The UK is about to begin an unprecedented period of change, creating unique challenges and opportunities. The consequences of Brexit will require planning and communication from companies who wish to prepare for Brexit by relocating their businesses into any EU27 location.
In this context, businesses need to prepare and execute a relocation strategy that considers the preferred location for the move, the anticipated costs, the retention and relocation of talent and minimal business disruption.
Companies should consider the following:
Cost and benefit analysis of relocation
The likely costs and benefits of relocation will vary from location to location. A comprehensive analysis of the differences in terms of tax, social security, immigration and pensions regimes between the 27 EU states is advisable as part of any relocation strategy for financial services businesses.
EU rules on social benefits are likely to no longer apply to the UK from March 2019 and would be replaced by existing bilateral social security agreements that the UK concluded with some of the remaining EU27 countries in the past. In such cases, the existing agreements would have to be renegotiated in order to adapt them to the current working conditions and to guarantee social protection of the individuals in case of relocation.
Where there are no bilateral social security agreements we would expect the UK to conclude agreements with those EU countries in order to ensure social protection and cover the different work structures as well as for periods of secondment.
Managing immigration and mobility liability cost
For non-EU citizens living and working in the UK, little will change from an immigration and mobility perspective, as they currently need visas and permits to work in the UK or in the rest of the EU.
However, for EU and UK citizens, who do not need a residence visa and work permit today to live and work in the UK and in Europe, the scenario might change. Without any special arrangement between the UK and the EU, Brexit is likely to increase immigration and compliance costs for employers and commuters. In addition to the UK aspect of such costs, an assessment will need to be made of immigration and compliance costs in destination jurisdictions.
All businesses need to minimize the cost of disruption when making key strategic changes. Change management involves developing a strategy that considers all stakeholders and develops an effective communication strategy before announcing any relocation.
Key change management issues are as follows: