The importance of preparing for Brexit
Starting March 2017 the United Kingdom will begin the formal negotiations to leave the European Union. This has caused much uncertainty in the economic, business and legislative climate of the nation, throwing up a number of questions for business leaders. A number of considerations are now required by companies but the precise nature of the changes is still far from clear making this task extremely difficult to plan for.
Although there are organisations like the CIPD, who are committed to providing resources to support this planning it is of the upmost importance that businesses make a strategic plan to handle a number of issues before the UK finalises its exit by April 2019. HR plays an important role in helping build a more productive and adaptable workforce that promote responsible and sustainable practices.
Business planning for Brexit statistics:
Studies conducted by CIPD found that 42% of employers anticipate negative impact to operations as a result of leaving the EU. However only 15% of employers are preparing to address this, addressing the issue of productivity and skills is essential for the future of business. To ensure as little as possible disruption to your business models then developing a flexible plan is crucial.
The study also found the statistic that 30% of employers expect increased costs and 15% of employers are set to reduce investment in skills. Furthermore employers only expect 1.1% pay increases over the next 12 months during the initial stages of Brexit. This requires careful consideration in any investments, make the most of developing skills and opportunities to save revenue in HR.
Planning a strategy:
- Set up a Brexit taskforce with your business. The team should be made up of senior leaders within the business including those responsible for P&L, HR, external and internal communications, legal and risk. Its function is to keep the business informed of developments, identify risks and opportunities as well as advise on how best to react.
- Analyse how different post-Brexit trading models will affect your business.
- Make sure your business plan is flexible.
- Contact your trade organisations to help understand the potential impact of Brexit, the needs of your industry sector are communicated to the wider government.
- How would total costs compare from EU suppliers versus potential non-EU suppliers?
- What is the impact of the devaluation of Sterling on your business? For example, a greater opportunity to export and/or increased cost of imports.
- Are sales within the EU large enough to justify moving manufacturing and operations to an EU site to avoid a customs duty hit on margins?
- Review your data sets; are you hosting some in the EU?
Do you have any additional tips to prepare businesses for brexit? Let us know in the comments or tweet us @HPC_HRservices