The Post-Brexit Recruitment Challenge for the FMCG Sector
Fears about an upcoming Brexit migration crackdown plague a number of sectors in the British economy, including the fast-moving consumer goods sector, or FMCG. The food industry in particular is warning that a Brexit workforce shortage could have a catastrophic effect, leaving as many as a third of its businesses no longer viable.
In a recent survey carried out by the Food and Drink Federation, 31 percent of businesses in the “farm-to-fork” supply chain had already seen EU workers leave the UK. Moreover, the entire fast-moving consumer goods sector faces a rapidly approaching workforce shortage and skills gap.
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Freedom of Movement: The Effect of Restrictions
Freedom of movement is perhaps one of the most important areas for negotiation between the UK and the EU. It’s a politically sensitive topic and it has wide-scale ramifications. Any migration restrictions could have a significant effect on the FMCG sector. A transitional period could extend the period of free movement of people within the EU. However, the government looks set on ultimately introducing a points-based visa system once the transitional period is over. That could have huge effects for the movement of low-skilled workers who are currently taking jobs in the FMCG sector.
Office of National Statistics (ONS) figures suggest that fruit and vegetable processing and the hotel industry are among sectors of the economy facing the worst damage if free movement of people ends.
It’s no wonder that many in the industry are concerned. The Grocer reports that UK food and drink suppliers are ill prepared for Brexit. The annual study of the largest 150 UK food and drink suppliers lays bare the labor challenge facing the industry. Capital expenditure and productivity has dropped already. And that is prior to the tightening of the EU labor supply.
The challenge for businesses in the FMCG sector lies in future strategy, recruitment, investment, supply chain disruption, and any future changes in the law as a result of leaving the EU. Huge changes are afoot and businesses will need to adapt to survive.
So, how can businesses in the FMCG sector plan for a viable post-Brexit future?
Recruiting from Within the UK
According to industry groups and business owners, the collapse in the pound since the Brexit vote is already making it increasingly difficult to attract non-skilled EU workers to the UK. It’s a less financially attractive proposition for EU workers. What’s more, many EU nationals feel less welcome since the Brexit vote.
For FMCG businesses to survive the blip in available labor, they will naturally need to source more workers from within the UK. Planning ahead is crucial for businesses in this sector, and the use of recruitment agents, such as Lime Talent, may be one part of the solution.
Why Recruiting from Within the UK Is Harder Than It Seems
While recruiting staff from within the UK should be relatively straightforward, the fact remains that in May alone this year, there were 1,500 unfilled vacancies on British farms. Fruit picking, just one element of the FMCG sector, is labor-intensive. Many farmers report that it is nigh on impossible to find British workers willing to do it. Unemployment levels in growing regions are also at a historic low.
In an interview with The Grocer, Steven Munday, CEO of trade body British Apples & Pears, said, “A cultural shift is needed in all first world economies to change the perception of working on the land.” If the FMCG sector is going to overcome the labor shortage caused by Brexit, it needs to be at the forefront of promoting this change.
Upskilling the UK Workforce
Business leaders in the food supply chain are aware of the expectation to reduce reliance on EU workers. They are therefore focusing on upskilling wherever possible locally within the UK. There is now a strong emphasis on building skills through apprenticeships. However, there are record high levels of employment in key geographical locations. Therefore, there is still the question of whether local labor will be available for the roles that need to be filled.
In an interview with The Grocer, Laura-Jane Rawlings, CEO of Youth Employment UK, which helps young unemployed people find work, said, “Growers are missing a trick by not targeting young Brits to work on farms.”
It is up to those in the FMCG sector to think more strategically about enticing people into the industry. Housing is a massive issue for young people. Projects tying up cheap accommodation with employment could be the carrot our young people need.
Automation of Processes
Within the FMCG sector there is already talk of how to counteract the possible skills and workforce shortage posed by an EU migration crackdown. The Food and Drink Federation argue that it is vital the change is carefully managed and transitioned. There is an urgent need for investment in technology to support automation and reduce the reliance on EU workers.
The UK has some excellent knowledge and skills in automation and robotics. This could prove attractive for inward investment. The UK also currently has favorable corporation tax, which investors will also take into consideration.
A Sense of Urgency
It is far from clear exactly how Brexit will affect the hiring of people in the UK. Moreover, it is unclear how it will otherwise affect businesses in the FMCG sector as well. What is clear is that FMCG businesses need to start planning if they are to avoid a recruitment crisis. Attracting investors and engaging with and nurturing talent needs to start now.