A ‘disorderly Brexit’ could see the UK’s logistics sector suffer a £6.7 billion reduction in economic output, new research suggests.
The report, developed by workforce management expert Quinyx in collaboration with Development Economics and Censuswide, includes economic analysis of ONS data and findings from an employer sentiment survey of 1,008 senior decision makers in UK firms that hire blue-collar workers.
It highlights the importance of these workers to the UK economy, and the severe impact Brexit uncertainty will have on their jobs.
Manual and elementary staff shortages are predicted to be felt most acutely by the logistics sector under a disorderly Brexit – potentially leaving some of Britain’s biggest businesses exposed.
As part of the research, Quinyx compared the predicted growth and economic output of the UK’s blue-collar workforce in the logistics sector under both a disorderly and an orderly Brexit scenario.
The study found that the increase in economic output generated by the UK’s logistics workers (in manual roles) would be £9.8bn per year by 2024 under an orderly Brexit, compared to £3.1bn under a disorderly Brexit. This equates to a 68% reduction or £6.7bn loss per year.
The decrease in economic output would come from a lack of access to manual workers in the logistics sector, such as truck drivers, packers and warehouse workers. This would come primarily as a result of uncertainty around, or lack of, immigration policies.
The research found that in the event of a disorderly Brexit, London, the East of England and the South East will see the greatest reductions in available workers and economic output.
It also reveals that under any Brexit scenario employers in the UK’s logistics sector expect to lose – on average – 21% of their blue-collar workforce as a result of the UK’s departure from the EU, with 13% saying they expect to lose 31% or more.
Despite this, 16% of logistics businesses have no plan for managing their future pipeline of these workers post-Brexit.
Mansoor Malik, managing director UK & International at Quinyx, said: “The impact that a disorderly Brexit will have on the UK’s truck drivers, packers and warehouse workers as well as the logistics businesses that employ them is concerning. Access to manual workers is crucial for ensuring the UK’s economic wellbeing – and employers, especially those in the logistics sector, need to make plans to avoid staff shortages in the future.
“A first step for employers facing staff shortages is looking at ways that they can bridge the gap between supply and demand. Given the degree of uncertainty on the horizon, seeking out new ways to attract and retain domestic workers should be a primary focus.”
The research also found that difficulties accessing blue-collar workers as a result of Brexit are likely to be further exacerbated, as logistics employers already face challenges in recruiting and retaining them.
More than a third (38%) of employers in the logistics sector with a manual workforce currently struggle to recruit these workers, with 44% reporting that they struggle to retain them.
Some of the main barriers to the recruitment and retention of these workers in the UK are unsociable hours, low pay, and a lack of progression.
Lack of flexibility was also cited by 17% of logistics employers as a significant grievance among their workforce.
Mansoor continued: “Our research found that skills shortages, as a by-product of poor retention and the inability to recruit these workers, result in a 10% reduction of both growth and productivity in logistics businesses, on average.
“Hiring and retaining staff is no easy task at the best of times, but with Brexit on the horizon it’s crucial that logistics businesses now do all they can to attract motivated workers to these roles.
“Employers need to be creative and provide the greater flexibility that manual workers are looking for.”