The business impact of the crisis in Ukraine – Will it affect jobs here in London?

The world is watching as the crisis in Ukraine is unfolding. The Russian invasion was unexpected and gave little time to prepare. As the intensity of the fighting shows no signs of easing, many are preparing for the realities of a long and bitter war. Throughout Europe and the UK, many are wondering what the impact will be of this conflict.

Many sectors are still struggling to overcome the damage done by the pandemic. The travel industry, in particular, is keeping a close eye on the crisis as conflict could damage confidence in travelling again. Let’s explore some of the ways that the war in Ukraine could impact the job market in the UK.

Increased uncertainty

One of the main ways that we could see the Ukraine crisis have a wider impact is through damaged confidence. When there is a lot of uncertainty, business bosses don’t like to make any big moves. This could mean pausing expansion plans, delaying promotions and freezing salaries and new hires.

This could have an impact on the number of job opportunities available. If you’re looking for work, turning to an employment agency could increase your chances of connecting with employers that are actively hiring as they will be looking to be smarter with their hiring practices.

Uncertainty will also be felt in the stock market, which has already been hit by the conflict. When the markets are spooked, the ripples can be felt throughout the economy.

The impact of inflation

With prices set to rise as a result of the conflict, this could further increase inflation, which would result in wage and hiring freezes. Inflation could lead to a fall in competitiveness, making UK exports less desirable overseas. This could lead to job losses in the UK as companies look for ways to reduce their overheads.

The impact of sanctions

Sanctions make it harder to do business with the world, which could have a significant impact on UK businesses. While many businesses may be voluntarily cutting ties with Russian markets, the economic sting won’t be any less severe. Companies with Russian links may also struggle to find a route forward.

Supply chain issues

Manufacturing jobs could suffer as a result of supply chain issues. The world was already suffering supply chain issues as a result of the pandemic, and this could be worsened by the war in Ukraine. The world relies on Ukraine and Russia for a wide range of items, including car components and foods like sunflower oil and corn. The war could limit supply, drive up prices, and put the squeeze on manufacturers who will either have to absorb the increased costs or pass them on to consumers.

Energy prices

Since Europe and the UK are reliant on Russia for natural gas and oil, a long conflict could lead to an increase in energy prices. And this is coming at a time when customers are already feeling the pinch of increased energy bills. Further increases in prices will hit those on low incomes the hardest, while those on higher incomes may need to cut back on luxury items. All of these factors will contribute to less confidence in the UK markets, which will have a negative impact on jobs.

Ukrainians in the UK

We could see an increase in Ukrainians living in the UK choosing to go back to their country to fight. This could leave some employers with skills gaps to fill rather quickly. Or they might choose to leave the vacancy open should the employee wish to return. This might be unchartered territory for many UK employers, so it will require a wait and see approach.

Likewise, we could also see Ukrainians arriving in the UK and looking for work. The UK government has so far been very slow to issue visas. While the majority of those fleeing the conflict are likely going to want to stay close to their country so that they can return when it is safe to do so, those who choose to go further afield to places like the UK are likely to be going with the intention of staying for the long term.

These workers are likely going to need extra support from employers as they get settled and process the trauma they have experienced. It will take a community effort to help those choosing to settle in London and the UK to feel welcomed and secure after fleeing such atrocities.