Companies remain in stasis over challenges posed by Brexit vote

Organisations are unsure where to go next, more than two months after the EU referendum vote

More than six in 10 (63%) companies see a lack of clarity on the UK’s position as a barrier to responding effectively to the challenges posed by Brexit, according to a report from Willis Towers Watson, seen exclusively by HR magazine.

The survey of more than 170 HR leaders found that 28% of are concerned about a lack of budget to deal with the uncertainty, and 25% believe they will suffer because of a lack of available data. Less than one in five (19%) firms have a HR Brexit team or anticipate having one in the next three months, and half (50%) said they have not even considered assessing their current operating model and organisational structure in light of Brexit.

Richard Veal, line of business leader (UK) for reward, talent, communication and change management at Willis Towers Watson, told HR magazine that the survey results should act as a “wake-up call” for firms that have not yet started considering their responses.

“It seems some organisations have been paralysed by uncertainty after the referendum,” he said. “This is a good chance for HR to step up and take the reins to manage a response. This could be a good catalyst for planning a workforce model that is less sensitive to external changes.”

For the UK to leave the EU it has to invoke Article 50 of the Lisbon Treaty. Triggering this will give both sides two years to agree the terms of the split. However, two months after the UK voted to leave Article 50 still hasn’t been invoked. This has left many businesses struggling to gauge what the impact of Brexit will be, and when it will occur.

Kate Griffiths-Lambeth, director of human resources for investment management firm Charles Stanley & Co, suggested that firms should be looking for ways to cope with change, no matter what the eventual outcome is. “We need to be able to anticipate uncertainty,” she told HR magazine. “It would be very irresponsible for a HR director not to be conducting some scenario planning for things, such as pension funds, which are likely to be affected.”

Michael Jenkins, chief executive of leadership institute Roffey Park, suggested that employers approach the challenges using a ‘Johari Window’, which asks users to frame problems in terms of what is known (or unknown) by the individual and by others.

“When it comes to the impact of us leaving the EU, we’re not yet sure exactly what shape that will take,” he explained. “We need to break the problem down into three categories, which have been described as ‘critical’, to be dealt with right away; ‘tame’, which can be planned for; and issues that are ‘wicked’, those which have uncertain elements.

“This is a really good time to be doing preparation scenarios. I would advise HR directors to start thinking of the best, most likely, and worst case scenarios, and plan accordingly. They shouldn’t wait for all the information to become clear, as those two years after Article 50 is triggered will go by very quickly.”

He suggested planners break down the specific issues that Brexit presents in order to plan most effectively. “For example, if there is no freedom of movement, or if it is very tightly controlled, that could be the worst case situation for some businesses,” he said. “So they would really need to start planning a response to that right away.”

Griffiths-Lambeth agreed that businesses should be considering different potential approaches, but also warned against acting rashly. “Because of the scope of business functions that HR is involved in, we need to be viewing Brexit though multiple lenses,” she explained.

“We need to approach this from an intelligent, thoughtful angle, and not in a knee-jerking, reactionary manner, taking into account the long-term goals of your organisation.”