Experts tackle potential relocation issues and upcoming mobility challenges as the U.K. leaves the EU.
By Belinda Sharr
When Brexit unexpectedly happened in June 2016 and defied expert predictions (The Economist reported 85 per cent of polls said Britain would remain in the EU), many HR executives across the EMEA region were left wondering about the future -specifically how the announcement would impact relocation trends. Now that a few months have gone by, mobility strategies are taking shape as the U. K. plans its exit from the EU by March 2019.
Whilst precisely predicting the future is impossible, experts are looking at current trends and making some suggestions that may help global companies navigate the new relocation process for their far-flung employees.
Forward-thinking organisations are looking at next steps with regards to mobility because Brexit will affect employees they may have in the U.K., the EU, and beyond.
Charlotte Sword, global head of human resources at U.K.- based Foster + Partners, describes how communication is key in the transition period:
“[We have] taken a proactive approach towards supporting our European colleagues in our U.K. office by offering regular communication updates and support for residency applications. This gives some reassurance to our colleagues who have made London their home,” she says. Sword also notes that there may be additional bureaucratic procedures, such as visa applications and work permit issues, that are associated with relocating between the U.K. and the rest of Europe. “This could potentially make moving our people around Europe more difficult with time delays impacting project deadlines,” she says.
Abigail Flanagan, senior director of global relocation services at Paragon Relocation, stresses that adherence to any government-issued guidelines will be key in the transition.
“At this time, the future is uncertain as discussions are only just commencing with regards to key players such as the current EU nationals in the U.K. and U.K. nationals in EU countries,” she says. “[My] immediate recommendation would be to continue as normal as discussions will take time, and business needs still need to be met.”
Whilst continuing to operate with an eye on legislation, companies should be aware of potential relocationrelated issues. Some possible Brexit outcomes, according to Flanagan, include added complexities to immigration:
• All U.K. passports will need to be updated in due course to remove the EU reference;
• Border checks may become applicable for travel across Europe, causing delays and potential cost increases for the transportation industry;
• Immigration quotas may be amended;
• Dual citizenship applications may increase; and
• Banking and tax regulations may be revised to reflect the change in status following Brexit.
David Macpherson, senior vice president of global services at CapRelo, says post-Brexit immigration may look similar to Australia’s current system, which evaluates the abilities of workers before allowing them into the country.
“The reestablishment of the U.K.’s national border means immigrants will certainly face greater inspection when trying to enter the U.K.,” he says. On top of new immigration form management, multi-national corporations should also expect the cost of immigration to increase because the Immigration Health Surcharge (a healthcare surcharge to use the NHS) and the Apprenticeship Levy (a new tax on employers making three million pounds or more, requiring them to pay a 0.5 per cent payroll tax beginning 6 April, 2017, funding a new government apprenticeship program) could drastically heighten the cost of relocating expatriate workers.
Experts also indicate that there will be some economic uncertainty ahead, but the historic strength of the U.K.’s economy (it is one of the most economically globalised countries in the world according to the KOF Index of Globalization) should create economic stability sooner rather than later. “The number of relocations could greatly increase in the months leading up to and after Brexit as businesses decide to both enter and exit the U. K.,” Macpherson says.
Elaine Phipps, vice president of EMEA at MSI Global Talent Solutions says that despite Brexit, she believes there will be a strong desire to minimise barriers and ensure the free flow of talent between the impacted countries. She also suggests that the key to a successful relocation is relocating the right employee. After all, if the relocated employee is a great fit, their home country and where they’re moving to becomes less relevant.
“The key driver in selecting an individual for inclusion in a global mobility programme is that he or she is the correct person for the role,” she says. “Companies continually strive to attract key talent from around the globe to their organisations, and this will not alter as a result of Brexit. One would expect that there will be little or no impact of Brexit on candidate selection.”
Still, there are efforts an organisation can make to ensure a smooth transition when relocating employees after Brexit. Companies should identify the key stakeholders that are likely to be impacted by any changes, ensure awareness of any potential issues, and try to understand what areas will need to be examined once the U.K. and EU agree upon an exit strategy, says Simon Mason, vice president of EMEA at Graebel.
“It’s important to recognise and consider the different implications that may result from the various models – including potential prevailing labour and trade models – and the tradeoffs that might have an impact on business activity and the movement of free labour,” he says.
Organisations that feel ill-equipped to handle these new challenges can facilitate their relocation processes with the help of professionals who are able to stay abreast of all the changes and guide them through the process.
“Corporations need to take regular meetings with their professional relocation management companies to stay up-to-date on relocation issues from the Brexit talks,” Macpherson says. Global moving can be stressful for both companies and employees, but “during Brexit, it is especially important to understand the complete needs of transferees and their families to ensure the easing of stressors and to maintain, or even increase, employee productivity.”
With these possible issues, will companies decide that hiring local is better for business? Trends over the past three to five years indicate that companies are looking to employ more local talent in order to reduce the cost in hiring, according to Michelle Moore, chief global mobility officer at NEI Global Relocation. But when local talent with the right skills is not available, it’s necessary to search elsewhere for new employees.
“Changes to the local talent pools are unlikely to occur in the short-term, which will continue to require companies to search for talent outside their own borders. Most EU companies will feel the same,” Moore says. She points out that companies may look to flexible work circumstances to fill gaps. “Additional focus may be placed on telecommuting options in the short-term to determine if it will help fill the talent need, however, we have seen this type of situation in the past and it usually results in the need for relocation after a period to help align the talent with the business needs.”
Moore also notes that there has been some discussion from various companies of potentially moving their EU headquarters from the U.K. to other EU countries. If this ends up being this case, many assume that additional relocations will result.
“However, with the vibrant U.K. market and the resiliency with how quickly the U.K. bounced back after the news of Brexit, many companies are taking a ‘wait and see’ approach as to what, if any, changes will be needed regarding the relocation of offices,” she says.
This will be a challenging time, but changes have taken place before (for example, the U.K. joined the EU in 1973), and companies pressed on.
“It’s important to remember that relocation took place prior to the establishment of the EU and therefore the impact of Brexit will be negotiable,” Flanagan says. “Time will tell, but I don’t believe it will be all [negative]. If an organisation has a business need post-Brexit that requires a relocation, then I firmly believe a solution will be found that benefits all parties involved.”