In the ongoing saga regarding the Brexit, last week another chapter unfolded. The final balance: despite many political declarations, a lot of uncertainty remains on the future relationship between the United Kingdom and Europe after 29th March, the so-called Brexit-day.
Although in some circles the call to completely abandon Brexit altogether is sounding ever stronger after last week, the political feasibility of such a scenario for the time being still seems far from certain. Whatever the case, irrespective of the form under which Brexit is coming, or indeed if even at all, the impact of Brexit on businesses is unavoidable and already unfolding today.
One thus will need to move away from the idea ‘seeing is believing’. More, considering the challenging course of the negotiations and the steadfastness on both sides and despite the vote of the UK House of Commons last week, the scenario of a ‘no-deal’-outcome still isn’t far-fetched. One thus better is prepared.
From an HR perspective, this means not only the direct impact in terms of legal compliance (“can my employee continue to work and perform duties in the UK), but also more strategic HR management and company design and culture questions do arise.
For example, have you considered these questions:
- Did you map the short and long term cost effects?
- Can your people with cross-border responsibilities continue doing their jobs on 30th March, or will they be facing additional formalities, eg. in the field of immigration? Is this still the most efficient way of working?
- Do you need to reorganize your business, and if so, how and where? Did you already think about the structures your enterprise will adhere to post Brexit-day?>
- Did you identify your key talent, do you have a retention plan in place, and a strategy to ensure a competent successor pool where necessary?
- Is your reward strategy Brexit-proof?
- Will your local organization grow substantially under the influence of customs considerations and rerouting of your supply chain, moving of certain roles and activities as a consequence and how will you work around that? How will this affect your workforce identity and how will you approach this?
- Will a business model reconsideration lead to a shift from a primarily white to blue collar work force or vice versa, and are your systems, policies and people ready for this?
The Belgian Chamber of Representatives already set a good example. Since mid-February, draft contingency legislation, arranging a number of important matters in the event of a Brexit without a deal with Europe being struck, is under discussion.
Amongst others, attention is being paid to citizen’s rights for UK nationals in Belgium and the impact of Brexit in terms of immigration obligations and social security in cross-border employment situations. The regions are in the meantime following suit. The Flemish House of Representatives, for example, discussed a Brexit draft decree with no-deal measures, at the very moment their British counterparts were debating whether a no-deal Brexit could be a real option.
It is however up to each company in Belgium to create their own certainty. You will thus need to verify in which areas the departure of the United Kingdom from the European Union will impact you.
Considering the ongoing incertainty this is not evident, but at the same time very important. An approach to prepare for the worst and hope for the best, whilst at the same time looking beyond the obvious, are two rules of fist which under the given circumstances are nothing but mere principles of good governance.
For example, the Brexit will of course have a direct impact on the residence rights of employees and their authorisation to perform work within the UK and Belgium. A chance also exists that the continued application of Belgian social security for employees in the UK and vice versa, is an ending story. Possibly you are also contemplating whether there are any tax consequences for the employees, and if so, which? All obvious and normal questions.
Have you however already considered the broader impact of Brexit on your organization? Think for example about the extra costs for visa and work permits a British employee coming to work in Belgium will need to hold, and the timeframe you will need to take into account to go through the administration process and obtain these documents.
It would be wrong to assume that only large multinational corporations with an internationally active work force will experience the deeper and more structural consequences of Brexit. Any company active within or trading with the UK, will need to adapt and introduce changes to the organization or business model.
Inevitably, these changes will trickle through to the people agenda. This will translate into additional workforce related costs, questions surrounding company organisation and the managing of cultural changes this will have on the workfloor.
It is only wise as a company to get prepared.
In short: a well-prepared business is worth two…