Pay and working conditions must improve post Brexit

Employers in sectors such as retail and hospitality will be forced to improve pay and working conditions if they are to attract enough talent to make up for the shortfall in European labour once new immigration rules come into force, a report has said.

A report from the Resolution Foundation said sectors heavily reliant on migrant labour tended to be lower paid and less compliant with labour rules, warning that these employers would have to do more to “entice” new workers post Brexit.

The think tank said one in seven workers in the “migrant dense” hospitality sector reported not receiving any holiday pay, while a similar number had never been given a payslip – both of which are legal rights in the UK

The report also warned that, instead of improving conditions to attract workers, labour shortages could encourage businesses to circumvent the new migration rules and hire irregular migrant workers at the detriment of working conditions.

Because labour enforcement bodies are far more reliant on workers coming forward with complaints than immigration regulators, there needed to be pathways for irregular migrants to report labour violations without fear of retribution for breaching immigration rules, the report said.

It is not only ‘pay’ or ‘good conditions’ in isolation that improve retention, but a combination of practices and conditions including senior management support, line manager development, a culture of learning and support, performance management, annual appraisals, pay and reward structures and clear communication that made a difference to the retention of staff..

According to the report, migrant workers accounted for 60% of net employment growth between 1996 and 2019. But in the last year, inflows of migrant workers had declined by almost three-quarters, from 207,000 in 2015-16 to just 58,000 in 2019-20.