Hot topic: How HR can prepare for a Brexit job shock, part two
Emma Greedy, November 26, 2020
Since March, the spread of COVID-19 and resulting national lockdowns have led to significant job losses around the country. However, a no-deal Brexit could lead to even more.
The country’s manufacturing industry relies heavily upon exporting goods and without a trade deal in place with the EU, factory workers’ jobs could be at risk, particularly in constituencies in the Midlands, North of England, and Wales according to Lexington Communications’ Manufacturing in the Marginals report. So, what can HR do to best prepare for a sudden Brexit job shock?
Philip Richardson, partner and head of employment law at Stephensons Solicitors
At the moment, HR teams need to prepare for all eventualities given it’s still not clear what the impact of Brexit will actually be. Putting plans in place now to identify areas in the business which may be exposed and what risks and liabilities the company may face is critical.
In the manufacturing sector in particular the consequences of Brexit could be felt at all levels and may unfortunately result in job losses. If large scale redundancies are needed, this will need to be planned for and consulted on, so it’s worth considering whether there is enough capacity within the existing HR team to deal with this or whether the business needs to recruit additional staff or outsource support.
It is also sensible for HR teams to consider their present contracts, policies and procedures in anticipation of Brexit and see if they are suitable for what will be needed. For instance, do those companies have contractual lay-off provisions in the event staff are needed to be laid off from work? Preparation really is key.
Gerwyn Davies, senior labour market adviser at the CIPD
We should be careful about making predictions of large-scale job losses in the manufacturing sector. As we saw in the years following the Brexit referendum, employment levels actually rose sharply despite fears of falls in employment. Evidence also suggests that many businesses have already factored in Brexit into their plans by taking specific action in preparation for cross-border checks.
At the same time, any formal change to the trading relationship between the UK and EU will nudge some into looking at the possibility of relocating some or all of their operations; especially if there is cross-border disruption to the supply chain. In this scenario, HR professionals need to weigh up the advantages of relocation with the costly exercise of making workers redundant, and where it is appropriate, relocation.
If firms are considering relocation, many manufacturing firms will need to consult with staff to assess the potential loss of skills and output given the likely reluctance of many workers to leave the UK. Additionally, firms will need to conduct an audit that should include a comparison of wage costs and employment regulation. As we know, the UK remains one of the least regulated labour markets in the OECD.
This article is the second part of the November/December 2020 hot topic. Click here to view part one.
The full piece appears in the November/December 2020 print issue. Subscribe today to have all our latest articles delivered right to your desk