September 11.2018, 9.25am

How HR leaders can plan for the future as Brexit looms

In the wake of political unpredictability and a looming Brexit, many businesses across the UK are facing a period of uncertainty.

Brexit has turned the tables and introduced confusion into a market that leans on transparency and foresight to drive operations. Apart from tariffs and trade deals, companies remain unclear as to how the new laws will affect seasonal workers.

With UK labour policies up in the air, due diligence has fallen on HR leaders as they’ve become tasked with developing a strategy to keep labour churn rates down while the 29th of March, 2019, the UK’s scheduled date of departure, draws near.

How Brexit is impacting manufacturing and distribution

There’s one thing that the country can agree on: Brexit is making it more difficult to source talent. Roughly 96 percent of respondents to the LinkedIn Workforce Report 2018 noted that Brexit was having an impact on their company’s hiring strategy.

Manufacturing companies have always been subject to competitive hiring markets given the expertise required for niche positions. And due to Brexit, two out of every five employers have had difficulties finding skilled workers to fill open positions.

“With just under a year to go until we officially leave the EU, it’s clear that this is one of the biggest factors impacting hiring strategies,” Jon Addison, Head of Talent Solutions at LinkedIn UK, says. “With less international talent looking to the UK for career opportunities, the war for talent is more competitive than ever as the UK labour market tightens.”

The EU plays a sizable role in the UK labour market. Roughly 11 percent – or 3.4 million people – of the workforce in 2016 was either from the EU or elsewhere in the world. Nearly 8 percent of manufacturing sector employees were from the EU, and almost 670,000 non-UK nationals were employed in occupations like distribution or manual labour.

While Brexit won’t strip the entire workforce, its impact will be felt by businesses who have come to rely on seasonal workers and outsourcing talent for niche roles. Adding further complications to the matter are the rising costs being incurred in the unsteady international trade market and the eventual tariffs that will arrive once the UK departs from the EU.

The latter has led to an estimated one out of every five manufacturing jobs being at risk of termination once Brexit takes place – which could signal serious disruption to the industry.

Start planning for Brexit now

Companies are maintaining global competitiveness by getting ahead of the eventual disruption. Take Airbus, an aerospace manufacturer, for example.

The company rolled out its contingency plans in mid-July 2018 after the Brexit White Paper failed to reveal a crystal clear picture as to how the country would handle trade with the EU. Part of that strategy includes stockpiling parts for production that would otherwise arrive only when necessary – a sign that the business feels its day-to-day operations, either physically or financially, are at stake.

“We are now activating contingency plans which largely focus on building some buffers,” Tom Enders, CEO at Airbus, says. “So we should be able to mitigate the effects for a short period.”

Companies’ contingency plans across the UK should be detailed and cover every portion of the enterprise. HR, in particular, can make key changes using analytics and digital platforms to reduce labour churn and improve cash flow to support overall business objectives.

Equip yourself with the right information

Flying blind through Brexit will likely lead to disaster. Smart organisations are fighting back by gathering intelligence across operations and using it to make informed decisions.

In HR, this transformation starts with one centralised platform. Integrating payroll, workforce management, time and attendance, recruitment and cost analysis has many benefits including:

  • Reducing capital expenditure and curbing wasteful spending in favour of improved margins. This allows management to yield the payback in as quick as nine months through a variety of performance-related initiatives, which can be used to help business compensate for loses attributed to Brexit.
  • Offering long-term and short-term reporting through advanced analytics and automated data collection. Dashboards like Payroll Variance, Key Costs Trends, Overtime to Gross Pay Correlation and Overtime Trends give management accurate insight into both permanent and seasonal worker trends, allowing them to adjust as news about Brexit hits.
  • Maintaining compliance and promoting workforce diversity throughout the tumultuous period. Detailed personal information on the entire workforce gives leadership reassurance that the company won’t falter despite upcoming uncertainty, and it offers the chance to optimise operations from a labour standpoint.
  • Placing a premium on workforce retention, hiring and training through the introduction of a comprehensive personal profile solution. The tool leverages advanced analytics to support professional growth for everyone in the business, from low-level staff to members of senior management. Can be fine-tuned for leadership development and succession planning, or to create a unique Brexit retention programme.
  • Ensuring that new members receive consistent training across the board, regardless of the volume of entrants in the company’s workforce. Maintaining a sense of regularity and cohesion is critical in ensuring that emerging talent stays with the company for years to come.

Undoubtedly, the labour force will face a short period of chaos once Brexit comes into effect. Businesses that have prepared a strategy to deal with the confusion will likely leap ahead of competitors and maintain fluid day-to-day operations.

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Mark SextonBy Mark Sexton