The latest report form the Federation of Small Business (FSB), A skilful exit: What small firms want from Brexit, reveals that 59% of small businesses with EU workers say they are worried about accessing people with the right skills post-Brexit; 54% say they are concerned about future growth.
One in five small employers in the UK currently has EU staff; 72% of these firms recruited all their EU workers when they were already living in the UK. And the vast majority of small firms (95%) have no experience using the UK's points-based immigration system to recruit non-EU workers.
According to the findings of the research, UK small firms say they would consider relocating abroad (13%), reducing operations (13%) or even closing down (8%) if Brexit creates additional barriers to recruiting EU citizens.
The FSB is calling on the Government to guarantee, as soon as possible, the right to remain for EU citizens in the workforce.
Mike Cherry, FSB national chairman, said: "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.
"Securing the right to remain for EU workers in the UK must be a priority. It's also crucial small firms are given time after the UK leaves the EU to prepare for the new immigration arrangements. This means having sensible transitional arrangements first, followed by the phased implementation of a new immigration system."
The FSB says it is crucial that small firms aren't left "battling layers of red tape" to recruit the workers they need.
Small businesses, Cherry said, "are least well-placed to cope with losing staff, or dealing with a burdensome application process from the Government to retain and hire new staff. So it is vital that the Home Office engages with small businesses as early as possible on the design of a new immigration system to ensure affordability and ease of use."