The departure of the United Kingdom from the European Union will have profound implications for not only the UK and the rest of Europe – but also all companies trading around the world. Multinational companies will need to rethink their global strategies and ask whether the UK is a place to locate a head office or any major operations. Furthermore, companies in the UK that are not yet transnational will have to begin to think more globally and set up operations abroad if they want to maintain their trading position.
The biggest short-term threat to UK operations will be the poaching of key staff to work for rival companies abroad, especially in the USA and Asia. There are, for instance, over 20,000 Chinese companies on the verge of going global and the easiest path to becoming multinational will be obtaining top talent from western companies and then – when rivals are weakened by the losses of top talent – they can be snapped up through acquisition at a drop down price. The UK will therefore be a predatory hunting ground for ambitious new companies on the world stage that have established brand names in their sights. It will now be far easier to prize staff away from positions in the UK because the country is suddenly marginalized and suffering all the uncertainties about EU departure terms.
High on the “to do” list for HR based in the UK should be issues such as post-compete clauses, expat opportunities and building up staff strength beyond British shores. Incentive schemes that reward loyalty and make departure more costly for senior and high potential people should also be developed, as well as further family-friendly policies – as people with family commitments are far less vulnerable to rival job offers that involve them working abroad. Of course, such policies can be a double-edged sword, so decisions about moving valued individuals need to be made earlier in their careers, before they are weighed down by too many personal commitments.
The Federation started to prepare for Brexit as early as 2011 and has now moved much of its capability to Cyprus. We also plan to extend our operations to India, China and the USA in coming years. If member or nonmember companies wish to take a similar course, we are in a good position to give them the assistance that they will require.