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5 June 2018, 12:43

Charities need to prepare for their workforce after Brexit

Today we are launching a report which we commissioned from the Institute of Public Policy Research on the potential impact of Brexit on the charity workforce. The report is free to download and we hope that it helps organisations with their future plans.

Although charities are not as dependent on EU workers as the private and public sectors, they still make a considerable portion of our workforce. Around 31,000 EU nationals work in the charity sector according to this research. Most of them are concentrated in London and they work across a range of areas: social work, residential care, education and membership organisations tend to be the most common.

Despite their significance, there has been little in the way of government proposals about what the future will look like after Brexit. On the one hand, this is concerning as charities need to make efforts now to prepare for what the future may hold. On the other hand, it is an opportunity for charities to shape the immigration system so that it needs the needs of beneficiaries in the years ahead.

Even if your charity does not have any EU nationals working in it, you could still be impacted. Here are my three top takeaways from this new research.

1. The non-EU workers regime would not work for charities

You might think that it would be as simple as making the rules that apply for non-EU nationals apply for EU nationals. However, IPPR’s analysis has found that if this was to happen that 82% of EU charity employees would not eligible. This is because of their roles as not considered skilled enough or they don’t pay enough to hit the salary threshold, or both. In social work and residential care, this increases to 87%. Simply put, the current non-EU workers regime is not fit for purpose. The government needs to make sure that the needs of charities are considered and we don’t get an immigration system solely designed to meet the needs of the City of London. IPPR has a number of recommendations for how this could be brought about, and CFG will be taking these forward as part of our ongoing discussion with government on immigration issues.

2. This isn’t just about 'low-skilled' jobs

Although social work and residential care are critical areas for our sector, it would be unwise to consider this as just being about low skilled jobs. IPPR’s research has found that on average EU workers in the charity sector are higher skilled and earn slightly more than their UK counterparts. Like the rest of our economy, the UK’s world leading charity sector has attracted talent from across Europe and we have used this talent to help make a bigger impact for beneficiaries.

3. Skills training is not going to happen on its own

An obvious solution to the potential drying up of EU workers would be for charities to train up UK nationals to take on the roles occupied by EU nationals. Undoubtedly, charities have to do more to train new staff. But this isn’t just going to happen on its own.

Charities will need support to do this. Poorly designed policies such as the Apprenticeships Levy have sucked money out of the sector which could otherwise be put to use training up the next generation of UK workers. The IPPR has called for the government to reform the Apprenticeships Levy prevent funds paid by charities going to private companies and at least staying within the sector. This is in line with what CFG has asked the government to do in its responses to the Levy. They have also asked for government to consider a broader skills levy. Charities are more likely to say that funding is a barrier to training compared with other types of employers, this is because most funders won’t pay for training that isn’t strictly necessary for the job at hand.

The government needs to invest in skills or at least create policies that focus investment in those sectors that need it most, like charities.

Preparing for a range of scenarios

It is tempting giving the uncertainty of Brexit to do nothing because we cannot be certain about what is going to happen in the future. It is true that we don’t know what is going to happen exactly, but it seems clear that we will have to get used to having fewer EU workers in the UK going forward. How much fewer will depend on the final political settlement.

We also can’t be certain about whether EU workers will stay – research by NCVO says that they might be leaving because of uncertainty about the future and a desire to stay in the single labour market of the EU.

If you depend on EU workers, then you need to plan for how you will get the skills you need. Will you need to pay more to keep hold of workers? Will you need to train up existing staff? Do you need longer term pathways such as apprenticeships or graduate training schemes? How can your organisation invest in technology to reduce dependence on labour?

For those that don’t have EU workers, there will still be an impact. A tighter labour market tends to mean higher pay. It may also lead to poaching of staff from organisations which had been relying on EU workers. London is going to see a particular squeeze on labour, so we may see a sucking effect of staff towards the capital leaving gaps in the region. The fact is that organisations which have been relying on EU workers are not going to stop hiring people, so there will be a ripple effect across the charity sector.

The main message is to plan now, not later.

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