After Britain voted on June 23rd to leave the European Union (EU), the United Kingdom (UK) immediately suffered the resignation of its Prime Minister and the devaluation of the pound to a thirty year low. Whilst the situation has stabilized, the long-term consequences of BREXIT remain unknown. Theresa May, the current British PM recently announced Article 50 would likely be triggered by Spring of 2017. Thereafter, negotiations are likely to take at least two years, and to extend beyond this as the individual ratification process of twenty-seven EU Parliaments further delays implementation. What is clear, however, is that immigration will be central to the negotiation as the UK must balance its desire to restrict immigration to a sustainable level with its need for access to the EU’s single market.
The potential implications to businesses in the UK are considerable. The cost to employers of sponsoring non-Europeans under ‘Tier 2’ is due to considerably increase in the Spring of 2017. The combined effect of these increases with the restriction of highly skilled EU nationals working in the UK will significantly reduce the skill pool available to UK businesses. Accordingly, major corporations have begun to develop a BREXIT Immigration Strategy to prepare for changes to their mobility programs. Best practice would suggest a BREXIT strategy should cover at least four major areas:
1. Communication: Employers should actively engage with their EU national employees. These are uncertain times for EEA nationals in the UK and they will be understandably concerned about their long term ability to remain in the UK. While change may be long away, providing regular updates and clearly communicating the level of corporate support should instil loyalty and reassure employees of their current status and avoid any career changes under a false sense of duress. As a business, you may decide to substantively communicate this once you have been through the following steps.
2. Audit: Know your staff. As it stand there is no need for UK businesses to be able to identify their EEA national staff as they enjoy the same unrestricted ability to work in the UK as British nationals. The possibility of a ‘hard Brexit’ and potential restrictions on that unfettered ability coming into force make it prudent that this population be identified and assessed. This also extends to your British staff working within the EU as any arrangement is likely to be reciprocal.
3. Metrics / Analysis: Once you identify the relevant staff, you need to assess their importance to the business. “Who are your EEA nationals?” “What percentage of the workforce do they constitute?” “Do they include senior members of staff?” “How easily could they be replaced / relocated?” “Are they eligible for Permanent Residence (thereby securing their ability to remain in the UK)?” The data is not a point in time snap shot but rather needs to be updated regularly throughout the negotiation process.
4. Talent Strategy: Once you have gone through the above analysis you can begin to develop a contingent strategy. “Will you support all staff / a proportion of staff / senior staff only?” “What will it cost?” “What happens if they need to leave?” Companies should also factor BREXIT and a potentially significantly reduced labour pool into all levels of Talent Development. Consider your hiring trends, know where employees have historically been recruited and determine the ability to readily source talent in the future. Moreover, develop a VIP list to identify all C-Suite, high performers or essential skill employees and know his or her citizenship and place of employment.
Negotiations are ongoing and we are a considerable way from having a clear picture of what ‘Brexit’ will actually look like. Companies that draw heavily on EU talent for their essential operations in the UK, or send UK citizens abroad within the EU, need to consider whether they want to participate in the discussion. Members of trade associations and business bodies should unite and make their voices heard. If in doubt as to the best route forward, please get in touch with Fragomen who are coordinating client feedback to the UK government.