How to Manage the Impact of Brexit on HR and Your Workforce

Posted on: 31st Jan 2020 by: Dêmos HR Solutions

How to Manage the Impact of Brexit on HR and Your Workforce
How to Manage the Impact of Brexit on HR and Your Workforce

Brexit HR implications are still somewhat unknown, much like the specific terms of the deal itself. As an employer, it’s hard to know for certain exactly how Brexit might impact your workforce and your business once a deal has been finalised. Here we look at the elements of Brexit that we do know about and make recommendations to help you feel more prepared for any Brexit workforce issues when the UK finally does leave the European Union.

Since the 2016 referendum, domestic UK companies and UK owned companies located within Europe have already felt some impact as a direct result of the outcome of the vote and the issues it raised in relation to immigration. With a downturn of around 95% of EU nationals joining the UK workforce since 2016, the main HR focus for businesses will be to retain skilled staff who wish to stay in the country and how to fill the gaps left by employees who return to their country of origin. 

Brexit and Employment

UK industries which employ a large number of EU nationals are likely to be the most vulnerable to a Brexit workforce shortage. Industries like the public sector, construction, manufacturing, hospitality and farming industries could be left with a smaller talent pool and difficulties filling vacancies, especially around more seasonal roles. These issues relating to Brexit and employment could be avoided in part thanks to the EU settlement scheme. If a deal goes ahead in March, this government scheme will offer a transition period for current EU national UK residents who will need to register by 30th June 2021.

Members of your workforce who have been continuously resident in the UK for a five-year period are able to apply for ‘Settled Status’. Settled status will allow these individuals to stay and work in the UK for as long as they like. If they’ve been continuously resident for less than 5 years, they’ll get ‘Pre-settled Status’ which will give them a further 5 years to stay in the UK, then allowing them to convert to settled status. EU citizens who are awarded settled or pre-settled status will be able to continue their role in a company, helping to prevent the loss of valuable employees.  

The cost to apply for settled status which had previously been announced as £65 for anyone aged over 16, and £32.50 for under 16s was scrapped. However, as an incentive to encourage members of the workforce to stay, businesses may wish to support employees in the process for registering themselves and their families. Click here for the full information from HMRC on Settled Status and Pre-settled Status.



Brexit and Workforce Planning

Start by identifying the percentage of your workforce who are EU citizens, who have the right to remain in the UK, and who may be at risk of leaving or wanting to leave. Then map their skills and their roles to understand which areas of your business could be affected if those staff choose to leave and take their skills with them.

Your HR plan should look at options for retaining the talent in your company, redeploying staff, and ensuring your business is an attractive recruitment proposition, to successfully pre-empt any gaps and offer business continuity as much as possible.

For further support in developing a workforce plan in the context of Brexit, both HMRC and CIPD have created useful guides including an Employer’s Toolkit and Brexit workforce planning.


Brexit and Recruitment

When it comes to Brexit and the UK workforce, having a contingency process and budget for new recruitment processes is advisable, as you aim to hire the same skills from a smaller cross-section of potential candidates.

Ensure clear communication with your preferred recruitment agency, so you’re confident they fully understand the risks and consequences to your business from losing agency staff. Find out whether they already have a bank of suitable candidates or whether they have started sourcing alternative candidates.

It may be helpful to explore different avenues for finding new sources of labour, for example, it may be worth considering the advantages of making connections with local prisons or ex-offender services, which could mutually benefit the community whilst replacing lower-level skilled workers at the same time.

You may also want to consider applying for a sponsorship license, but there are both cost implications and restrictions on the type of labour you can recruit under this scheme, so you need to determine if it’s the right approach for your business.


Brexit and HR

Once the Brexit deal is agreed by the government, businesses and their employees will have a clearer understanding of Brexit HR implications and where they stand in relation to employment law and worker’s rights.

By creating a HR strategy that will accommodate the changes brought about by the UK’s exit from Europe in advance, businesses will be in a proactive position to protect their teams and be responsive to changes as they occur to ensure the impact of Brexit on the workforce is dealt with as sensitively and effectively as possible.


If you require support with workforce planning or developing a strategy to limit the impact of Brexit on your workforce speak to Debbie at Dêmos HR Solutions on 07974 695 365, or complete our enquiry form, for professional advice in times of political uncertainty

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