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India: Flying high

Overview
“Should we drive, take a train, or fly?” was once a prevalent question across every Indian household. To a large extent, it still is. But times are changing. Historically, taking a flight has always been the most expensive method of transporta…

Iceland opens Northern Irish depot to tackle Brexit red tape

Iceland store

Iceland[1] has opened a new depot in Northern Ireland in an attempt to return some of its EU trade “to the way it was pre-Brexit”.

It is the latest bid by a major supermarket to minimise post-Brexit trade disruption with the EU.

Iceland’s new distribution centre will serve its European customers and help to bypass the tariffs and red tape that emerged following the UK-EU trade deal.

“The primary reason for doing it is to make exporting to the EU easier,” head of Iceland International Alistair Cooke told The Grocer. “It’s more cost efficient as there are no tariffs and it’s effectively back to the way it was pre-Brexit.”

The warehouse will act as a dedicated international hub for supplying countries including Spain, Netherlands and Norway, as well as potentially the US. Cooke said it will create a “dedicated international depot as opposed to sharing a depot with Iceland UK”.

Iceland MD Richard Walker voted to leave the EU in 2016 but backed a second referendum in 2019 calling the “opportunity cost” of Brexit[2] “now unacceptable”.

An executive at another major supermarket told The Grocer this week it was abandoning ‘just in time’ deliveries to Northern Ireland because of the disruption caused by the NI protocol. Just-in-time delivery models consist of frequent deliveries of small quantities, a method reliant on each lorry load transporting up to 100 different product lines.

This has become impractical for moving goods between Great Britain and Northern Ireland since checks began on goods moving from Great Britain to Northern Ireland.

“We’re now only putting three products in a lorry,” said the supermarket executive. This is possible because of the retailer’s distribution centres on the island of Ireland, however they highlighted this will not be possible for supermarkets who supply their NI stores directly.

With just under four months until full checks begin on the Irish Sea border, all retailers are working on plans to address the burden. Tesco[3], for example, has started asking[4] some British suppliers to ship directly into the Republic of Ireland, where the supermarket will then transport their goods into Northern Ireland.

Iceland’s new Northern Irish depot comes as part of broader plans to expand its international network. It is currently witnessing double-digit growth year on year, said Cooke, with “no limit” to the level of business that could be generated around the world.

As well as opening new franchise stores across Norway and Scandinavia, the retailer is expecting “huge growth” in China over the next five years through ‘bricks and mortar’ sites as well as online retailers.

Asked why Iceland’s international business was succeeding where many others struggle, Cooke said it was important to recognise that supply chains are often set up to service the UK rather than abroad, and find ways to work with this “rather than trying to change the way the ‘mothership’ operates”.

References

  1. ^ Iceland (www.thegrocer.co.uk)
  2. ^ Brexit (www.thegrocer.co.uk)
  3. ^ Tesco (www.thegrocer.co.uk)
  4. ^ started asking (www.thegrocer.co.uk)

Brexit a double-edged sword for the UK labour market

Five years from the seismic Brexit referendum of June 2016[1], the UK labour market is feeling its consequences. We have seen a notable shift in international job search patterns on Indeed UK. The news is mixed, with both positive and negative developments.

EU jobseekers are less inclined to search for UK jobs, with lower-paid positions seeing the greatest fall-off[2]. These are jobs most likely to be affected by new skilled worker visa rules.

We see evidence of a clear Brexit effect, rather than just a pandemic travel effect. Falling searches from the EU contrast with rebounding searches from non-EU countries and from Ireland, whose citizens are unaffected by post-Brexit immigration policy thanks to the Common Travel Area. Non-EU interest in higher-paid jobs has actually registered a substantial increase.

The changes in international jobseeker interest in UK positions suggest that the shift in the UK’s immigration regime is working very much the way the government intends — to “reduce overall levels of migration and give top priority to those with the highest skills”.

For some employers and recruiters, this spells a need to rethink recruitment strategies 

For some employers and recruiters, this spells a need to rethink recruitment strategies. For those that previously relied on EU workers to fill lower-paid jobs, such as cleaning, social care, distribution, childcare, food and hospitality, that is likely to mean an increased reliance on domestic candidates. This could be problematic in some cases, given a historical reluctance of home-grown workers to do some types of jobs and the fact that some jobs (lorry driving for example) involve lengthy training periods. Where recruitment difficulties prove persistent, the answer is likely to ultimately involve reviewing pay and conditions.

Concerns over skill shortages in a range of industries from social care to haulage have generally been met by the government rejecting calls for increased flexibility

Concerns over skill shortages in a range of industries from social care to haulage have generally been met by the government rejecting calls for increased flexibility. The Home Office has repeatedly emphasised that employers should focus on hiring and training British workers. The need to recover pandemic job losses among the domestic workforce has only reinforced this position.  

It’s a very different story for those recruiting for roles paying higher salaries, including tech, engineering, finance and medicine

It’s a very different story for those recruiting for roles paying higher salaries, including tech, engineering, finance and medicine. Rising non-EU interest in UK jobs means they are well-placed to tap into new talent pools. Several current and former Commonwealth countries have notched some of the biggest increases. Jobseekers from India and Pakistan are particularly interested in software development jobs, while we’ve seen rising interest in nursing jobs from Nigeria.

Meanwhile, job searches from Hong Kong spiked after the UK government offered citizenship to around three million residents of the special administrative region in July 2020 and have stayed high since.

For the UK labour market, the changes we’re seeing underline that Brexit is a double-edged sword. Jobseekers have reacted to the new immigration system, while British employers wanting to hire from abroad will benefit or suffer depending on the type of work they offer. Some will need to be creative in how they respond and think carefully about how they attract the workers they need from pools of candidates who may have different characteristics to those they previously relied on. 

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Jack Kennedy, UK Economist at Indeed