With less than 100 days to go before the scheduled Brexit date on 29 March 2019, much of the UK’s future relationship with the EU is still unclear.
MPs won’t vote on the deal negotiated by Prime Minister Theresa May until early 2019, after the date for the vote was postponed from 11 December 2018 to the week beginning 14 January 2019.
Meanwhile, increasing attention is being given to preparing in the event of a no-deal scenario, or the possibility of a second referendum.
This makes for a difficult environment for businesses, with SME confidence hitting a seven-year low in December 2018 according to the Federation of Small Businesses (FSB).
Mike Cherry, chairman of the FSB, said political uncertainty has made planning ahead “impossible” for many firms, with 43% expecting their performance to worsen over the next three months.
It’s hard to say with any certainty what the next few years will bring for businesses, but we’ve put together some recent studies and statistics to suggest how Brexit could affect your business and those you employ.
Changes in the labour market
Since the referendum, we’ve already seen some significant changes to the number of EU nationals living and working in the UK.
Data from the Office for National Statistics shows there were 132,000 fewer EU nationals working in the UK between July and September 2018 than the same 2017 – the largest fall since records began in 1997.
Research by the Institute for Fiscal Studies suggests this trend could continue after Brexit, although the decline in EU workers would be balanced slightly by an increase in non-EU workers.
However, this would still mean skilled migration would drop by about 60,000 – equal to about 0.2% of the full-time workforce in the UK.
Impact on recruitment
Problems with recruitment have already been reported by many employers, with high employment rates creating a competitive labour market.
According to the Chartered Institute of Personnel and Development (CIPD), 44% employers have reported that it’s become more difficult to fill vacancies at their organisation in the past 12 months.
If the number of skilled workers in the UK falls as predicted, this could put further pressure on those employers who are already struggling to recruit.
How businesses are preparing
Businesses are faced with the challenge of making plans for several different scenarios, including leaving the EU under the proposed deal, and leaving without a deal in place.
According to the Confederation of British Industry, one business in five has already started putting contingency plans in place for a no-deal Brexit.
Some of these plans include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating operations overseas.
However, smaller businesses are less likely to have started planning, with only 31% of microfirms having completed a Brexit risk assessment, compared to 76% of larger firms.
Businesses can prepare by thinking about how many EU individuals you employ, how much business you conduct in Europe, and how your business model be affected by Brexit.
Other important considerations include the potential impacts on your suppliers and your supply chain, and identifying any vulnerable areas.