The hurdles of employing British candidates abroad
Constraints around Brexit are proving to be a barrier to employing UK engineers in Europe. We break down what’s happening, how it’s affecting the contractor landscape and whether these challenges can be overcome.
We all knew the effects of Brexit would be far-reaching, especially on labour markets both at home and abroad. The UK’s departure from the European Union spelt the end of free movement for Britons and the automatic right to live and work in the EU. Since the start of last year, UK nationals generally need a visa to stay in the EU for more than 90 days – the exception being anyone already working there before 2021. For British contractors keen to take on a new role overseas, a work permit is now required for most EU countries.
So, 18 months into these mobility restrictions, what is the impact on the engineering industry? No longer able to roam freely throughout Europe without a visa, it is much harder to get British workers onto European-based contract projects, says Adam Grundy, Senior Sales Team Manager at Progressive Recruitment. For staffing partners like Progressive, which predominantly places contractors in engineering roles, it has really piled on the pressure.
Contractors “are needed at quite short notice,” explains Grundy. “And the visas can sometimes take up to 12 weeks to get, in which time the need is gone, and clients are probably going to try and find someone with an EU passport.
“The situation has been a big challenge for us, because we used to place a lot of British people into places like France and Germany.”
The pool of people with the right passport – currently “like the golden ticket” – is also quite small, adds Grundy, and they often have several job opportunities at any one time, making it a very competitive, candidate-short market.
The rates mismatch
Sarah Watkins, Progressive’s Client Business Partner, explains there has long been a perception among a lot of EU companies that UK health and safety standards are probably the “best in class in Europe”, which is why British contractors were often pick of the bunch before Brexit.
But in today’s post-Brexit contractor market, Irish workers are now in a plum position because they have these UK training standards and also hold a European passport.
As a result, their rates are rising because this limited talent pool know they are in demand. Client expectations around pay rates, however, often don’t match up to what candidates want. “There is a big gap here and as an agency it is quite hard to find people for the budget these companies are willing to pay,” says Grundy. “You end up needing to say no to a lot of jobs because it's just unrealistic to commit yourself to finding CVs for a client, knowing you're never going to find someone for the budget they've got.”
These companies usually have a budget in place because they've won the work off the back of bidding for it. “So, they can only pay up to a certain bracket, otherwise it will break their pay structure, based on what they've won the project for,” he explains.
To ease the pressures of a candidate-short market, Grundy urges clients to consider hiring people from different industries. He says that when a company asks for someone with 10 years’ sector-specific experience in a particular role, though there are people available, they will generally charge a lot because they are hot property. “If clients can be more open to candidates from different career backgrounds, it would help,” urges Grundy. “It might be someone from automotive or oil and gas, who is motivated to work in the engineering industry, and will drop their rates to make this move.”
But Watkins warns that British contractors keen to work overseas also face the added challenge of more EU companies starting to look inwards for talent, rather than relying on British contractors.
“A lot of these countries are looking to develop their own people and make sure they’ve got their own local supply chain. So, I do think we will see a shift because of the lack of UK candidates or the difficulty in getting them.”
For all the UK contractors who jumped ship to move abroad when the off payroll working rules (IR35) changed in April 2021, such a shift won’t be welcome news either. Many of them opted to move overseas after the tax reforms made UK-based roles less appealing and better paid ‘outside’ IR35 contracts in short supply.
Catching up with the market
While there are no perfect solutions out there in today’s post-Brexit landscape, there are some steps that can help. Grundy explains that Progressive does partner with companies like 6CATS International, which supplies contractor management solutions to staffing specialists. It can take over the tax side of things for candidates and make sure workers are paying the right amount in each country. “But again, for an Umbrella provider to do this, we need the right compliance documentation – so we need people with visas,” he says.
Another option is obtaining an EU Blue Card, says Watkins – these are work permits issued by the appropriate country, which enable highly-skilled people to undertake roles in the EU. But this is not a simple quick fix for mobility restrictions, with take up among member states reportedly low.
According to Grundy, Blue Cards would be the quickest and most efficient way to recruit into the majority of European countries. “It’s a much quicker timeframe than getting a visa. In certain countries, it takes three to four weeks and is much cheaper. For a standard visa, it costs around £1800, but for the Blue Card, it's around €180 euros.”
Most of the contracts coming through from clients include stipulations such as being a 12-month contract or earning a minimum of €53,000 pro rata. “For the level we’re recruiting at that’s pretty perfect, but we need to be able to offer the Blue Cards,” says Grundy. “And to get one, a candidate’s compliance employee contract needs to be from the country they are going to be working in.”
Things could be looking up from 2023, however, with an EU Directive reforming the Blue Card system due to come into force, aimed at making it easier for European companies to attract non-European workers.
Navigating with confidence
For contractors and clients alike, remaining compliant with local work regulations is another hurdle. And it is not a one size fits all situation. Each EU country has its own way of doing things.
“Brexit is this big unknown and there's no blueprint yet, so we often get asked to walk companies through compliance and help them to understand what the constraints are,” she adds.
Even for staffing agencies, it can take time to establish how viable it is for a UK-based client to embark on a project won in an EU country, and what the company and contractors need to do to be fully compliant. “It does take time to define the rules and regulations for every country and that's where the complexity comes a lot of the time,” explains Watkins.
The post-Brexit landscape for working abroad may be tricky to navigate but being confident that a staffing partner has done due diligence, to ensure a client or contractor is fully compliant with local and EU rules, is a solid place to start.
For all your staffing needs or advice on placing candidates on EU-based projects, we’re here to help.