UK Businesses Prepare For Brexit Changes
UK Prime Minister Boris Johnson successfully pulled off a Brexit deal after several elections and deadline extensions. Ahead of the Jan. 31 exit date, the pressure is now on businesses, which are still forced to operate under considerable uncertainty. An inconsistent message from Chancellor Sajid Javid has only hindered corporate plans to adequately prepare.
Not A ‘Ruletaker’
In a Feb. 17 interview with the Financial Times, Javid took a hard line on British businesses, which have pushed to maintain common regulatory policies with the EU.
“There will not be alignment, we will not be a ruletaker, we will not be in the single market and we will not be in the customs union—and we will do this by the end of the year,” he said.
Javid was unmistakably clear in his tone and words that British businesses would be affected. The show must go on, however, and neither Johnson nor Javid would entertain further arguments that EU rules should be maintained for the sake of businesses. The next week, Javid seemingly changed his stance. At the World Economic Forum in Davos, his message to business executives was more conciliatory.
Although Brexit is inherently a self-interested undertaking designed to let the UK manage its affairs without the EU weighing it down, Javid said the government would not seek to change rules simply “for the sake of divergence. That would be complete nonsense.”
Changes at Every Turn
Businesses stand to lose the most amid Brexit due to increased costs, changes to rules, possible labor changes, and even differences in applying for intellectual property rights and website domain names.
In a list of potential pitfalls identified by EU Reporter, supply chain regulations is the foremost consideration. Once the EU and the UK formally separate, there will be an 11-month grace period in which time the UK would be required to establish its own customs procedures, tariffs, and trade policies. Even so, businesses that rely on imports and exports must begin planning for a possible increase in production and distribution costs. Unfortunately, the lack of clarity on the exact cost increase will most likely leave costs pushed onto consumers.
Companies may need to reconsider the nationalities of their workforces, too. As with tariffs and customs, these changes are also unpredictable, but companies can prepare by ensuring their employees have the right to work in the UK. Placing a preference on hiring UK nationals will naturally alleviate some of the burden.
A Digital Solution
To mitigate potential crises, companies are increasingly turning to digital firms, which provide constant tracking of the situation. These providers are often industry specific and, according to the Information Services Group, “help [businesses] with their digital transformation journeys.”
While the term suggests a focus on revamping a company’s internet presence—and indeed, that is part of it, particularly in regard to mobile apps—these firms offer a plethora of services beyond the traditional scope of tech firms. An ISG report highlighted artificial intelligence and analytics technologies as a benefit for businesses worried of an uncertain post-Brexit future.
By partnering with digital firms, they receive up-to-date reports tracking both their industry and regulatory changes. These firms, such as Accenture, Atos, HCL, IBM, and Infosys, can introduce a layer of automation in lieu of manual labor, and train employees when necessary to prevent the need for hiring additional help.
Most critically, digital firms provide a buffer for businesses in both time and logistics. Instead of being blindsided by changes that could affect workforce and profits, businesses receive ‘impact assessments’ and can adjust course accordingly.
The Future For Businesses Remains Shrouded In Brexit-Burdened Uncertainty
As the Brexit date approaches, the future for businesses remains shrouded in uncertainty. Chancellor Javid has indicated that the government is intent on taking a Britain-first approach, but only if it makes sense. Businesses will still be required to adjust, even relatively minor details such as relinquishing .eu domain names. Solutions will vary from one company to another, but there is still time for executives to plan ahead and avenues for them to do so.