First Brexit Case Study: Adapt your workforce in time for Brexit
Danish businesses operating through UK companies, which rely heavily on an EU-based workforce, should initiate risk management programmes such as immigration status audits to assess the impact of Brexit on their business model.
A UK-based food manufacturer
Advising on Brexit, we are often asked how to address the risks and opportunities relating to employees in the UK. In this first Brexit case study, we have outlined some of the key considerations.
A Danish business within the food manufacturing industry has concerns about the on-going Brexit negotiations. The Danish manufacturer has factory operations based in the UK, which operates through a UK Company. The UK company supplies both domestic and foreign markets.
One way for the manufacturer to maintain his competitive advantage is to hire EU-based (but non-UK) factory workers, who for short or long periods come to the UK to live and work. Brexit is likely to end the freedom of movement for workers within the EU, and the UK's ability to introduce new immigration controls on potential EU migrants poses a serious threat to the manufacturer's business model.
No 'fix-all' solution available yet
With a changing political environment and the Brexit negotiations far from complete it is currently not possible to give the manufacturer a 'fix-all' solution. It is, however, possible to arm the manufacturer with a set of tools to quickly be able to adapt to the changing landscape.
Our recommendation: Immigration Status Audit
In the current environment, we recommend:
- that the manufacturer sets up a task-force responsible for conducting an immigration status audit for his UK-based operations as well as keeping it up to date as the Brexit negotiations evolve;
- that the manufacturer adopts a proactive communication approach with his non-UK employees and the market to improve, attract and retain operation-critical employees, and that the manufacturer offers assistance and information to key employees in risk of losing their right to live and work in the UK; and as part of such efforts,
- that the manufacturer considers assisting his key employees in applying to the UK authorities for the right under UK law (not EU law) to continue to live and work in the UK, regardless of the outcome of the Brexit negotiations.
In respect of the immigration status audit, the audit should for example asses how the end of the freedom of movement for workers within the EU may impact the UK operations based on both best and worst-case scenarios.
The audit should include an examination of the impact on both the current and expected future workforce as to who could/would qualify for 'settled status' (meaning workers who would be free to live in the UK, have access to public funds and services and go on to apply for British citizenship) and who would be treated like other non-EU nationals.
The examination should be supplemented by an analysis of the manufacturer's existing expat arrangements as well as, on a more practical level, the impact on accompanying family members.
The task-force would be able to supply the management with regular updates on the implications of Brexit, which in turn could ensure that the appropriate precautions were taken. Our advice includes very specific recommendations in respect of both existing employees and their family members, as well as recommendations relating to securing an appropriate work force going forward, regardless of the outcome of the Brexit negotiations. Securing an appropriate workforce in the UK might prove to be the most important priority for Danish companies in the UK, and this in turn points to a need for ensuring that an effective HR strategy is in place to attract and retain appropriately skilled employees, both in the short, medium and long term.