Post EU referendum: What it means for talent mobility
12 October 2016
Whatever the shape of the final deal, leaving the EU will change the geographical footprint of many British businesses. The flow of trade and investment will inevitably change, prompting a change in the market focus for many organisations. It might mean moving operations into the EEA to access the single market. Or it could mean focusing on markets outside the EEA, which may become more attractive than before. Manufacturing facilities could be relocated, and offshoring arrangements within the EU may have to be reviewed if data protection laws change.
In other words, there could be huge strategic changes ahead – and there are people implications at every turn. Organisations will need different skills in new places. Some employees may need retraining, others will move to new geographies and talent will have to be sourced in new markets. And that’s a huge opportunity for HR to prove its worth.
There are huge logistical challenges involved, of course, but much of the devil will be in the detail. Mobility will become extremely complicated – even more so if Brexit eventually leads to greater devolution for nations, regions and cities in the UK. Even relatively small differences in geographical regulations could have much larger commercial consequences. Payroll and people management systems will inevitably become more complex.
In the short-term, too, HR will need to keep a much closer eye on where employees are working at any given time. Exploring new markets and global opportunities takes a lot of globe-trotting – expect your senior executives to make many more short-term business trips. This brings risks for both corporate and individual tax status – if too many employees spend too long in a particular jurisdiction, business activity shifts and a company could easily fall foul of permanent establishment rules.
The answer is high quality data and tracking mechanisms to manage the risks – given the possible consequences, these are well worth investing in now.