Brexit and HR

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So what’s this “Brexit” thing we’ve all been hearing about then?

The HR Cat (Sarah Murray): Back in 2016, in order to retain the support of nationalists within the British Conservative party, Prime Minister David Cameron offered the UK a referendum on the UK’s EU membership. The people voted “Leave” by a margin of 52%/48%. The current Prime Minister, Theresa May, subsequently activated Article 50 of the Treaty of Lisbon, and the UK is now set to leave the EU on March 29th 2019 as an automatic operation of law.

Oh I see. So why is this in the news so much?

The HR Cat: If you have watched any news from Britain in the last week or so you will see that the entire thing has degenerated into a catastrophic mess. The UK’s attempts to negotiate itself out of the EU’s political structures while retaining the economic advantages of membership of the EU have angered Europe greatly. You may have heard “cakism” or “cherry-picking” mentioned. This is why – the UK seemingly wants to keep all the bits of the EU it likes and ditch everything it doesn’t. Even worse, the negotiations themselves have become hostile as the UK has consistently tried to ignore the EU negotiating team and instead deal directly with EU member states. As if that wasn’t enough, in the UK itself the referendum result is highly controversial, as evidence of fraud and corruption on the part of some in the Leave campaign have come to light. Additionally, as the consequences of leaving become ever more apparent, more and more people are regretting voting leave, to the extent that it is now virtually certain there is no longer a popular mandate for Brexit.

As the consequences of leaving become ever more apparent, more and more people are regretting voting leave, to the extent that it is now virtually certain there is no longer a popular mandate for Brexit. Click To Tweet

That sounds messy. But I suppose it could be worse.

The HR Cat: It is worse, a lot worse. A bunch of impact assessments were commissioned by the UK government and someone leaked them to the press. Under a “no deal” scenario, there is a reasonable chance of areas of the UK running out of food within days, and many areas running out of medicine less than two weeks after exit day. The UK government has responded by asking people not to stockpile themselves, and setting up a ministry to stockpile such goods. Naturally, the creation of such a position within the government has not calmed people’s fears.

Wow! I’m glad I’m not there.

The HR Cat: Wait a second, I’m not finished, it gets even worse. There are millions of citizens in Britain who were born in other EU states, as well as millions of Brits living on the continent. We’re talking about five million in total, roughly the entire population of Ireland. There has, so far, been no agreement on what will happen to this demographic. Their legal status, employment or property rights, their access to healthcare, or even whether they can still send their kids to school is completely unknown right now.

This is unbelievable! Why would they do this?!

The HR Cat: Hang, I’m still not finished, there is still worse to come. In the past week a withdrawal agreement, a basic damage limitation treaty, was finally put forward that the EU and the UK executive could both live with. Unfortunately, virtually nobody in the UK parliament liked it. The pro-EU camp say that it trashes the economy and EU citizens rights, the anti-EU camp say that it makes the UK a vassal of the EU. The current Prime Minister, Theresa May, had to deal with 5 separate resignations and a whirlwind of memes on Twitter in a single afternoon, not to mention being mocked by news related entertainment shows all over Europe. She also lost her allies in the DUP, meaning the UK government is now on the brink of collapse.

That’s terrible! Isn’t anyone doing anything about this?!

The HR Cat: Yes. Most of the European institutions that will be most severely affected are busy dealing with and preparing for Brexit. Well… all except the UK itself, strangely enough.

Okay. Enough bad news. I came here for human resources, not politics!

The HR Cat: Glad you said that! But this is also very likely to affect HR departments throughout the EU, particularly in large and/or international companies. There are three main areas that EU based HR departments should be ready for with regard to Brexit:
Brexit is also very likely to affect HR departments throughout the EU, particularly in large and/or international companies. Click To Tweet

Firstly,

the status of UK citizens living in the EU may change drastically on Brexit day. They might become third country citizens, they might be permitted to carry on as before, their status might actually be the responsibility of the nation in which they reside. But whatever happens, HR departments who have Brit employees on their payroll need to be prepared to offer advice and support to these employees, and possibly check if they need residence permits or visas after Brexit day to continue working.

Brexit and HR

Photo Source: Sarah Murray

It’s also possible (though unlikely) that a few won’t actually want to stay on inside the EU27 if their status changes, particularly if major diplomatic or social barriers go up between the UK and EU, as it might make it more difficult for them to keep in easy contact with friends and family. It’s also not inconceivable that a few may be refused visas for whatever reason, and be asked to return to the UK. In such instances HR will have to be prepared to deal with the consequences, support our employees through the process and possibly recruit replacements.

Secondly,

a lot of international companies which have operations which stretch across the EU are going to be affected by this. Just-in-time supply chains, food companies, financial services, chemicals, pharmaceuticals, and even tourism to name a few. There is even talk of flights between the UK and EU stopping as the UK will no longer be signatory to the ‘Open Skies’ treaty. Many high profile EU companies (such as Airbus, BMW, Microsoft, and Panasonic) that have operations in the UK have already announced they intend to move some or all of their current EU operations to other EU states should the UK leave the EU’s internal market.

Brexit and HR

Photo Source: Sarah Murray

This will have knock-on effects through entire industries, and there are sure to be serious adjustments to logistics and supply chains even if they don’t currently run through Britain. So an avalanche of major restructuring projects awaits as companies withdraw from Britain. They’ll be bringing what machinery is cheaper to move than reacquire, they’ll be searching for new suppliers, but they’ll also be trying to persuade key personnel to move along with them. A lot of these personnel are inevitably going to be Brits – so remember the first issue will apply here to. It may also be necessary to hire resettlement consultants to help with people who do make the move.

Thirdly,

here is going to be a recruitment bonanza! Right now there are thousands of people in the UK looking for work outside of it. This isn’t just confined to citizens of the EU27, but also to British people themselves who are afraid of what Brexit will do to their standards of living after it takes place. And it isn’t just quality of life that’s making people want to leave. For example, loss of access to Horizon 2020 funding and a lack of trust in the UK government’s ability or willingness to replace it is leading to a brain drain as scientists and research engineers head to the continent.

Brexit and HR

Photo Source: Sarah Murray

So we’re not just talking good employees, we’re talking some of the best people around who are suddenly available in large numbers. If you’re looking for capable and qualified people right now, Britain is absolutely the place to go and find them. This will be even more apparent as Brexit hits. If you do find yourself looking for people, the fact you’re recruiting into the EU can be a major selling point if you approach people in the UK – use it!

We HR professionals are tasked with looking after both our organisations and the people who work for them. Sometimes the interests of both conflict. Not in this instance. Brexit is quite simply bad for both business and people, and HR will have a key role in trying to limit any damage that comes about because of it.

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