Firms are being urged to step up their preparations for Brexit after a new study found that employers are "totally unprepared" for a fall in migration once Britain leaves the EU.
A survey of 500 business leaders by the Resolution Foundation showed a huge gap between the kind of immigration system employers expect and what the new government is planning.
The poll of firms who employ EU nationals showed that almost half have "totally unrealistic" expectations of what the post-Brexit immigration regime might be, said the report.
Almost one in five expect no change to the current system of freedom of movement for EU nationals to the UK, while nearly a third believe that the system will be maintained for those with a job offer.
Almost half do not expect any change in the number of EU nationals in their workforce over the next 12 months.
A quarter expect to increase the number of migrant workers they employ, roughly the same proportion as expecting a decrease.
The Foundation said lower migration, coupled with a higher minimum wage and a tightening jobs market, could put an end to the era of readily-available cheap labour that has characterised the UK labour market in recent years.
Torsten Bell, director of the Resolution Foundation, said: “As the fallout from last week’s election rumbles on, the new government will need to be making fast preparations for Brexit negotiations that start in just seven days’ time.
But it’s not just government that needs to step up preparation for Brexit.
“Many British firms are totally unprepared for this change, particularly when it comes to migration. Ministers have compounded this uncertainty by choosing not to answer questions over what a post-Brexit immigration regime might be.
“Whatever people’s views on Brexit, the journey, not just the destination, matter hugely to growth, jobs and living standards.
"Now is the time for both firms and government to focus on how we navigate that journey and the changes to our labour market it brings.”