UPDATE 1 — Two thirds of small employers in Scotland with EU workers are concerned about future skills shortages, according to new research from the Federation of Small Businesses (FSB).

FSB’s study showed 26% of Scottish small employers currently have a member of staff from elsewhere in the EU, with this figure rising to 41% in the Highlands.

By comparison, about 20% of UK firms have an EU worker.

About 45% of Scottish smaller businesses in the tourism and leisure sector have an EU worker.

FSB said it is therefore vital for Scottish businesses that EU workers are given the right to remain in the country if the UK leaves the EU.

Mike Cherry, FSB National Chairman, said: “There is real concern among small firms with EU staff that they will lose access to the skills and labour their business needs to survive and grow.

“EU workers are a vital part of our economy, helping to plug chronic skills gaps across a wide range of sectors, and filling jobs in an already tight labour market.

“From packers, to mechanics, to graphic designers, small employers need to be able to hire the right person, for the right job at the right time.”

The FSB’s latest research paper on the impact of leaving the EU is called “A skilful exit: What small firms want from Brexit” — and a Scottish version of the report has been published.

The new research showed that if Brexit created additional barriers to recruiting EU citizens, Scottish small employers would consider reducing operations (37%), closing their business (19%), or moving their business abroad (12%).

About 89% of Scottish firms recruited their EU workers when they were already living in the UK.

And 95% of UK small firms have no experience of using the UK’s points-based immigration system to recruit non-EU workers.

Andy Willox, FSB’s Scottish policy convenor, said: “Smaller Scottish employers don’t have the resources of their larger counterparts to navigate complex immigration systems.

“Any future system needs to work for the real economy – and needs to flex to adapt to the needs of all sectors and geographies.

“It can’t just be big businesses that gain access to the skills they need.”

The FSB is also recommending changes to the Scottish skills and education system to try to mitigate the impact of any immigration changes.

Andy Willox said: “Our data shows that our members predominantly recruit non-UK EU citizens because they’re the best candidates.

“If our immigration system is set to change, then our skills system needs to do the same.”