Stuart Lisle is a Tax Partner at BDO and co-chairs BDO’s Brexit Taskforce. The article below is his contribution to the Benivo hardcover book “Attracting and Retaining Top Talent In Times Of Brexit”.
Early on in my career I was given a sage piece of business advice: look after your people and they will look after your customers. Look after your customers and they will look after your profitability.
So let’s just assume for the moment that you’ve invested time, money and energy in your people and, as a consequence, have a committed workforce driving your business forward. Now the issue of Brexit has come along and, like a rock thrown into a still pond, has created ripples and disturbance amongst your people. It’s vital to get to grips with the challenge as quickly as possible.
But how do you grasp something that is so fluid? There are lots of challenges but I will use this article to focus on two and how to address them.
Employment and immigration
After Brexit, it’s expected that employees’ ability to transfer between the UK and the other EU member states will be restricted.
The Brexit ‘divorce settlement’ will probably include some special rules for certain groups of workers, but it is quite possible that EU workers will be subject to the same conditions and restrictions as migrant workers from outside the EU.
With that in mind, you should start reviewing contracts and consider what action is needed to ensure that EU talent in the UK, and vice versa, is protected and retained. On top of that, assess the impact of increased visa costs and administration.
You should also look at any employment needs which are specific to your business. If you currently use seasonal workers from the EU, for example, what are the cost implications for your business should free movement of labour cease?
Impact on employee pensions
While immigration and employment are very broad topics, the second issue to plan for is a technical one around employee pensions.
Currently pension schemes are, in the main, the responsibility of the individual EU member state, however the EU has a regulatory framework which covers pensions. We expect much of the existing EU-derived legislation to remain in place, mainly because it was designed to protect members. Existing regulations will continue to apply until changed specifically by the UK Government.
However, cross-border workers will be concerned about how the amalgamation of state pensions from the UK and from other EU countries will work. Employer pension plans may also see changes to the cross-border application process.
Therefore you should be prepared for any future changes, review the pensions you offer and identify any scheme members working in a different EU member state. You should also consider whether you have employees moving between the UK and other EU countries who will be affected by any shift from the current EU pension directive.
The result from the EU referendum has created a lot of uncertainty not just for your business but for your people too. It is vital that you communicate with your employees and reassure them.
Taking a proactive approach to understanding the impact of Brexit on your workforce will enhance the flexibility of your business but also protect your number one asset: your people.
You can register for a free copy of the hardcover book “Attracting and Retaining Top Talent in Times of Brexit” where this article is featured alongside 27 others here: www.benivo.com/brexit-book/stuart-lisle