Now’s the time for HR and L&D to excel, says Chris Kerridge.

Reading time: 5 minutes.

In the aftermath of an untidy referendum, Britain’s decision to exit the European Union has been filled with continued uncertainty and time is now running out.

After a great deal of hype and political manoeuvring, we are sitting in the eye of the storm. And HR and L&D cannot be too prepared for the impact that Brexit will have, and has already had.

Business leaders should already have asked their teams to gather the right information, undertake scenario planning, and give their teams the right tools to attract, retain and manoeuvre talent in the more competitive post-Brexit landscape. Recruitment teams have already seen a decrease in applicants from EU countries and talent appears to be in even shorter supply. 

Despite the UK having two years from the point at which Article 50 of the Lisbon Treaty [the official mechanism for exiting the EU] was actioned, there are not many certainties. Following the referendum, these scenarios were highly likely:

• There will be a war for talent in the UK
• HR will need to get creative in attracting and retaining that talent
• There will be pressure on HR to cope with legislative changes and all of the engagement tasks surrounding it 
• Workforce management will be more important than ever

Several of these predictions have already come true, with talent in short supply and many recruiters reporting the need to offer bumper salaries and other benefits in order to attract and retain employees. 

The truth is, there are many examples of ‘could’ and ‘might’ when it comes to assessing the impact of Brexit on HR and L&D over the coming years, but we do know for certain that Brexit is far more than a political change.

Brexit is already having an impact on the UK’s talent pool, and this has a significant impact on organisations’ strategies for workforce planning

Britain’s exit from the EU will have a significant impact on organisations’ future planning and leaders should already be analysing, scoping and planning for the processes and procedures that Brexit may ultimately affect.

The EU’s impact on HR [what are we moving away from?]

Understanding how to assess and plan for the impact of Brexit on HR and wider organisational business planning requires an understanding of how Britain’s EU membership impacted HR in the first place. So it’s time for a bite-sized background.

The EU has impacted HR and beyond within organisations significantly in three key areas:

• Market strength: Free movement of talent across borders from a central location positions the UK as an appealing base for access to talent
• Free movement of attractive talent: The UK labour market could support the transition of skilled and unskilled workers between countries, giving them access to a pool of qualified employees from other countries
• Employee rights: Organisations employing within the UK are subject to rigorous employee rights regulations, including working time regulations and TUPE, entitlements around maternity, discrimination protection, agency workers’ rights and holiday entitlement.

So the leading questions on HR and L&D’s lips at the moment are typically:

• What impact has the EU had on the ability of organisations to attract and manage people?
• What could happen as a result of Britain leaving the EU?

Impact on talent

Brexit is already having an impact on the UK’s talent pool, and this has a significant impact on organisations’ strategies for workforce planning – attracting and retaining the talent your organisation needs to succeed in the face of increased competition for a smaller selection of talent.

The severity of this impact will depend on how negotiations proceed from here: an agreement to continue free movement between the UK and the EU would facilitate easier movement of talent, but being able to reach an agreement is not a given and the application of current UK immigration rules [non-EU] on to EU movement may prove far more restrictive than UK-based organisations are used to.

Attraction of talent: The UK may become a less-attractive destination following Brexit, as it will no longer offer easy access to talented people from throughout the EU.

It is certainly possible that the UK will experience a decline in the number of EU citizens coming here to work, considering the numbers are already decreasing, and HR will really need to support a resourcing plan that covers strategies for coping with this.

There are some segments of UK business where an intake of workers from the EU is critical for continued operations. Businesses that rely on EU labour or a seasonal workforce should certainly have a contingency plan, with HR highlighting and planning for such scenarios.

We must also keep a close eye on the development of migration rules after Brexit. It is possible that current EU workers in the UK will now be covered by worldwide UK immigration rules and the UK’s existing ‘Points Based System’: a system that is geared towards attracting skilled migrants with a set level of English language only.

Visas and work permits may also come in to play, leading to increased administration requirements. Were this the case, hiring EU workers would become a far more complex and conditional process, with questions being asked around the rate of pay, vacancy level and whether or not the same available talent exists already within the UK.

Global implications: Predictably, the UK’s exit from the EU will have an impact on where global organisations position their base. Without the freedom of labour movement from the EU to the UK, global organisations may feel that the talent pool available in the UK is smaller than what may be achievable elsewhere.

The most marked impact here will be from US organisations looking to branch out in Europe.

Whilst it is unlikely that US organisations already operating in the UK will up roots and change their European hub, access to a wider pool of talent and the implications of a more complex setup may outweigh the benefits of shared language and similar laws offered by the UK when there are solid options such as Ireland or the Netherlands.

HR and L&D Directors may wish to consider a workforce audit within the UK to assess whether or not a post-Brexit UK workforce would be capable of satisfying their organisation’s resourcing needs.

Part two of this piece will be pubslihed next week.

About the author

Chris Kerridge is employee engagement expert at MHR.