Brexit has created workforce planning complications, such as retaining and recruiting staff, and skill shortages. Add to this the impact of the coronavirus, the numbers out of work continues to grow. How will Brexit impact UK employees and employers from both a financial, workforce planning, and talent perspective?
To delve into this subject and consider technological solutions, Digital Journal caught up with Steve Black, Co-founder and CSO at Topia. Of concern is the continued uncertainty when it comes to Brexit and the working relationship with the EU and UK. Many organizations are wondering what Brexit means for their industry, especially with the burden of compliance and the need to ensure their employees are meeting EU compliance when traveling.
Digital Journal: Why is there still a great deal of confusion over the implications of Brexit?
Steve Black: While Brexit was made official in early 2020, the UK is currently in a transition period – where we’ve left the EU, but we’re still playing by the old rules. 2020 was supposed to be all about negotiating a clean break – or risking a no-deal Brexit, without any formal agreements in place for a smooth transition. And then COVID-19 happened! So, what life and regulations look like post Brexit is still very much in the air.
Enterprises with mobile employees often struggle to determine where they have compliance exposures and when such exposures are triggered. The uncertainty of Brexit has made this issue more complicated. International business trips, assignments, and relocations affect where the organization is responsible for payroll withholding, paying social security taxes, and where organizations have permanent establishments. HR and accounting departments that fail to keep track of these mobile employees and the resulting compliance obligations risk paying hefty penalties. The next few months will hopefully give some clarity on how Brexit will ultimately affect remote work, business travel and location based compliance between the UK and the EU.
DJ: How worried should businesses be over the lack of action?
Black: Businesses should be appropriately anxious and very much in contingency planning mode. Planning and replanning is the name of the game and will be for the rest of the year. Organizations need to have a plan of attack in the event of a no-deal Brexit, and anything short of that should make life easier.
Additionally, agility will be put to the test in 2021, and now is the time for businesses to invest in technology that will help them stay agile during this everchanging world. It is critical to be flexible and agile because clarity on what Brexit means for HR may come down to the wire, and businesses that can pivot plans have the opportunity to grab top talent, stay compliant and avoid fines. The combo of Brexit, COVID-19, and new regulations means that businesses can’t wait for stability – it may never arrive!
DJ: What does Brexit mean for some key industries?
Black: Brexit has wide-ranging implications for almost all industries. Lots of noise has been made about the UK’s fishing waters and what rights the EU can maintain. Likewise, the question around what rights London-based financial services firms will have to operate in Europe come 2021 is very much up in the air. For many, this meant moving key roles and staff to European financial hubs in Germany and other EU locations – and for others, the wait and see approach is running out of time.
DJ: What will be the impacts on businesspeople who need to travel?
Black:With EU regulations (Posted Worker Directive) going into effect in 2020, change and increased complexity were already on the horizon – even without Brexit. Brexit is likely to mean increased paperwork and visa applications before traveling to work across Europe. Whether it is online, simple, and cheap or offline, costly and painful is still very much in up in the air. Thankfully, 2020 has trained organizations on how to work virtually – so some extended remote work in early 2021 while some of this finally becomes clear may not be so hard after all.
This also impacts business travelers from a compliance standpoint. There will be new paperwork that needs to be filled out in advance of many business trips, new regulations for travel periods, and new compliance implications.
