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Brexit: What will the impact be?

In the wake of the UK’s referendum vote to leave the European Union, Helen Swire asks what effect this may have on the workforce in the near future

12 September 2016
Helen Swire

After 43 years as a member state of the European Union, the UK undertook a historic decision in the 23 June referendum when 52% of the population elected to leave the EU.

 

Since then, the country has reacted with a spectrum of emotions, and for some not a little panic about the implications.

 

But is there good reason for employers to be thrown into disarray? “The one thing that is certain is that we’re uncertain about what the next few years will look like,” says Teresa Wighton, head of international healthcare consulting at Punter Southall Health & Protection (PSHP).

 

She warns: “There’s a danger that people may change their business models in anticipation of what might happen, which is dangerous when Article 50 [of the Lisbon Treaty, which will trigger Brexit] hasn’t even been invoked yet.”

 

Reward surveyed 100 HR directors and employers in the immediate aftermath of the referendum to discover their key questions [see chart]. Unsurprisingly, with such a high level of doubt, the most important question for 38% of respondents is what they will need to do to prepare – with 11% concerned about the legal implications.

 

Immigration rules are also a concern, with 29% asking what action they may need to take around non-UK employees – although only 4% asked what they would need to do about expatriate employees.

 

Wighton says: “It’s almost certain that the freedom of movement will be moderated, which means that companies will have to go through an immigration process.” However, she remains positive: “I can’t see a day when there won’t be people moving around Europe and beyond, and companies deploying talent to the parts of the world where it’s needed.”

 

The specific questions around pay, talent management and employee benefits were raised by fewer respondents.

 

Indeed, it could be that benefits such as health insurance and childcare remain relatively unaffected, as beyond basic statutory guidelines they have always been a matter for local legislation. The greater impact is likely to be on pay if the economy suffers, or on wider healthcare if there are changes to NHS funding.

 

The key is to avoid knee-jerk decisions, says Wighton. “At the moment there’s heightened sensitivity around the vote and how divisive it appears – but it will settle.

 

“Companies need to be alert, but making changes without real signposts isn’t advisable – just hold your nerve.”


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