Brexit And Business

25 March 2019

This month marks an important change that the entire nation is focussed on: Brexit.

Official plans are that the UK will leave the EU by the 29th of March, following a narrow margin (52:48) as voted for by the nation in the 2016 historical referendum. As the country’s hot topic there is much anticipation around the changes the country will face after Brexit; we take a look at the imminent impact that Brexit will have on business and business culture in the UK.

LATEST BREXIT NEWS NOW. ?

Prime Minister, Theresa May’s Brexit deal has been rejected twice by parliament. The PM has since written a letter to EU’s Donald Tusk addressing the deadlock situation that the government finds itself in, due to its inability to reach a pragmatic agreement to exit the EU. The letter sought a short extension for the UK beyond its original March 29th deadline to exit the European Union.

May’s request to delay Brexit has since been granted, giving the UK until the 22nd May to ratify a deal for the country. If the UK is unable to reach a resolution within its own parliament and requests a further extension, it could face EITHER a widely feared no deal exit OR the UK participate in EU elections three years after the referendum took place.

Should a no deal Brexit go ahead, EU would waive the UK’s 21 month transition period and this would see both consumers and businesses have to immediately respond to any changes. Such changes would include the rights of citizens to travel freely across European countries, and of course restrictions on free flow of goods and services. A no deal Brexit could result in “hard” border checks and delays, a spike in the prices of goods due to tariff changes and exchange rate changes and of course as well as a much-feared long-term impact on the British economy overall.

WILL BREXIT HAPPEN?

A petition with 4.5 million signatures is currently circulating which calls to revoke Article 50 (with the potential to re-trigger at a future date if the conditions are suitable) amid the political crisis that the country is currently experiencing. However, according to the Prime Minister, a delayed Brexit will still go ahead. The Brexit date now stands as the 22nd May, with PM Theresa May reiterating that she promises to deliver what the nation voted for.

BREXIT’S IMPACT ON BUSINESS.

There is a clear divide regarding the subject of Brexit and business. Some Brexit campaigners have optimistic outlooks on the future of business for the UK after it leaves the EU. Conversely, there are a number of key policies that the UK benefitted from due to its EU status that will be lost.

Let’s take a look at the changes that you should be prepared for as a business:

Employment and labour.

Brexit represents a huge change for European employees, whilst there is still a lot of ambiguity aroun the status of employed EU citizens in the UK after Brexit, statistics are revealing that more people are seeking employment outside of the country. UK businesses should look into bringing in outside change agents to assist throughout the process in a bid to provide the technology and services to maintain a “soft border” between the UK(Northern Ireland) and Ireland.

Some industries are predicted to benefit from Brexit

Security companies will likely see a huge spike in demand for their services in a bid to provide the technology and services to maintain a “soft border” between the UK (Northern Ireland) and Ireland.

Free trade between the EU and the UK could end.

Whilst the government has tried to secure the continuity of the UK’s free trade agreement, should a no deal Brexit go ahead the UK will have to negotiate new trade policies with the EU. As an EU member, the UK benefitted from automatically being subscribed to 40 trade agreements across 70 countries. So far, the UK has made continuity deals with only 7 of the 40 non-EU countries.

New manufacturing, employment and environmental standards will immediately mean that UK products will need to be inspected to ensure any goods en route to EU are compliant with EU standards.  Goods from Ireland which have value-add in the UK will bypass UK and trade within European Union countries directly, moving the jobs and value-add income from the UK to other countries.

Loss of access to single-market.

The UK is one of the founding members of The European Free Trade Association (EFTA) and will lose access to this.

UK export will be affected. In 2015, the UK exported £133 billion worth of goods across Europe, post-Brexit the UK is predicted to experience a loss of £4.5 billion annually without a definitive trade agreement in place.

Cargo in wharf ready to be exported

WHAT ABOUT YOUR EMPLOYEES? HOW WILL THE CHANGE FOR EU CITIZENS  AFFECT YOUR COMPANY?

European citizens are trapped in suspension as they await news regarding their employment rights after Brexit. Today, there are 2.28 million EU citizens working across the UK representing 7% of the country’s workforce. Many say they feel unwelcome, and are leaving, taking vital knowledge and skills in short supply with them.

European nationals residing in the UK will have to apply for settled or pre-settled status by December 2020, which marks when free movement with Europe will come to an end.

  • Your business needs to understand the mood of your workforce, identify if any (and who) are likely to leave, and what knowledge, experience and skills you need to retain.  You need a plan to understand the risks. Since this is all about the culture at a macro as well as a micro level (and cutting across functions), at this critical time you may need a specialist Change Consultancy.
  • Your business needs to be able to trace the impact of the support you are giving to EU workers during this transition period, so as to know if it is working, and if not, what you need to do differently.  Understanding the change in mood, which is how you can trace the impact of this support, is often difficult for an organisation who is set up to manufacture or deliver professional services.  It may require specialist help.
  • Your business needs a communications strategy and plan to communicate, honestly and openly, the possible impact of Brexit and the organisation’s plans.  People are discussing their future, rumours are spreading.  It’s vital that you get your message out and retain the workers you want to keep.  Even if you will need to lay people off, you will want to be in control of the situation, because if you aren’t usually the best people leave first.  You don’t have much time to refine your communications plan, especially as the landscape keeps changing, and you may need external resources and specialist skills.
  • People aren’t stupid.  Bland and dishonest communications are easy for employees to see through – it’s their future that’s at stake.  Keeping communication on message but at the same time believable will often require that you engage a specialist Change Consultancy.

Our dynamic diagnosis will bring about a point of focus. We can provide support and coaching to employees of all levels including national and global directors, in a team or one-to-one basis. Through the implementation of such supportive structures, your business will be on track to thriving during a difficult situation.

Contact TCC to see how we can help your company today.

Two office workers having a conversation and looking at documents