The UK will leave the EU on the 29th March 2019, and a survey undertaken by the British Chambers of Commerce and Bibby Financial Services indicates that 62% of UK firms have yet to formulate any impact risk assessment.
Small businesses in particular appear to be unprepared, with 69% saying that they have made no Brexit plans. This may be down to a misunderstanding that only large companies and businesses that undertake trade overseas will be affected.
And small firms are unlikely even to have the capacity to make plans for all the possible outcomes.
In the event of a no-deal Brexit, 21% of the 2530 businesses surveyed say they will reduce investment, and 20% indicate they would re-locate part of their business to the European Union. 18% foresee recruitment being cut.
One of the few certainties is that Brexit will significantly affect recruitment. After 29th March all EU nationals who reside in the UK, or who wish to enter it, must register for ‘settled status’ if they are to work and live in the UK.
Looking further ahead, from 21st July 2021 EU citizens and any family who live with them must have UK immigration status to work in the UK legally. Many UK businesses are reliant on the skills of EU residents, and the pool of available talent will be significantly reduced. Recruitment firms will need to work hard to make the UK an attractive proposal for overseas jobhunters.
With the Big Day now looming within a matter of months, the BCC has also found that continued confusion has led to some businesses waiting for clarity before they make any plans. The long list of things that need to be addressed, such as contract re-drawing, supply chain scrutiny and multiple contingency plans, may have led some to simply procrastinate about preparations.
Others appear – incorrectly – to believe that Brexit will not affect them at all. UK businesses that do not have direct deals with EU firms may still find that their supply chains are affected, or that protection of their intellectual property is invalidated.
The government is still maintaining that a no-deal scenario is unlikely. At a press conference at the end of the recent Salzburg EU summit, President of the European Commission Jean-Claude Juncker’s quip “Don’t worry, be happy, don’t worry” is unlikely to reassure UK business analysts. Their advice is to plan for all eventualities – and to start right now.