Global HR

4 Ways HR Can Navigate Brexit’s Impact on UK Business

September 2, 2021
November 7, 2023
Lattice Team

Brexit is no easy task to manage. It has been highly anticipated for years, and although we understand that businesses across both sides of the pond have been doing the best they can to prepare for it, there are always going to be a range of different barriers and challenges to overcome when going through the actual process.

The UK officially left the EU on 31 January 2020, and following this, EU nationals living in the UK were given until 30 June 2021 to apply to stay in the UK. According to figures from the Home Office, the total number of applications as of 30 June 2021 was 6,015,400, with over half a million applications still not concluded at the time of writing. This level of uncertainty is confusing, and we understand the weight that you as an HR professional are carrying on behalf of the business.

You are balancing the practical aspect of Brexit while also needing to encourage a positive outlook across the company, to make sure employees know they will be supported and looked after. You have a duty to simultaneously focus on the present and the future. Not only are you determining ways to continue working with existing EU employees in your business, you are also managing the process of bringing in new talent, and this is all against a backdrop of the pandemic, where working styles and COVID regulations are constantly changing.

It is no easy task, but by putting clear priorities in place you can make sure you are meeting the needs of your people, while also planning for the future. Below we’ll discuss the different factors to consider when it comes to managing the impact of Brexit, and how you can lead your people into the next stage of their journey.

1. Deal with the here and now.

There are many practical elements to consider and we understand it can seem daunting. This is why it’s important to deal with the present before looking towards the future. Brexit has created economic volatility and this is creating indirect consequences for things such as bonuses, financial incentives, and pensions.

The cost of doing business with the EU has increased due to the new trade agreement, and those employers that have previously relied on EU funding, e.g. through the Common Agricultural Policy may be seeing a gap in funding. The UK is also no longer required to abide by EU legislation, which means certain rules and regulations surrounding areas such as pensions may be repealed or altered.

This is all something for you to monitor as the government continues to make changes surrounding legislation, and as your organisation settles into a new groove with increased administrative and business costs.

2. Look ahead to how Brexit impacts recruitment.

Some of the questions you should be asking yourself when it comes to recruiting talent post-Brexit are:

  • How can you organise yourself globally if you’re UK-based? 
  • If you’re US-based with a UK office, how do you navigate the post-Brexit landscape to make sure your people overseas are looked after and getting the support they need?

Overseas Recruitment Into the UK

According to Anna Stobart, Founder and Director of Hafton Consultancy Ltd, “The most important thing for you to do is make sure your people have the proper paperwork to be living and working in the UK”. The first stage of this entailed supporting EU nationals in the UK with applying for settled or pre-settled status under the European Settlement Scheme by 30 June 2021.

As we are now past this date, the post-Brexit immigration system is in place. For UK-based leaders and US leaders with offices in the UK looking to employ EU nationals, the process is the same. Employees working in a regulated profession requiring set qualifications will need to make sure these are “officially recognised”, and HR professionals should support incoming talent with securing approval for these qualifications from regulators prior to their arrival in the UK.

Overseas Recruitment Into the EU

UK nationals working in an EU country will need to seek permission from the country they are based in to continue working, but it is important to note that there are differences in the paperwork across EU countries. You should review all information shared by the European Commission, and then support affected employees with the required permission applications and relevant arrangements needed for them to remain in the country they are based in.

The key thing for US companies to keep in mind is there is no longer free movement for people between the UK and EU countries. The correct documentation will be needed when managing existing EU nationals in UK offices and vice versa.

3. Acknowledge salary differences.

“In addition to the paperwork aspect, with the imminent shift to hybrid working as a result of the pandemic, and working from anywhere now a possibility, you need to be careful about employing people on a UK salary if they live in a country with a different cost of living. This can be an ambiguous area and requires your business to have a clear, thought-through philosophy around rewards”, says Anna Stobart at Hafton Consultancy Ltd.

If an employee’s contract says they are employed in the UK but they are working from overseas, this needs to be re-negotiated after establishing the local market pay data where the employee is based, and determining what is reasonable for both the business as a whole and its employees.

4. Be transparent with employees.

Not only is Brexit creating a range of new regulations and rules for businesses to be aware of, it is also important to remember the impact it is having on employee mental health. As we know, things are in flux across businesses for a number of reasons, but the stress surrounding Brexit for those who are affected needs to be understood and managed.

One way this can be mitigated is through developing a clear understanding of how Brexit is impacting different parts of the business, and then communicating this clearly with your people along with a plan of how the impact can be managed. You should look into the range of resources available, for example, the Chartered Institute of Personnel and Development’s comprehensive Brexit Hub, and tap into your network of peers to share knowledge.

You should then relay this back to employees so they have the information in hand and feel like they’re being brought along on the journey. This will also develop their trust in the business and make sure they see organisational leaders as actively navigating them into a post-Brexit world.