Implications of Brexit on HR

Published: 31 May 2016

It’s not long to go until the 23rd June.  Are you ready?  Are you panicking? The good news is that if we do exit we wouldn’t immediately go into DEFCON 1. We need to give 2 years notice during which we would negotiate the terms.  Whether this transitional world and the uncertainty it brings is good news for the future of the UK is a debate for another time.  For now I’m interested in the impact on HR, the teams I support and how they’re reacting.  

For my HR clients it’s certainly an interesting time with much talk around what may arise, the impact on their HR functions and also most importantly the staff they support.  These issues could be potential changes to employment law policy such as restrictions on working time and rules around holiday pay, collective redundancy consultation and TUPE.  It seems unlikely that all EU law would be removed at once.  The approach would most likely be gradual.  Also many of the EU employment rights such as family leave, holiday pay and discrimination are seen as a positive so it seems doubtful that UK employment law would significantly change at least in the short term.

The more critical and passionate discussions are those focused on how free movement would change with Brexit and the impact of this.  The current right of EU citizens to freely live and work across the EU is of paramount importance in supporting employee mobility, labour supply and flexible recruitment.  Industries such as manufacturing, retail and hospitality would suffer immensely and HR teams must be prepared for major disruption.  The degree of Brexit could vary but the effect on the UK economy will definitely be visible. Even in the run up to the referendum many clients are pausing on their recruitment and talent plans as no business likes an uncertain world.  The sense I’m getting from my clients is fear that the result of Brexit would mean major gaps and disruption to the UK labour market currently filled by both skilled and unskilled EU nationals.

I also wonder how those employees who may be affected by these potential changes feel.  My HR clients are in a very sensitive situation, keeping non-UK staff engaged and ensuring their wellbeing is considered whilst we wait for the referendum.  The uncertainty for those EU nationals who would be affected and their families must be extremely stressful.  I wonder if they are ready?  And if they are panicking?

Jane Firth is a Consultant in the HR Practice based in London 

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