You’ve probably heard of Brexit by now, but do you really know what it means? Since the announcement of Britain’s exit from the European Union, the global stock market crashed, and then the next day it recovered. And all of a sudden there was no shortage of articles asking, “How will Brexit impact recruiting?”
Before predicting the Brexit consequences on recruiting and HR, it’s important to understand what the European Union is all about and who’s involved. There are several origin stories of the EU, starting after World War II when European leaders created the European Movement International. Then, in 1957, it grew when Belgium, France, Italy, Luxembourg, the Netherlands and West Germany signed a treaty known as the European Economic Community. In 1973, Ireland and the United Kingdom joined the group and it officially became the European Union. In 1985, Greenland and Denmark left. In the 1980s, Greece, Portugal and Spain joined, and since then others like Romania, Lithuania, and Slovakia have done the same. There are now a total of 28 countries that make up the EU. (source)
The European Union was created to ensure the free movement of people, goods, services, and capital within its internal market. There are a couple of things to consider about the EU. First, it removed borders from the 28 members, allowing the free flow of goods, commerce, and people. Second, there are hundreds of billions of dollars at stake; for instance, U.S. corporations have over $588B in the European market and over 1,000,000 employees in Great Britain alone. And one of the main reasons Britain voted to leave the EU was because of immigration reform; some wanted more control over the borders and others wanted less control with fewer cost constraints.
Whenever unions break up, there will be hurt feelings, broken agreements, and lots of money and jobs at stake. The unfortunate part about Brexit is there are real people trapped in the gap of this possible EU divorce. I use the term “possible” because although Britain has voted to leave the EU as of the time of this article, they have yet to file the official documents to withdraw and there are several ways they could withdraw.
In the meantime, the global economy suffered one of its worst days ever after the announcement of Britain’s vote, but maybe that was premature because companies like West Midlands, the automaker for Jaguar and Range Rover, say that for them, it’s business as usual, and they don’t intend to decommit any of their money to the Brits. They aren’t the only ones, either. HomeServe Membership Insurance Company will continue its business in Britain, and the operations director for the Confederation of British Metalforming has said that this is an opportunity to deal with the UK. Finally, here is an article that profiles eight American companies that could care less about Brexit.
So what does this mean for recruiting? The evidence says, not much. Recruiters who look for and place talent in Europe must understand the EU and all the major countries in the EU, including their commerce laws, trade agreements, unemployment numbers, and economic positions, so they can address any fears a potential candidate may have. However, that is no different than it is now.
Does this mean Brexit won’t affect global HR as well? Not so fast. With HR, it is more than acquiring talent. It’s a matter of maintaining talent, developing business, and getting the most out of what you have. So if Brexit has an effect on labor laws and immigration status, could it also affect who you can hire or promote? Lots of people could lose their jobs. Expatriates could get caught in a net of immigration realignment and, of course, union loyalties (e.g., those that stay with the EU may blacklist countries and businesses that don’t). Brexit could have a negative effect on taxable income, which is already a problem for some expats, thus causing a mass exodus.
This entire process may continue on for two years before it’s finalized, which means companies have time to learn more and figure out the best course of action. In the meantime … keep calm, carry on and do good HR.
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