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Wednesday, 11 May 2016

Brexit uncertainty and recruitment

Brexit

Is the possibility of a Brexit vote on 23rd June making you uneasy about greater risks if you recruit into your business right now?

You aren’t alone. There are signs that uncertainty about whether or not Britain will stay in the EU is dampening down recruitment levels. “City hiring grinds to a halt as Brexit poll looms” screamed a recent Financial Times headline. With opinion polls tight, surveys suggest that companies are delaying making hiring and investment decisions until after the 23rd June vote on Britain’s membership of the EU.

At the same time, you still have a successful business to run. There may be threats just around the corner, but you still need to retain the ability to react quickly to them, and to be geared up to meet increasing demand without running your existing staff into the ground.

What are your alternatives to hiring more permanent staff?

  • Hire a temp through a recruitment agency instead. This person would be the agency’s employee not yours and this can be a flexible, obligation-free way of covering the work without making a long term commitment.
  • Take on a fixed term contract employee for a finite length of time until the impact of the referendum on jobs in your company becomes clearer, to work on a particular project.
  • Find a self-employed freelancer with specialist skills and experience to enhance the know-how in your company over a finite period of time, invoicing you on a day rate basis.

Now would be a good time to think through your just-in-case strategies, especially if your business has a presence in other EU countries. One of the basic principles of the EU is freedom of movement and at the moment there are no real restrictions. Depending on the terms of the Brexit, in the medium term it’s likely to be harder to hire EU workers.

If demand for your company's goods and services is affected by the stock market and overall business confidence in the economy, a Brexit vote is likely to have a negative impact, as the IMF has warned today. Financial modellers in investment companies anticipate a fall in stock market values if Britain leaves the EU, and a small bounce up with a remain vote.

Even if the UK does break away from Europe, the process won’t happen overnight. There would be a two-year period to negotiate the mechanics of the withdrawal, and the exit itself is likely to take even longer. For now, there are so many unknowns that there’s very little planning employers can do to mitigate the risks associated with the referendum and a possible Brexit. But a prudent employer will be cautious about entering into lengthy commercial agreements - in employment or otherwise. Staying agile is key.

Newish to recruitment? - there’s more advice with the practical steps to consider here. And to explore how to make the best recruitment decisions for your business, contact The Human Resource on 07884 475303 or email enquiries@thehr.co.uk