According to the Labour Market Outlook produced by the Chartered Institute for Personnel and Development (CIPD) and Adecco Group UK & Ireland, only 15% of organisations have started to prepare for the impact of restrictions on EU labour – despite 42% of employers expecting such restrictions to damage their UK operations.

Of that 15%:

• 43% were focussed on strategic workforce planning

• 39% were reviewing their resourcing strategy

• 22% were planning to boost investment in apprenticeships, with a similar number looking to build closer links with schools and colleges

CIPD labour market analyst Gerwyn Davies said: “Uncertainty over the UK’s future arrangements with the EU is no excuse for inaction. From all of the information we have, it’s inevitable that there will be restrictions on EU migrant labour after the UK leaves the EU and employers must be prepared for this.”

The report also found that the recruitment market was likely to be tougher in the coming months. Firms were less likely to be hiring during the rest of the year with the employment balance falling from +27 to +22.

Firms also expect salaries to rise by only 1.1% in the next 12 months, particularly worrying given that inflation is expected to increase to 3% meaning real wages will fall.

Adecco Group UK and Ireland chief executive, John L Marshall III, said the referendum outcome should be a “wake-up call for employers”.

Nearly two-thirds (62%) of respondents to the Labour Market Outlook said their organisation employed migrant workers, whilst nearly a quarter (23%) of these employers said they had seen evidence that EU migrants were considering leaving the UK in the next 12 months as a result of the referendum result.

More than half (54%) of those with stated intentions to recruit EU migrants over the next 12 months believed their task would be harder than before the vote.

Alex Fleming, Managing Director of Adecco Retail says: “Brexit is now a reality and even though we don’t know the exact form it will take, businesses have to start planning for it. Understanding which areas of your business are most under threat is a good start and will allow you to make quicker decisions when the picture is clearer.”