Brexit: Week Two

It was fairly anticlimactic, the United Kingdom’s big departure from the European Union last week. But corporate leaders are discovering they have two issues to jump on—including one surprise.

An immediate issue for leaders is to figure out how to fill a potentially significant shortage of skilled workers. Before last week, most EU residents had an automatic right to work in England, Scotland, and Northern Ireland. For instance, if an office in Manchester needed a computer programmer, it could hire someone from Barcelona without much paperwork or cost. Now, companies will need to lobby for work visas if they want to hire someone from overseas.

The talent issue wasn’t unanticipated, of course. “Businesses have known Brexit was coming,” says Mary Macleod, a Korn Ferry senior client partner and a former member of Parliament. The current UK government, led by Prime Minister Boris Johnson, is fully aware of Britain’s need for more skilled workers, she says. Indeed, one of Johnson’s talking points during the election was his desire to get more skilled workers coming into the UK rather than the unskilled.

However, government officials sometimes aren’t fully aware which particular skills businesses need, or in what quantities. Business leaders need to make their specific needs heard with their elected ministers, says Macleod. “They need to do that early and continually,” she says.

The alternative, of course, is finding talent, both low- and high-skilled, within the UK’s boundaries. That could be a big task for some industries. Nearly a quarter of the people who work in the UK food and beverage industry are from the European continent, according to the International Monetary Fund, and industries as disparate as finance, transport, healthcare, and tech all source 5% or more of their workforces from the EU.

And while the talent issue might be something most leaders can account for, experts say leaders must tap into something bigger: relearning risk. Britain’s restored autonomy will mean changes in the way that large corporations get managed in Europe. In turn, that will require British executives to polish up their risk-taking and negotiating skills, says Kirsta Anderson, leader of Korn Ferry’s global Culture Transformation practice.

While Britain was in the EU, UK business operations often were included under the umbrella of Europe by multinational corporations. In turn, that meant many big decisions were made at a regional level, not at the country level. “The UK lost its negotiation abilities because in some ways the EU took it over,” Anderson says.

Now, UK subsidiaries will need to make decisions separate from the regional ones, Anderson explains. Laws and regulations in the UK most likely will diverge from those in the EU. Getting executives to make those decisions without clear direction may be harder than it would seem. Contrary to popular belief, the freedom associated with autonomy isn’t usually embraced by many executives—in fact, quite the opposite. “Most companies find that people have a fear of making decisions and don’t want to take risks,” she says.

What will be required is some thorough retraining through the executive ranks, Anderson says. That “reboot camp” will include helping boost the conviction that leaders have in their ideas and their willingness to act upon that. “It means replenishing the skills, the confidence, and risk appetite of leaders,” she says.