new political uncertainty, in addition to existing workforce challenges. The labour market implications are critical for our sector and we need to do all we can to ensure that our workforce is agile and resilient.
The State of the Labour Market
Energy & Utility Skills’ analysis of recent data published by the Office for National Statistics indicates that the UK’s labour market is arguably tighter than at any point since records began:
- The proportion of people aged 16 to 64 in work (the national employment rate) reached their highest levels in March 2017 at 74.8%. At the same time, the unemployment rate has fallen to its lowest level since July 1975 at 4.6%
- The lack of labour availability is also reflected in job growth across the economy. In the 12 months to December 2016, the number of jobs in the UK economy has grown by just 1.6%
- During the same period, however, the number of jobs in the water supply, sewerage and waste management sector has grown by 8.3% and the power and gas sector grew by 7.9%
This means that our sector is facing intense competition for many of our core skills, rising labour costs and ongoing difficulties in attracting sufficient new recruits.
Please view our ‘Brexit Dashboard’ for a summary of the latest intelligence on the state of our labour market as we approach Brexit. It shows that employment remains at a record high, with growth similar to the relatively strong rates seen over most of 2017, bringing the employment rate back to a joint record high (since 1971). Unemployment decreased, returning the rate to a 42-year low. This will result in the tightening up of the labour market and costs of employment rising as we approach Brexit.
As many as 65%(i) of the predicted vacancies in our sector will be required to come from the UK’s general labour market. We track the labour market movement as we progress to Brexit.
EU Nationals seeking work in the UK
- EU nationals migrating to the UK down by 47,000* ii
- EU nationals emigrating from the UK up by 28,000* iii
- Unemployment levels are the lowest since 1975 at 4.2% iv
- Less than 1% people claiming Job Seeker’s Allowance were seeking work in the energy-related occupations on the UK’s Shortage Occupation List (545 of 475,000) v
Employment levels and labour costs
- Highest level of employment since records began at 75.7% vi
- Gross weekly full-time earnings have increased by 2.6%* vii
- University applications fell by 2% in the UK* viii
- Only 1% of higher education leavers choose to work in the energy and utilities sector xi
* Year on year figure
- i EUSG (2016) Workforce Planning Research Results
- ii ONS (2018), Migration Statistics Quarterly Report: February 2018
- iii ONS (2018), Migration Statistics Quarterly Report: February 2018
- iv ONS (2018), UK Labour Market: April 2018
- v ONS (2018), Job Seeker’s Allowance by occupation, March 2018
- vi ONS (2018), UK labour market: April 2018
- vii ONS (2018), Annual Survey of Hours and Earnings: 2017 provisional
- viii UCAS (2018), Summary statistics of applicants (2018 cycle, table F.2)
- xi HESA Destinations of Leavers Survey and Student Record 2015/16
Preparing for the Future
We need to ensure that our labour market is flexible and resilient and, above all, meets the needs of employers. In order to achieve this, Energy & Utility Skills will continue to implement the measures set out in the sector’s Workforce Renewal & Skills Strategy.
We recognise the significance of Brexit for skills, workforce renewal and wider employment issues in our sector and will track developments closely. To help with this, we have created a Brexit Timeline detailing events and milestones as the UK and EU negotiate Britain’s exit.
Please view our Brexit Timeline where we are tracking the latest developments.
Find Out More
To find out more about membership and our Brexit analysis work, please contact us on 0845 077 99 22 or email email@example.com.
For all press enquires visit our Media Centre.