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Brexit & the UK workforce

Great Britain’s vote to leave the European Union raises thorny questions for the United Kingdom’s contingent workforce and for employers. We examine a few scenarios.

Prepare for change

A clampdown on movement of workers, tighter regulations, major skill shortages… Brexit carries a number of potentially troublesome repercussions for business.

Concerns apply to both permanent and contingent workers employed by UK-based companies. All elements of business—human resources and procurement, in particular—must adapt to coming changes. But a few steps can be taken to help smooth the transition.

Some 1.6 million EU workers are currently employed in the United Kingdom; 88 percent of them would not qualify for a visa under existing rules.

Know the regulatory landscape

Legal experts say the laws affecting contingent workers can be split into two categories, EU-derived law and UK-originated law. UK law is unlikely to change, and some or all EU legislation is also likely to be maintained, particularly if the United Kingdom remains part of the single market.

Still, many believe Brexit will have indirect impact on both contingent workers and companies that employ them.

“There are a number of actions HR and procurement departments should consider to manage direct and indirect risks associated with Brexit.”

Critical questions & next steps

  • Understand and assess the potential impact - Engage your suppliers to audit the current state of your contingent workforce.

  • Plan to reduce your dependency on EU workers - Review your longer-term workforce planning processes to minimize any potential exposure.

  • Secure your access to EU workers, where necessary - Work with your supply base to plan for any changes that may impact your organization.

  • Anticipate and address skill gaps - If Brexit leads to unplanned job vacancies, will you have the right skills available where you need them, and the right number of people?

  • Identify future skill demands - Get a handle on any skills shortages you might face and invest in cultivating these skills internally.

  • Consider labor arbitrage opportunities - Does all current work need to stay in the United Kingdom and/or the European Union? Or, can some roles move to locations with highly-skilled but less-costly workers elsewhere?

  • Explore outsourcing opportunities - Can any processes now performed internally be managed by third-party service providers?

  • Seek cross-industry discussion - Engage in forums inside and outside your industry to share best practices, discuss any legislation changes and ways to connect with government officials and regulators.

About the research

  1. O’Brien, Seon. “PRESS RELEASE: 88% of Current EU Workers in UK Would Not Be Eligible for a Visa.” Social Market Foundation. May 27, 2016.

  2. Barrow, Kevin. “Contingent Workforce: Legal Implications of Brexit for Your Business.” Osborne Clarke. June 24, 2016.

  3. Faragher, Jo. “Holiday Pay Case: EAT Confirms Employers Must Pay Commission.” Personnel Today. February 22, 2016.

  4. Coombe, Fiona. “‘Brexit': How Would UK Leaving the EU Affect Contingent Workers and Employers?” CWS 3.0 Contingent Workforce Strategies. June 8, 2016.

  5. Arnstein, Vicki. “One in Four Jobs Go Unfilled Due to Shortage, UKCES Reveals.” People Management. January 28, 2016.

  6. Grandhi, Kedar. “EU Referendum: Brexit Could Leave UK ‘Critically Short’ of Workers, US Recruitment Firm Warns.” International Business Times. June 14, 2016.

  7. Deutsch, Anthony. “Employment Agency Randstand Says Brexit Could Cause Labour Market Shortages.” Reuters UK. June 24, 2016.