{"id":8025,"date":"2017-11-10T11:51:01","date_gmt":"2017-11-10T09:51:01","guid":{"rendered":"http:\/\/newinsights.oeb.global\/?p=8025"},"modified":"2017-11-17T13:58:53","modified_gmt":"2017-11-17T11:58:53","slug":"brexit-issues-for-the-uks-hr-professionals","status":"publish","type":"post","link":"https:\/\/oeb.global\/oeb-insights\/brexit-issues-for-the-uks-hr-professionals\/","title":{"rendered":"Brexit issues for the UK\u2019s HR professionals"},"content":{"rendered":"

\"\"<\/a>In a week when The Observer reported that the Bank of England predicts that up to 75,000 jobs could be lost in the financial services sector following Brexit, and The Daily Telegraph reported that The Study for the National Institute Economic Review suggests that UK families face hikes of up to \u00a3930 in their annual shopping bills if Britain leaves the European Union without a trade deal, the Financial Times\u2019 London headquarters played host to a Business Briefing on Brexit.<\/p>\n

 <\/p>\n

 <\/p>\n

Intended for senior executives, especially those specialising in HR and related functions, the event was titled, \u2018Brexit revisited: Is it time for talent managers to act \u2013 or still wait and see?\u2019<\/a> Moderated by Michael Skapinker, Contributing Editor and columnist on business and society at the Financial Times (FT) and Executive Editor at the FT | IE Business School Corporate Learning Alliance,<\/a> the key speakers were Daniel Dombey, the FT\u2019s Brexit Editor, and James Blitz, the FT\u2019s Whitehall Editor.<\/p>\n

 <\/p>\n

Twelve months after a similar Brexit Briefing at the FT \u2013 one of the FT | IE Corporate Learning Alliance\u2019s regular \u2018Business Briefings\u2019 – Brexit continues to be a concern for the talent community, despite attempts by the UK Government to begin fleshing-out the terms of UK-EU separation.<\/p>\n

 <\/p>\n

Freedom of Movement<\/strong><\/p>\n

 <\/p>\n

Much has still to be resolved before action can be taken on strategic and practical HR issues, such as freedom of movement and the retention of EU staff. Meanwhile, EU employees living in the UK are beginning to vote with their feet; the banking community is ambivalent about the future global status of London, and European capital city Chambers of Commerce are circling the City.<\/p>\n

James Blitz explained that three key issues predominate in the on-going negotiations in Brussels:<\/p>\n

 <\/p>\n

\u2022 The UK Government\u2019s financial obligations to the EU<\/p>\n

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\u2022 Northern Ireland\u2019s status<\/p>\n

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\u2022 The status of EU nationals in the UK<\/p>\n

 <\/p>\n

\u201cOn the first issue, the EU wants 40 to 60 billion euros from Britain, while the UK is only offering some 20bn euros,\u201d said James. \u201cThere\u2019s no obvious solution to the question of the border between Northern Ireland and the Republic of Ireland and little progress has been made on this issue \u2013 but there\u2019s been progress over the status of EU nationals in the UK. Indeed, there are indications that the negotiating parties are close to a deal.\u201d<\/p>\n

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Trading Arrangements<\/strong><\/p>\n

 <\/p>\n

James revealed that, while a deal on the UK\u2019s financial obligations seems much closer than it was, this will prompt further technical difficulties over such things as the UK\u2019s trading arrangements with the EU, and the transition agreement as the UK leaves the EU.<\/p>\n

 <\/p>\n

\u201cIt\u2019s highly probable that the UK isn\u2019t going to get a free trade agreement with the EU before it leaves the Community,\u201d said James. \u201cSuch an agreement would take too long to negotiate. However, the UK may get some sort of offer over trade. The problem is that the British Cabinet is divided on this issue.<\/p>\n

 <\/p>\n

\u201cFaced with this state of affairs, those in the HR world are likely to doubt if the Brexit Bandwagon will move forward any time soon.\u201d<\/p>\n

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EU Nationals\u2019 Status<\/strong><\/p>\n

 <\/p>\n

Daniel Dombey highlighted one of the key Brexit-related HR issues: the status of EU nationals in the UK once Brexit has occurred. He explained, \u201c\u2019Brexit\u2019 involves three key things: legislation; administration to implement the legislation, and negotiation. Most of the current concern relates to the transition arrangements.<\/p>\n

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\u201cThe likely transition period after the UK leaves the EU means that, until, say, 2020\/ 21, everything will operate as it has been operating. So, worries about what will happen in 2019 immediately the UK leaves the EU have receded somewhat,\u201d he said.<\/p>\n

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\u201c\u2019What?\u2019 and \u2018When?\u2019 are key questions for Brexit,\u201d he added.<\/p>\n

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\u201cThere are currently some 3m EU nationals living in the UK and over 2m of them are members of the working population. A few years ago, that number was only around 500,000 but, now, there are around 1m EU nationals working in \u2018low skills areas\u2019 in the UK \u2013 notably in the hospitality, construction and food processing industries.<\/p>\n

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\u201cIt seems unlikely that there will be any definitive guidance on their post-Brexit status until after September 2018,\u201d Daniel said.<\/p>\n

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Worker Migration Rules<\/strong><\/p>\n

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Pointing out that Britain has qualification rules governing the migration of skilled workers from non-EU countries, Daniel suggested that these rules are unlikely to change \u2013 even after 2021, when the transition period ends. In his view, any changes that are made to this system are likely to favour EU-citizens over non-EU citizens.<\/p>\n

 <\/p>\n

However, there are no similar immigration rules for people with a lower level of work skills \u2013 yet some rules regarding these people need to be established before the UK leaves the EU in 2019. \u201cHere,\u201d said Daniel, \u201cthere are some sources for reassurance but, as yet, no clarity.<\/p>\n

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\u201cBasically, we\u2019ve not made progress. Decisions have been deferred. There hasn\u2019t even been a debate in Cabinet about what sort of deal we want,\u201d he continued. \u201cThe approach by the British Prime Minister, Theresa May, seems to be \u2018tell us what you want, EU; then we\u2019ll react\u2019. This appears to have diluted the UK\u2019s negotiating position.\u201d<\/p>\n

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James added, \u201cThere\u2019s good reason to be sceptical about the proposed transition period. First, two years is too short a time for such a period. Experts say that three to five years would be more realistic to make the post-Brexit arrangements work well. Second, Theresa May claims that the UK will leave the EU but that things will continue as before. However, that means creating a legal architecture to keep the existing customs and trade arrangements in place \u2013 and that will take more legislative time than exists.<\/p>\n

 <\/p>\n

\u201cThe Government says that, starting in 2018, it can move the existing 3m EU nationals in the UK onto \u2018settled status\u2019 \u2013 giving them leave to remain in the UK \u2013 but can the Home Office process all these 3m applications before 2019?\u201d<\/p>\n

 <\/p>\n

Daniel pointed out that EU nationals who\u2019ve been resident in the UK for five years have an existing right to remain, while those who\u2019ve been here for two years or more can apply for \u2018temporary\u2019 status. Then, he said, there are those who are \u2018new\u2019 entrants to the country. He concluded, \u201cThere are lots of potential problems in processing all these people\u2019s claims to remain in the UK.\u201d<\/p>\n

 <\/p>\n

 <\/p>\n

UK Labour Issues and Net Migration<\/strong><\/p>\n

 <\/p>\n

Michael Skapinker raised the issue of UK residents\u2019 rights to access and move around the EU post-Brexit, especially for the purposes of work. He also asked whether, with the rise of the application of artificial intelligence (AI), the UK may need so many \u2018low skill\u2019 workers in future. Moreover, he said, faced with a likely reduction in the UK\u2019s working population, as EU nationals don\u2019t take up job opportunities in this country following Brexit, should this country be devoting more resources to up-skilling its young people via training programmes?<\/p>\n

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Responding to a question from one of the delegates at the event \u2013 asking if there was a way of incentivising highly skilled people to remain in the UK – Daniel revealed that, in the last year, the UK has seen a 59% increase in emigration from the \u2018EU Eight\u2019, that is, the former Communist countries that are now members of the EU. Yet, he said, the UK still experienced net immigration of some 460,000 people in that year.<\/p>\n

 <\/p>\n

\u201cIn other words, we have fewer people coming to this country \u2013 but they\u2019re still coming,\u201d he said. \u201cHowever, in the longer term, the Government is concerned to retain the highly skilled people and, so, must investigate what incentives it can offer them to remain after Brexit. Furthermore, in the short term, strawberries need to be picked \u2013 and old people still need to be cared for \u2013 so there\u2019s still a demand for \u2018low skilled\u2019 migrant workers in the UK.\u201d<\/p>\n

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In James\u2019 view, \u201cThe UK Government is so focused on negotiations that it leaves the \u2018real world impact\u2019 of these affairs to take care of themselves.
\n\u201cMoreover,\u201d he said, \u201cas net migration declines, this will change the Government\u2019s view. This may, perhaps, play out via a more generous deal for EU citizens resident in the UK, along the lines favoured by the Chancellor of the Exchequer, Philip Hammond.\u201d<\/p>\n

 <\/p>\n

Skills Issues<\/strong><\/p>\n

 <\/p>\n

Daniel added that \u2018delivering Brexit\u2019 means, effectively, ending the free movement of labour between the UK and the EU. He said, \u201cFor many people, this is the key issue of Brexit \u2013 even though figures show that EU migrants are net contributors to the UK economy and this is at a time when the UK economy is experiencing full employment. So, how can we expect to lose the EU migrant workers and then expect the vacancies this causes to be filled instantly by UK workers \u2013 without any difficulties?\u201d<\/p>\n

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\u201cThere are two views,\u201d Daniel observed, \u201cOne view is that the UK will have to \u2018skill-up\u2019 its workforce to deal with the shortfall in skills caused by an EU worker post-Brexit exodus. This is an aspirational view because it means creating a revolution in training and work as well as doing everything else!<\/p>\n

 <\/p>\n

\u201cThe other view asks, \u2018what does this mean in terms of economic models?\u201d he continued. \u201cIn other words, if the UK doesn\u2019t get a deal with the EU, does the UK become the home of lower taxes and deregulation, especially in terms of workers\u2019 rights? France, for one, is especially worried that this might become the case. Naturally, the UK Government denies that this will happen but future UK governments won\u2019t be bound by the current Government\u2019s view.<\/p>\n

 <\/p>\n

Longer-term view<\/strong><\/p>\n

 <\/p>\n

\u201cIn the same way that \u2018a puppy is not just for Christmas\u2019, Brexit is not just for 2021,\u201d Daniel said. \u201cIt will take a decade or more for the whole scenario to play out.\u201d<\/p>\n

 <\/p>\n

Agreeing with Daniel, James commented, \u201cBrexit has been seen as an opportunity for the UK to get away from European \u2018red tape\u2019. Yet, in her \u2018Florence speech\u2019, Theresa May said that the UK is keen to maintain regulatory standards and will not use the EU withdrawal bill to push through deregulation. Nonetheless, it\u2019s difficult to know if this will be case in the long term.<\/p>\n

 <\/p>\n

\u201cProductivity is a key issue,\u201d James added. \u201cThe UK is about the be downgraded because its productivity has fallen over the last ten years. It\u2019s going to take time for the UK to build up its exports with the \u2018rest of the world\u2019, such as the USA, Australia, New Zealand and so on, to a level matching the current level of trade with the EU.\u201d<\/p>\n

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Don\u2019t Panic<\/strong><\/p>\n

 <\/p>\n

Summing up the current Brexit situation, Daniel advised, \u201cDon\u2019t panic. Only since the summer has it emerged that both the UK and the EU want a transition agreement.<\/p>\n

 <\/p>\n

\u201cBrexit presents problems for HR administrators rather for than the workers they administer,\u201d he continued. \u201cBy 2021, any EU citizen who is now in the UK will have been here for some five years and, so, will be entitled to remain if they wish.\u201d<\/p>\n

 <\/p>\n

\u201cFor EU residents who\u2019re already in the UK, things are looking reasonably positive,\u201d agreed James. \u201cHowever, the long-term future for the UK economy is more uncertain. It\u2019ll take until at least the summer of 2018 to see any clarity on this issue. There are still lots of unknowns!\u201d<\/p>\n

 <\/p>\n

 <\/p>\n

Written by Bob Little<\/em>
\nBob Little is a communications professional (a writer, editor, commentator, speaker and broadcaster) who works internationally<\/p>\n","protected":false},"excerpt":{"rendered":"

In a week when The Observer reported that the Bank of England predicts that up to 75,000 jobs could be lost in the financial services sector following Brexit, and The Daily Telegraph reported that The Study for the National Institute Economic Review suggests that UK families face hikes of up to \u00a3930 in their annual […]<\/p>\n

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