The impact of Brexit on employment: Insights from 3 experts

On 23 January 2019, in London, Workable hosted a high-profile panel discussion titled Brexit: Recruiting Through Uncertainty, to talk about the impact of Brexit on employment and strategies on how to navigate the lack of clarity around Brexit. Upwards of 250 people registered to attend the event which took place on a cold day at The Brewery in London’s city centre, with an estimated 675 more signing up to watch the livestream online.

Presiding were:

• Matt Buckland, Workable VP of Customer Advocacy, who brings with him 16 years of experience in human resources and recruitment
  
• Sarah Lieberman, Programme Director and Senior Lecturer, Politics and International Relations at Canterbury Christ Church University, who brings 11 years of European legislation & regulation expertise
• Louise Haycock, Director & Solicitor at Fragomen, who brings 12 years of UK inbound immigration experience.

Brexit uncertainty hangs like a cloud over Britain’s recruitment community, as well as permeating conversations everywhere from the residential supper table to Westminster. With that in mind, our three panelists discussed the impact of Brexit on recruitment and retention for the larger recruitment community in the UK, and offered insights and potential workarounds for what’s coming up. A video of the hour-long panel talk is below – meanwhile, read on to learn the key takeaways from the event:

1. No easy path

No one knows what’s going to happen. This theme was a common refrain throughout the hour.

Sarah made this clear early on in the panel: “This morning … we were desperately checking Twitter, checking BBC News for updates, [even just] 20 minutes ago, because that is how close we are now, and how uncertain things are. … literally it’s all up in the air.”

This of course affects planning purposes in mitigating the impact of Brexit on employment. It’s hard to plan for something when you don’t know what that something is going to be, Sarah said.

“It depends if you mean long term or short term. In the short-term, I have no idea. It could be anything. In the short term, the only two options currently appear to be sticking with what we’ve got [or going ahead with no formal arrangement]. Because there is no deal on the table. … There’s nothing to look at, and say, ‘Yeah, this is what it’s going to be.’

And to really drive the point home that it’s gone far beyond the politics, Sarah clarified:

“Whether [you are] pro-remain or pro-leave, it doesn’t immunize you against it being difficult.”

2. But yes, there are things you can do

Nevertheless, Brexit uncertainty doesn’t mean that there’s nothing to plan around. There are numerous focal points that recruiters and HR representatives can consider to build a strategy with contingency plans designed to pivot quickly at the earliest sign of clarity.

Louise emphasized the importance of that: “There are certainly elements that we can look at and start to plan on a worst-case scenario basis and on a best-case scenario basis. What would happen under the withdrawal agreement that’s on the table at the moment?”

She added a point of optimism that maybe – just maybe – the anticipated changes may not be as marked as originally feared, based on the UK government’s Brexit white paper which was released in December of 2018. Louise’s employer, Fragomen, has an extensive and detailed Brexit section on its website that outlines, among other things, the main details of the white paper as it pertains to immigration.

Louise pressed the point that, while there would be a transitory period, there were two points to look forward to: what would happen with people will likely not change drastically from one day to the next, and free movement would likely continue until the end of 2020.

“Now, that gives employers a long time to be able to sort out the individuals that are already exercising those treaty rights. So meaning they can go and register their presence. They have a means to prove that they are able to live and work in each of those countries, and they have an ability to show that they are able to travel. So that clearly is the preferable scenario, that we’ve got a big lead in time and we’ve all got an opportunity to be able to protect those individuals.”

That, however, is if the details of the white paper – which Louise clarified is just a set of ideas proposed by the UK government in terms of immigration – were to take effect in law.

Consider the impacted parties

In the case of a hard Brexit – meaning, no agreement at all – Louise recommends looking at the three impacted parties in Brexit HR implications: 1) EU nationals living in the UK; 2) UK nationals living in the EU; and 3) those living in one country but working in another, or “frontier workers”.

For EU nationals living in the UK: Louise was clear that they must register as soon as possible under the EU Settlement Scheme, and the potential turnaround for approval – normally expected to be 2-3 weeks – could be as short as 24 hours based on one client’s experience. The murkier part happens in paying the fee — at the moment, a fee must be paid, and applicants can apply for reimbursement after 29 March.

For UK nationals living in Europe: it gets a little more complicated. Each country will have its own registration process for UK nationals, Louise said. “That’s 27 different types of registration processes, all of which look slightly different. All of which have different timescales in which those individuals have to register by before you get to the position where they’re essentially illegal.”

She highlighted two examples: “We do know in Germany they’re going to have three months, whereas, on Dutch soil, you’ve got much longer … it should be a two-year point that UK nationals have to register their presence. So I would be concentrating on those individuals who are British nationals based in Germany.”

There is, of course, the caveat of lack of clarity: “I must add at this point that these schemes aren’t necessarily live yet. We just have a very broad outline of what they might look like.”

Louise recommends looking at the nationalities within your workforce and those you are looking to hire in the coming months, and take advantage of that short time frame between now and 29 March: “Is there anybody who is relocating that may need to or would benefit from free movement?”

For those who work for businesses remotely in the EU – the ‘frontier workers’: “It goes back to the withdrawal agreement and what that says. So there is provision for, say, a frontier worker who might live in one member state and work in another. Wherever you may get a residence permit – is it only where you live and not necessarily where you work?

“So there might be a separate registration process they’re going through for looking at frontier workers. And that would be, how you would have to remote work in the future.”

3. Contingency plans abound

“A change management plan is a really good idea,” said Louise. She points out that there are general points to look at: knowing who your impacted populations are, communicating with them, mapping out who needs to know about the impact of Brexit on employment and business, what specifically they need to know in terms of their role in the company, and devising a plan that accounts for time, budget, business planning, and other elements.

Time is a major factor, especially. Take into account the benchmarks that will affect your hiring and retention strategies, such as Germany’s three-month scheme and the two-year scheme in the Netherlands. You may have to implement an aggressive hiring strategy starting in 2021 when Brexit is finalised, and consider that bringing in EU nationals – and other foreign talent at large – will take up added time and resources.

Plan for what is likely to happen

Sarah also discussed the potential outcomes that you can plan for: “I suspect long-term we will end up with something a bit like the deal that Norway has. I think, in the long term, we don’t want to not be trading with European member states, because [a lot] of our trade is with our European partners. They’re the closest countries to us.”

Louise stressed that you must consider 29 March as the cutoff date for registering for presettled status in the EU settlement scheme, and consider that this date potentially marks the end of free movement for potential candidates and even current employees. “I would encourage your European population in the UK to use that scheme now.”

Visa processing times will likely increase – with some estimates as long as six weeks – having a considerably direct impact on time to hire. Not to mention costs associated with employing someone who has a visa requirement: “For example, somebody is employed under tier-2 for five years; the latest [quote] that I gave to a client was even £9,000 in visa fees alone. So not including anything else. Businesses don’t go to that as it’s not a cheap means of getting labour.“

Louise reminded us that no matter the outcome, one thing is certain, provided there is a Brexit: “There will be a new immigration system that will go live from autumn 2020 [onward].” She added that the current immigration system wouldn’t be able to withstand the added numbers of incoming European nationals post-Brexit, and that there’s also a need to cater to the labour market in a different way.

But, she noted, with the white paper outlining plans for a new immigration setup to go live in the autumn of 2020, employers have the time to plan for procuring entry permissions for individuals starting in early 2021. That’s the kind of long-term planning that recruiters and employers can and should aim for.

Sarah pointed out the time constraints at the nearer end of the scale: “There’s only 34 days, I think, when Parliament is meant to be sitting before the big day when Britain leaves.” (Ed note: this is as of 23 January, the day of our event). While that may be a scary thought for many, Sarah recommended keeping an eye on the day-to-day processes and knowing where to put your pieces on the board.

Louise agreed, with a reminder for caution:

“It’s plotting out that strategy over a three-year period and perhaps mapping your timeline to what the government’s [process] looks like. Although, let’s face it, that’s not exactly entirely clear at that stage either.”

Get your data together

What you can do is do your homework, Louise said. Get your data together, know who your affected people are, look into registration schemes for both your UK population in Europe and your EU population in Britain.

For example, she offered a short-term solution for those EU nationals in Britain, who can opt for the subtle status scheme which is in its third stage of the pilot and open for most people.

“Once you’ve obtained your registration, so, your settled or pre-settled status, you’re obviously in the very best possible position to be able to ensure that you can travel in April.” This would then give EU nationals in Britain a document allowing them the ability to change employers, open bank accounts, rent a home, and so on.

This is one of the risk-mitigation strategies that recruiters can take to limit the Brexit impact on recruitment, Louise added, as an example of immediate-term planning. There is also the short-term planning — look to potential new starters and think about whether they need to move country. “Would they have the ability to work and could they take advantage of those free movement provisions? It’s also about, in that sort of short term, considering the people that you have already employed.”

And then, the longer term: “[Look at] what your recruitment strategy ought to be into the future. Now in Europe, that’s probably going to be British nationals needing to apply under the schemes that are in place in the EU 27.”

And once all that is known, and put together as a potential strategy, you want to talk to each of the parties in your organisation on the points of interest to them, such as the C-suiters, line managers, those in finance, and others. Keep them in the loop as much as you can so they can plan their own processes down the line.

4. Keep up your EU outreach

There is a huge skill set in the EU that cannot be ignored. And we need to somehow continue to capitalise on that. Sarah put it succinctly:

“The best person for the job might not be in Britain. That’s the case.”

All three panelists offered personal anecdotes to point out the diverse range of talent from continental EU countries. Sarah, for instance, talked about her cat’s Romanian veterinarian, her obstetrician from Poland, and her dentist from another eastern European country. She also went into detail about the labour shortage in the agricultural economy in Kent, where she lives, and how that gap was filled with ‘migrant workers’. Brexit potentially brings a double whammy of no longer being able to bring in this skill set and not being able to export these foods to the continent.

Plus, “if we’re losing people moving into Britain into those positions,” she said, “we suddenly have a situation where we’re going to have to retrain or train an awful lot of British workers to do those jobs. And that’s in all sectors, I would say.”

Sarah drives the point home: “I don’t think there’s any way that British companies will stop employing EU nationals because they’re our closest neighbours. It’s a huge skill set. They’re skills that are just traditionally employed in Britain from other member states.”

Don’t dismiss EU talent

Louise concurred, adding that not only would accepting EU applications fall under the discrimination legislation, it would in fact be wise to continue encouraging EU-based talent to apply for roles in the UK, and be clear about how you, as a recruiter and employer, have an open conversation about the uncertainty that Brexit brings in terms of relocation. Be open about your willingness to do everything you can to facilitate such a move to the UK and be as reassuring as you can.

“If you are a European national in our business or a UK national in Europe, you are welcome, you are valued, and we absolutely want to retain your talents. We are looking for ways that we are able to behave in the same way that we do now and recruit a diverse and valued workforce looking for, as [Sarah says], the very best individuals to fill those roles.”

Otherwise, Louise warns, “you deny yourself an enormous talent pool.” She does offer one point of reassurance from her own work with clients: “What was really positive is that there was no individual I could think of that I couldn’t put anywhere, or there were very, very few. … There’s a whole raft of individuals that couldn’t be sponsored that now could be sponsored, so that’s hugely positive news.”

Sarah offers a similarly comforting insight: “I envisage it being difficult for a period of time, but it’s not going to continue to be difficult. Something will be worked out. At the moment, it’s unclear what that something is and that’s the problem,” she said.

“It’s the lack of clarity. It’s not a situation where you should be saying, ‘We can’t employ EU nationals, it’s going to be be awful’, but I [do] think for the next couple of months it might be fairly difficult. That’s the time when you need to reassure people, both people that you’re looking to recruit and people who are already working for you; ‘Stick with us. It’ll work out, it’s got to work out.’”

5. Be empathetic and knowledgeable

There are numerous “unknown unknowns”, as Matt called them, that recruiters may not be aware of in light of Brexit implications for employees and candidates. For instance, Sarah shared an anecdote of a German colleague who went through a complicated process with his car insurance company because his driving licence may no longer be valid post-Brexit, and therefore he may have to retake his driving test.

With this kind of granular impact, the impact of Brexit on employment is felt at the day-to-day level as much as it’s felt at the company-wide level. Keep that in mind as you communicate with your current and potential employees, being fully transparent about your role and how you can help, Louise advised.

Adding the caveat that her answer was different from two days earlier – again a testament to the day-in and day-out of Brexit uncertainty – Louise said: “The best thing that employers can do … is to show that they’re on top of the registration schemes. That they can help in terms of either directing queries, [or] provision of support in terms of making these applications.

“It’s really communicating with those individuals who are impacted and showing them the way in [which the test can be applied]. So there’s obviously a number of ways in which you can communicate with those particular schemes.”

In short, you want to show your employees and candidates that you’ve got their back.

“In terms of the advice that you provide, [you] could be directing them to the government website,” Louise said. “It could be providing legal support, guides, webinars, all of those sorts of things which show that you care and you are considering the position of the individuals that you employ right at this moment and that you want them to stay.” She again referenced the white paper and the importance of looking at it as a potential beacon for recruitment planning.

Communication is absolutely key to the whole recruitment and employee management process, Matt said. “It would be making that reassurance explicit,” he said. “You could write [that] in your job ads.

“I would state explicitly ‘we welcome applications from EU nationals’; ‘this is what we will do to support you’, ‘this is how much we love you’, that kind of stuff. I would make it absolutely 100% explicit. [This] is what I would do as a recruiter.”

But what can recruiters do right now in returning to their desks for the afternoon, in the midst of all these Brexit HR implications? All three panelists were adamant that you must reassure your colleagues that you have an eye out for them. And that things may get clearer next week, and until then, it’s a waiting game.

Which brings us to…

6. Stay the course

“Keep calm and carry on,” Sarah said, acknowledging a very British cliche which is nevertheless very relevant right now. “I think for now we might just have to, because there’s very little we can do right now that is going to change the outcome at all. You can make things slightly easier for the people who work for you but you can’t change whatever the process is going to be in April.”

Matt echoed that sentiment. “For all of the uncertainty and doubt … I would say reassurance and calm. It might not be true at the moment, but I would go for reassurance and calm… once people are in that pipeline and you’ve started talking to them it will become easier and easier because as they get further into the process they’ve spoken to you more, [and] they’ve learned more about the business. They know things aren’t [going to] fold.”

He emphasized that this message would be more powerful than sidestepping the question or pretending that you have all the answers.

“I guess [it’s] being authentic to yourself and saying:

“‘We don’t know what’s going to happen, but we’re going to support you through the things that we don’t know.’”

All in all, it’s OK to feel frustrated and uncertain about the road that lies ahead. Every recruiter and employer feels the same way, as Matt testified in a recent blog post on Brexit HR implications. Know where you can plan, and know where you can’t, and keep everyone in the loop as much as you can. The human factor is a powerful one in this case, and empathy and moral support goes a long way.

Related:
Bad news for businesses affected by Brexit uncertainty
Don’t forget the ‘human’ in Brexit HR implications
Brexit Project Manager job description