The cost of Brexit to your business

January 23, 2019

Brexit negotiations are still ongoing, leaving UK business owners uncertain of the true impact Brexit will have on their organisations.

But though the long-term effects may be difficult to predict, it is still possible to prepare for the immediate costs. Particularly those imposed by planned trade barriers between the UK and EU27 (the 27 European Union countries involved in Brexit negotiations with the UK).

Future workforce trends

3/5 of organisations believe it will be more difficult to recruit senior and skilled employees after Brexit

The Resourcing and Talent Planning 2017 survey suggests that concerns about recruitment will see a greater focus on employee retention and development in coming years. In response, employers may need to start upskilling existing employees for hard-to-recruit positions.¹

Improving employee retention

With new recruits for skilled and senior roles expected to decline, employers are looking to improve their staff development and retention, training their senior staff from the ground up. As a business owner, there are a number of proactive ways you can invest in your staff:

Sponsoring employees in achieving relevant professional qualifications
Investing in apprenticeship schemes
Investing in Employee Benefits schemes (such as employee healthcare, financial education and pension schemes)
Working to improve staff relations through internal communications

Increasing employee benefits and learning opportunities within your company will not only help with employee retention but may also help fill senior and skilled job roles in the future.

Overseas Employees

Illegal workers cost UK employers £10.5m in penalties between 1 January and 31 March 2017

With skills shortages across most sectors, the last few years have seen UK businesses taking on an increasing number of foreign applicants. The good news is that in an immediate post-Brexit world your right to employ foreign workers should not change.

In June 2018, it was confirmed that EU nationals who have lived and worked in the UK for five years or more, will be able to apply for the same rights as UK citizens.³ Beyond that, the future and long-term impact of Brexit on overseas employment is unconfirmed. However, initial proposals suggest that free movement of labour will end in March 2019. From then, skilled migrants will need to apply for work permits for a period up to 2-years for low-skilled employment, or 5-years for more high-skilled occupations.²

Hiring overseas employees

As an employer, you could face criminal charges and potential imprisonment on conviction for hiring illegally from overseas2

While the long-term impacts of Brexit on overseas employment won’t become clear until the terms of the UK’s exit from the EU become clear,² there remain a number of risks that employers should be aware of.

Hiring illegally, whether you are knowledgeable of your offence or not, could cost you greatly. These are just a few things to be wary of when hiring foreign workers:

Right to Work checks

Failing to carry out Right to Work checks could lead to significant fines for each person you employ who is not permitted to work in the UK⁴. It is important to carry out thorough checks on overseas employees to ensure that they are legally permitted to work in the UK.

Continued checks

If an employee’s Right to Work status changes during their employment with you, you remain liable for illegal employment.⁵ It is vital to carry out periodic checks on all your staff to ensure that their documents are still valid.

Employment rights

Foreign workers are entitled to the same rights as your UK employees. Rights such as National Minimum Wage, annual leave and sickness pay. However, some overseas employees may be restricted in other ways, such as in the number of hours they are allowed to work. These restrictions should be determined on employment to avoid liability claims.

Insurance risks

Claims of pay discrimination cost the UK £127bn a year

If one thing is certain, it is the need for employers to be extra-vigilant when it comes to hiring overseas employees, or indeed carrying out checks on your current workers who once lived outside the UK. However, this brings its own set of risks which could land you and your business in costly legal disputes.

Protecting against discrimination

With new policies being put into place regarding an individual’s right to live and work in the UK, it is important to be wary of possible or perceived acts of discrimination. If you are seen to be making assumptions about an individual’s immigration status based on race, nationality, ethnicity or accent, you could open yourself up to expensive discrimination claims.

To save from possible claims of discrimination, you should consider carrying out a blanket check on all your employees, and review how Brexit impacts upon Employment Law.

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