Brexit gets real: how can you mitigate the effects of the B-word on your talent plan?

24th September 2019
By Reecho

Last week marked our first near-dropout by a candidate over Brexit.

It’s almost surprising that it’s taken this long to experience the more pronounced effects of the political (non?)event that has dominated our collective consciousness for over three years, but this doesn’t make it any less worrying. What with talk of “soft” and “hard” Brexit, consistently pushed back deadlines, confusion over borders and changes in leadership, the whole thing has become near farcical. Such uncertainty is bad for economic markets, and functioning economic markets rely on talented individuals.

The consequences of this uncertainty are manifold but importantly for the purposes of this article include difficulty planning for future workforces, particularly given the questions over citizenship and working rights that Brexit has posed. Indeed, it was not Brexit in and of itself that was off-putting to our candidate (although it wasn’t exactly attractive) but concern about relocating their family to a state where their citizenship and right to work were in limbo. This is what makes it so hard to prepare for — unlike medicine, you can’t stockpile talent.

This article thus examines, in the most politically neutral manner possible, solutions to consider when Brexit threatens your hiring plans and existing talent structure. While our team is blessed with some legal insight, do note that the below are suggestions which require further legal oversight to be actioned upon.

Deal or no deal?

If you‘re a gambling man, the odds as of 9/9/19 of a no deal Brexit stand at 3/1

The below depends on whether and what type of deal is reached between the UK and the European Union (EU). Given the constantly-changing narrative here, it’s hard to know what the situation will be — hence why it’s worth formulating contingency plans.

Prep with pre-settlement?

Most EU migrants are aware of the “pre-settled status” scheme, which stipulates that in the event of a no-deal Brexit, an individual (and any constituents) who arrived in the UK before the 31st of October 2019 (or whichever date is chosen) is able to apply for “pre-settled” status under the EU settlement scheme. “Pre-settled” status can lead on to full “settled” status later on — i.e. remaining indefinitely.

Those EU citizens who have been in the UK for more than five years should be able to obtain fully settled status — although controversially, not all applications are successful and many have experienced delays. Official information can be found here.

As we well know, the availability of information doesn’t ensure that it is being acted upon. Be sure to check with your existing workforce that they have actioned the above, and keep it in mind when hiring new talent. If they are unable to commence work prior to this date (notice periods may prevent this), the situation will be substantially complicated and you may need to consider the suggestions below.

Alternative employment arrangements

We talked about the widespread reluctance of employers to hire remote workers and contractors in our step-by-step guide to hiring tech talent— and why this stance alienates them from exceptional talent. The UK political situation is unfortunately such that going forward, remote work may be less of a preference and more of a necessity. In the case of the candidate mentioned in our opening paragraph, remote work / contracting was not their first choice but a necessary compromise given the circumstances.

Employing workers overseas is distinct from the practice of employing local workers, but there is a shared distinction between employees, workers and self-employed contractors. While employment laws are fairly harmonised across the EU, there remains different employment legislation for different states.

Companies must thus consider their options when it comes to employing remote workers. They may consider:

  1. Setting up a company entity in the state the individual is based in for employment purposes — if you don’t have one already (we assume that few startups do). This might be the best solution if in the long-term you plan to hire more people in this state, or even eventually set up a “satellite office”. The satellite office can be a good option to consider if you wish to establish a cohesive team structure as opposed to a collection of dispersed individuals working remotely (not that this is necessarily a bad thing), although it increases overheads. Europe is replete with booming pockets of tech talent — Lisbon and Berlin, for example, are popular with London-based tech businesses looking abroad.
  2. Enlisting Payroll Providers to outsource the administrative and compliance duties associated with paying employees. This is popular with companies looking to expand overseas quickly without threatening compliance, in constantly-changing regulatory environments made more complicated by language and cultural barriers. Look to your network for recommendations on payroll providers — including recruitment consultancies such as ourselves, who predictably have experience in this realm.
  3. Hiring on a consultancy basis. Self-employed contractors hold a different legal status to full-time employees, which can be both an advantage and a disadvantage. Consulting contractors are more footloose thus theoretically less reliable, but on the flipside this enables more flexibility when it comes to workforce planning. The best way to prevent poor conduct on either side is to work with a lawyer to ensure that everything is in writing before commencing your business relationship. To avoid administrative headaches, it may make sense to hire a contractor through a managed service company rather than directly.

Do you sponsor visas?

There’s a whole world of talent out there. Unfortunately, most smaller businesses (read: startups) are unable to hire anything but broadly local talent, for the simple reason that they do not have a licence to sponsor visas. As it currently stands, workers of all skill levels with EU citizenship can be admitted to the UK to work visa-free — post-Brexit, they will not necessarily have this privileged access. Should there be a no-deal Brexit, tech talent of EU origin will most probably require visa sponsorship to work in the UK. There is thus no better time to secure the ability of your company to sponsor visas.

Assuming that, post-Brexit, EU talent will need to navigate the same visa system as those from elsewhere, our experience with the current system tells us that the tech skill shortage is such that obtaining visas is more straightforward than for other professionals. The most likely route for the technically skilled would be to apply for the Tier 1 Exceptional Talent Visa(which also covers family / dependants) — these are covered by Tech Nation, a Home Office Designated Competent Body authorised to assess endorsement applications from individuals with tech expertise. Alternatively, the Tier 2 Visa for generally skilled workers is an option we have worked with for those considered underqualified for the Exceptional Talent Visa.

It is worth considering government plans to overhaul the visa system post-Brexit to increase the ease of obtaining the right to work for tech talent. A recent whitepaper suggests such policies as ‘in-country’ switching from visitor status to visa sponsored employment (i.e. you could arrive as a ‘visitor’ and then simply stay with the requisite sponsorship acquired), lowering of the level of skill required for sponsorship, and abolishing the current ‘residential labour market test’ (the infamous practice whereby employers have to first post a job ad to test the availability of talent already in the UK).

All of these changes could increase ease of obtaining a visa for technically skilled EU workers in the event that visas become necessary for them — but don’t hold your breath —if recent history has taught us anything, it’s that such changes to legislation will take time.

Planning for the unplannable

Ultimately, we cannot at this point know what the Brexit outcome will be, but neither can we ignore the very real impact that this uncertainty is having.

Regardless of the Brexit outcome, one thing we have gathered from our constant efforts to outwit the market is that the willingness and ability to be flexible with working arrangements puts companies at a clear competitive advantage. There are more benefits to sponsoring visas, considering contractors, and being open to remote work than as mere Brexit planning strategies. It won’t hurt to consider alternative arrangements and methods for mitigating the threat (and perhaps eventual opportunity) that Brexit poses.