- Talent Management
Last week at this time few people could have predicted that Britain would be leaving the European Union. Indeed, most polls suggested the remain side would win by a small margin. On Friday, in the UK and around the world, markets crashed and businesses and government employees went into crisis. Beyond the obvious business ramifications (can and should German, French and Dutch companies among others continue to have offices in London and if so, under what conditions?), the EU itself had to address the fears of thousands of British employees based in Brussels (will they remain employed by the EU now that their nation has voted to leave?). Simply put, the outcome of last Thursday’s referendum will require the business world to come up with the most complex “exit strategy” in the history of modern business, and there is mounting pressure–on both sides of the border–for the strategy to start being executed immediately.
To date, some business and government leaders have already started to take charge. London’s new mayor announced that the 1 million Europeans living and working in London will remain. How he will actually ensure their job security and residence is another story. The EU itself has also assured that its British employees will be guaranteed their jobs and the right to remain living in Brussels. Business leaders have responded with different degrees of solidarity. Rolls-Royce, owned by the German BMW, has already warned that jobs are at risk in the UK. Other European companies have also hinted at pulling out of the UK. Ireland, with its English speaking base, has been cited a possible new location.
So what should UK and EU companies be doing at this time to manage talent and remain productive, even as crisis looms? Since Friday, financial experts around the world have been weighing in to share their thoughts.
Ian Stewart, the chief economist of Deloitte UK, observed, “Negotiating and implementing Britain’s withdrawal from the EU is huge task. But in tackling it our nation can draw on great strengths. The UK is in the top tier of the world’s most competitive economies. We have strong institutions and a highly skilled workforce.” Stewart added: “Our economy is a magnet for inward investment and enjoys one of the lowest unemployment rates in Europe. The UK faces a period of uncertainty and of great change. But the resilience and dynamism of our economy and institutions will be huge advantages as we start to navigate a prosperous future outside the EU.”
Giles Williams, at KPMG in the UK, was less optimistic. “Although it was well known that the referendum result would be a close call,” he said, “The leave vote will send a shudder through the financial services industry.” Williams went on to say:
The Financial Services industry needs to quickly develop its ‘asks’ of politicians to make sure that financial services can continue to play its crucial role in the wider economy. It is critical that the negotiating teams fully understand the implications and consequences of dislocating European capital markets, banking, insurance and asset management on the economy both here in the UK and in Europe…In terms of priorities for the economy, the ability for Europe to access London’s well developed markets in insurance, securities and banking is critical. Equally UK-based firms must be able to continue to provide financial solutions to the market, corporates and individual citizens across Europe and internationally.
Mark Weinberger, Ernst and Young’s global chairman and CEO, issued the following statement:
Today’s UK referendum results on European Union membership will mean more uncertainty for businesses around the world as they navigate the complex implications of the UK leaving the EU. In a global economy already struggling with slow growth, this may further dampen the outlook. The broader consequences to the EU also remain uncertain at this time. The UK has strong political, economic and financial systems and is well able to deal with short- and longer-term effects of Brexit.
So what is in store? The only thing that seems certain is that over the coming months, we can expect to see businesses engage in an exit strategy on a scale larger than anything previously witnessed. Millions of British and European employees will be impacted and the exit will involve complex negotiations on issues of trade and employment visa issues. On the upside, lawyers specializing in both international trade and immigration will likely see a surge in work throughout Europe.