The world woke up to a new reality on June 24th – the UK had voted to leave the European Union. Immediately the media went into a frenzy projecting all kinds of outcomes, with everyone wondering how to prepare for the Brexit. Most of these outcomes were projected being catastrophic – with none of them working in the favor of neither the UK or the EU. Even though the UK has yet to evoke Article 50 whereby the UK officially requests their departure with no way back from the EU, the UK’s leaving the European Union brings up a myriad of new questions for HR;
- How will this impact immigration to and from the UK with regards to the free movement of workers within the EU? Visa requirements, what will be needed for legal cross border moves?
- How will cost be managed considering that Sterling has dropped significantly in value, thus lowering the purchasing power of GBP salaries in the EU, as well as how will payments for assignments be made within the EU, if the UK is completely outside.
How can business prepare for the Brexit?
HR professionals will immediately need to start looking as some of the following potential issues that can arise from the UK leaving the European Union.
- Global mobility policies will need to be amended taking into consideration that the UK will no longer be a member of the EU.
- The exit of the UK brings up many, new immigrationissues, such as it is very likely that EU nationals living in the UK will now want to become citizens and consequently UK nationals working and living within the EU will want to pursue citizenship in order to stay. The numbers are enormous, given that approximately 1,2 million Brits live in continental Europe alone. This brings up the following question: Should the company cover the costs or should it be a personal expense? Will it be that simple or will strict criteria have to be met?
- Split payroll employees are likely suffer considering with a drop in Sterling, thus reducing their purchasing power and possibility quality of life in the EU country where they live. Should the employee or the employer shoulder any eventual currency fluctuations? This is certainly a policy question and one that would need addressing immediately.
- If Headquarters are relocated to an EU country, which employees should or could be sent? Will nationality play part in the decision of whom to send?
- Does the policy stipulate that major changes in the macro environment allow for adjustments in the employment contract? If not, it would be wise to include it there.
- Policy should reflect the base cost of benefits and taxation including any potential customs’ costs when moving household goods. For companies with a policy that only includes Europe, it may need to be amended to reflect the new reality.
Preparing your company for the Brexit is vital to avoid being caught off guard – remember this a major new development that may have far-reaching effects, as no one can predict how the negotiations between the UK and EU will go. Therefore, employment contracts will need to be looked at and reviewed to take into account: EU nationals living in the UK and UK nationals living in an EU country. Evaluating suitable locations where to relocate operations from the UK will also need to be looked at – where can you get the most bang for your buck regarding rents and how do these locations rank regarding schools and other services.
For a checklist of what steps to take next to get Brexit-ready, please contact firstname.lastname@example.org so you can get a head start before the questions hit your inbox!