Getting your HR team in shape for Brexit
You were probably limbering up before Theresa May triggered article 50 on March 29. Now with formal Brexit negotiations due to begin in June after the general election you’ll need to step up several gears – like an Olympic athlete preparing for the biggest challenge of your life.
The outcome is uncertain, as with any Olympic event. But Brexit is even more problematic because you don’t know the distance of the race.
It’s unlikely to be a sprint because the deadline to conclude negotiations is March 29, 2019. Theresa May is seeking a transitional period after that to give businesses and individuals time to adjust to changes and so avoid a “cliff edge” scenario. The EU is open to a transitional arrangement for a period lasting no longer than three years.
Nothing is guaranteed but the race is also unlikely to be a marathon, at least for HR directors and senior managers. Both Britain and Brussels want an early agreement on the post-Brexit status of the 3.2 million EU nationals currently in Britain and the one million or so UK nationals living in other member states.
This, however, could be very difficult. Theresa May’s team is set to fight demands from Brussels that EU nationals currently in Britain should enjoy exactly the same privileges they do now even after the country leaves the bloc. And Brussels has signalled that any delay in resolving their rights could prompt the EU to withhold talks that Theresa May wants over a free trade deal.
So you could find yourself in a 1,500 or 5,000-metre race – but with hurdles. This will demand not only strength and stamina but agility.
Forward planning and horizon scanning are vital if you are to cope with any major workforce changes whenever Brexit comes and in whatever form. You don’t want to be caught in a standing start.
Uh Oh, Someone Fired the Starting Gun a Year Ago
You might even have left the blocks to deal with changes already underway.
Many organisations are encountering recruitment difficulties because of the drop in the supply of EU nationals since last year’s Brexit vote. There’s also evidence “that EU workers are considering leaving the UK”, Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD), said in March.
In the longer term, further change seems inevitable because the government is pledged to significantly reducing net migration. It has clearly stated that the Free Movement Directive will no longer apply after Brexit and the migration of EU nationals will be subject to UK law. But if a transitional period is agreed, free movement could continue at least temporarily.
In the longer term, further change seems inevitable because the government is pledged to significantly reducing net migration.
Theresa May is keen to marry post-Brexit immigration policy to her industrial strategy, limiting entry to mostly skilled workers in sectors where there are shortages and providing extra training for Britons in industries which rely on migrants. She has ruled out an Australian points-based system for EU workers post-Brexit so the government might decide to introduce a work-permit and visa system of the kind that currently applies to non-EU citizens. The prime minister also opposes the notion of charging companies for hiring employees from the EU.
How Do I Train for the Big Event?
Employers must also have their own strategic plans in place. This requires casting a critical eye on employee attraction, a cohesive and effective L&D programme and, above all, being agile to change and disruption.
The skills’ crisis, which shows no signs of abating, is already HR’s most burning platform.
The skills’ crisis, which shows no signs of abating, is already HR’s most burning platform. There are fears that this has been deepened by uncertainty over Brexit by triggering a shortage in areas ranging from engineering and IT to nursing.
The number of candidates available for jobs in April hit a 16-month low and recruiters have complained of shortages of applicants in more than 60 different roles, according to a new survey by the Recruitment and Employment Confederation. The REC’s chief executive, Kevin Green, attributed this to the pound’s weakness after the Brexit referendum and concern over future immigration arrangements, which are making people reluctant to move jobs.
Put simply, HR should hope for the best but plan for the worst. Yes, it’s cliché but it’s particularly relevant in the context of Brexit. Never have employers faced such a demanding challenge in needing to align a company’s human resources with business objectives.
But in rising to the challenge, a company can build a stronger, more productive and more resourceful workforce.
But in rising to the challenge, a company can build a stronger, more productive and more resourceful workforce, better able to compete with the best. Rather like an Olympic athlete.
Or, as Peter Cheese of CIPD puts it, triggering article 50 was a call to arms for the HR profession “to ensure that our organisations embrace diversity, that our people are engaged and have the chance to develop and that we’re creating successful and sustainable businesses for the future, whatever shape it takes”.
Regard Brexit as a Stimulant
It is useful, then, to view the Brexit challenge as an opportunity or stimulus. But it will be hard to capitalise on it if an organisation operates in traditional modes. From attraction and recruitment through to succession management and leader development there will be a need for creative thinking, innovation, organisation and, vitally, keeping ahead of the tech curve.
Before making contingency plans for any potential staffing or skills and talent shortage, you need to audit your workforce – if you haven’t done so already.
Before making contingency plans for any potential staffing or skills and talent shortage, you need to audit your workforce – if you haven’t done so already. Having big data analytical capacity will help provide the right detail and information needed to future-proof your company.
You need to know who your current employees are, where they are from, their capabilities, and who is coming on to the market. Analyse potential flight risk and be aware of any signals from the government or other sources of information about what changes might be coming.
A friend who works for a small but dynamic derivatives trading firm in the City of London was surprised after the Brexit referendum to discover that three-quarters of its 40 employees could be affected. Many were either highly-skilled EU nationals or Britons married to Europeans.
“This immediately had an impact on our company. Would they stay after Brexit? Or rather could they stay? Everyone started getting a bit restless,” my friend said.
The firm promptly equipped itself with full data on its employee demographics and was relieved to find that it could retain most of its staff. Many had worked in Britain for five years or more, so could apply for a permanent residence card. This is a prerequisite for citizenship, which is available to those who have lived in the UK for six years.
How Agile are You?
The UK’s financial sector, of course, faces more challenges than most from Brexit. Banks and finance firms that rely on selling financial products and services freely within the EU are concerned both about losing their passporting rights and access to foreign talent. Some staff are already being moved to new bases or subsidiaries in Europe as a contingency measure.
The UK’s financial sector, of course, faces more challenges than most from Brexit.
So the HR of such firms need to know the agility of their workforce. How many older and more experienced employees with mortgages and families are prepared to relocate abroad? What inducements might be required to encourage them to do so? Younger staff are usually more open to moving overseas but do they have the skills you need?
Don’t Forget the Paperwork
Meanwhile, HR can guide EU staff through the tedious and sometimes baffling bureaucracy involved in applying for registration certificates, permanent residence cards – the form for these is 85 pages – or naturalisation. Your support in dealing with red tape will help you retain and engage valued workers and boost their loyalty.
But get applications in early – the Home Office Affairs Committee is warning of possible delays in the immigration system because of a rise in those wanting to secure their status ahead of any post-Brexit immigration changes.
Also, if your organisation has started to tweak recruitment practices after the Brexit vote be careful you are not opening yourself to legal challenge. You don’t want to be exposed to costly discrimination claims and potential reputational damage.
In August, HR Director Magazine will look at what changes to employment law and legislation are likely to kick in post-Brexit. In the meantime, you can offer your EU employees some firm assurances about their status, which should ease any anxieties they may have as negotiations to leave the EU press ahead.
Foremost, the UK remains a full member of the EU until those negotiations have been concluded. Until then, EU nationals still have treaty rights to live and work in the UK. And many or even most are anyway likely to qualify for permanent residence.
And consider taking these measures:
• Communicate and engage with employees, even when there is no news. A lack of communication can lead to rumours, low morale and fears that managers are secretly making Brexit-related decisions that could harm them.
• Make an announcement on your intranet inviting people to talk informally to a member of your HR team on the potential implications of Brexit, particularly to put concerns about job security to rest.
• Let them know the organisation is keeping up-to-date with the latest government announcements. And help staff interpret political developments – you don’t want them feeling anxious whenever they encounter bad or inaccurate news in the media.
The thirst for information is clearly there – HR departments that have held Brexit surgeries say these are very well-attended. Messages must be consistent throughout the organisation so make sure that line managers are also on board.
Be a Sport, Be a Team Player
Collaboration generally will be essential throughout departments, with leaders, teams and line managers working together to build synergy and common purpose.
Athletes, remember, go to the Olympics in teams.