Opportunity in chaos: How businesses can prepare for Brexit Britain

Alan Laing talks about Yellowhammer implications on tech companies and how businesses could prepare for Brexit Britain

The recent publication of the government’s Yellowhammer papers would have struck fear into business leaders just a year ago.

Today, though, with continuous political in-fighting, the Supreme Court ruling Johnson’s prorogation of parliament unlawful, and the chance of a general election hovering tentatively on the horizon, UK businesses have grown accustomed to worst-case scenarios, uncertainty, and a volatile economic environment.

We’ve heard about the impacts on sectors like manufacturing (including a decline in productivity), automotive (including halting of production), and healthcare (including ‘disastrous consequences for patients and public health services’). By the government’s own admission, it will be difficult to calculate the full impact on supply chains for critical areas like food, medicine and agriculture. However, and unfortunately, no market is immune to the impacts of Brexit and the uncertainty which characterises these possible futures.

It’ll therefore also be difficult to calculate the impact on the import/export of non-physical assets, such as data.

As stated in the Yellowhammer document: “The EU will not have made a data decision with regard to the UK before exit. This will disrupt the flow of personal data from the EU where an alternative legal basis for transfer is not in place. In no-deal, an adequacy assessment could take years.”

Think this just affects tech companies? Think again.

Almost all UK businesses are reliant on software and cloud-based services, and with HMRC’s ambition to become one of the most digitally advanced tax administrations in the world, technology and data management are now the only way for organisations to conduct business. The good news (yes – there is a sizeable nugget of good news buried amongst Brexit doom and gloom!) is that technology is also our saving grace.

Squeezing opportunity from uncertainty

When even our own government admits that we don’t know what Brexit will bring, we know we’re in a far-from-favourable position. However, there is a way for UK businesses to squeeze opportunity from uncertainty, provided they ramp up Brexit planning and ensure they have contingency plans in place. This doesn’t require predicting a single outcome and overhauling your business operations and structure in response. Instead, it means modelling various possible scenarios and ensuring that your organisation has the agility to adapt quickly to the scenarios that may play out.

Furthermore, this will enable greater flexibility in regards to changing market situations both locally and globally. Brexit isn’t the only thing governing the business world, and business leaders need to ensure they can be flexible to respond to other geopolitical or geo-economic events that may arise.

Taking a proactive approach to asset and business management and preparing for all eventualities means taking a data-driven approach to forecasting. Leveraging data from every process and area of an organisation (its people, suppliers, customers, assets, supply chains etc.) and consolidating this in a single, centralised platform will allow business leaders to plan for different scenarios. The impacts of sudden changes to filing tax returns, for example, or the sudden difficulty in importing key technologies for your company, can be modelled digitally and plans made to mitigate any problems in reality.

Finally, Brexit uncertainty and the need to ramp up planning has resulted in the need for greater focus on another important aspect of a business – and the most important asset of most businesses – people.

Filling the skills gap

There remains confusion about the freedom of movement of EU and UK citizens and their right to work in other jurisdictions. Work permits and visas may be required for EU citizens working in the UK, which will necessitate not only checking and onboarding procedures by business owners but also a means of tracking visa expiration dates. Rules relating to required permits, competency records, and qualifications from different EU Member States will also need to be planned for and (if implemented), adhered to.

Then there’s the widening of the digital skills gap to consider. Back in June, government research highlighted the extent of the problem and concluded that about one-third of vacancies that UK businesses find difficult to fill are attributable to a lack of appropriate digital skills amongst applicants. The effect? We’re facing a digital skill shortage that ‘holds back the UK economy.’ And the effect of Brexit? According to a government white paper, a reduction in net EU migration of between 200,000 and 400,000 over the first five years following Brexit will come at a cost to GDP of between £2 billion and £4 billion. In a statement, industry body techUK asserts that the net impact of these proposals will make ‘the recruitment and retention of the staff needed to build and grow a tech business in the UK more challenging.’

Numerous digital training and skills programmes in the UK are currently funded by the EU – funding which may disappear and may not be replaced. If investment in the tech sector falls, and studying and working in these industries is problematised, the UK will not present an attractive proposition for EU talent needed to plug the gap.

The tech solution to the Brexit problem

Preparing for Brexit in this regard doesn’t have to mean halting investment in vital EU talent. Business leaders should continue to hire EU and non-EU workers, but ensure that they have the technology in place to log and view in real-time detailed employee data on originating location and jurisdictions, should additional visas or work permits be required.

This kind of tech will also support those businesses faced with EU workers departing (and the potential dilemma of hiring and re-skilling workforces), by capturing information from skilled workers as they carry out daily work orders and execute key processes. As new recruits enter the workplace, the technology can make this historic activity and knowledge instantly accessible, and provide a platform to refer to and learn from.

In a climate characterised by a lack of knowledge around Brexit, and with no clear direction from the government, adding value and unlocking opportunities appears a hard ask. And yet – by taking a technology- and data-driven approach to planning, businesses can prepare for every eventuality and ensure they get the most out of their tech, and their talent.

Alan Laing

Managing Director

UK & Ireland

IFS