Brexit has been dominating media headlines, as experts are quick to comment on the economic, trade and travel implications of Britain's vote to separate from the European Union (EU). Yet many organizations are concerned about a more immediate matter: how will Brexit affect their business? And for HR leaders, that means how will the vote affect overall HCM strategy? Are there implications for current employees and future recruiting strategies that need to be taken into account?
From changing employment laws to a potential talent shortage in certain fields, businesses have to evaluate whether they're ready for the possible impending changes.
Brexit: The Changing Context for HR
The UK now has two years to negotiate it's split from the European Union, but the ramifications of the split could take years to surface. Specific elements — such as how and when the UK will change employment laws and regulations — are also unclear. As a result, organizations should begin contingency planning but also be aware that it may take years until specifics are finalized.
In the meantime, here are six ways HR leadership can steel themselves against the ramifications of such a monumental shift in the global landscape.
1. Employee Communications
One of the most important steps that organizations can take is managing employee communications. With uncertainty around the decision in many quarters and immediate changes such as the overnight drop in the value of the GBP, many employees may be nervous about their financial and employment futures. Organizations should consider what to communicate with employees and the most effective way of doing so. However you go about it, you should take a proactive stand and affirm your commitment to your employees moving forward.
2. Evaluate Potential Impact
Every business will be affected uniquely by Brexit changes, depending on the makeup of their employees, where they're operating and even their industry. Organizations should allocate time with their legal and HR teams to begin to understand the potential ramifications and begin long-term planning for areas of potential exposure. Areas to consider include employment law, recruiting strategies, employee retention, compensation and specific benefits such as pensions.
3. Tracking and Processing Information
The coming weeks and months will offer a significant amount of information related to Brexit for employers. Organizations need to have resources dedicated to collecting that information, determining how it will influence their business and building out contingency plans.
4. Employment Laws
Right now, the United Kingdom's employment laws are largely guided by the requirements of their active membership in the EU. Once the separation is formalized, it's possible that the country's employment laws could be altered. While wholesale change is unlikely, certain provisions may come under scrutiny. Three areas in particular include Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), the Working Time Directive and the Agency Workers Regulations. Understanding how and if changes would affect your business is a smart first step.
5. Potential "Brain Drain"
According to CNBC, another aspect that organizations will need to prepare for is the possibility of a "brain drain of talent." Depending upon the new regulations, it may become more complicated to hire or retain talent from the UK. Individual employees may also not wish to stay for a variety of reasons. Organizations should evaluate what percentage of their talent is made up of individuals from the UK and how to minimize their exposure on this front. In particular, organizations that rely on a large flow of talent from the UK should be prepared for the multitude of complications that these changes might bring.
Brexit is largely an unknown. Therefore, its impact will depend largely on how specific elements of the separation are negotiated and when those decisions become law. CHROs who recognize this ambiguity and plan ahead for as many contingencies as possible will be best positioned to respond and minimize any potentail negative aftershocks that follow.