With fewer than 100 days before the March 29 Brexit deadline, it is still as clear as mud how the United Kingdom will leave the European Union, or if it will even leave at all.
Between proposed deals quickly scuttled, votes of no confidence against UK Prime Minister Theresa May, and talks of another Brexit referendum, it’s hard for anyone to figure out what will happen. Whatever the outcome, experts say UK businesses need to review how their company interacts with the EU (and vice versa) and what the various Brexit outcomes would mean to them.
At least the groups are talking about a trade deal. “There is strong reason to think that a deal could be tweaked to get through parliament in January,” says Mary Macleod, a former Conservative Party MP, now a senior client partner for Korn Ferry’s Board and CEO Services practice and head of the firm’s Government and Public Enterprise practice in London. She sees the current government preparations for leaving the EU without a trade deal as part of the negotiation process, which could help nudge EU negotiators in Brussels.
One area in particular that needs a strategic review: supply chains. Organizations need to develop alternatives if a deal—or lack thereof—disrupts the flow of goods. “There could be a massive logjam in Calais if there is a no deal,” she says, referring to the busy French port across the English Channel. She notes that a lack of a deal could mean more paperwork and higher tariffs or import taxes.
Leaders might think they are immune from trade disruptions because they buy from local companies. That may be an illusion, however, because the firm’s suppliers may rely on overseas sources for materials. “There’s a danger that those that don’t directly trade with the EU don’t do much planning,” says Peter Cave-Gibbs, Korn Ferry’s regional market leader for global technology markets, EMEA. In other words, even UK-focused companies need to prepare because the supply chains are likely somehow intertwined with the EU.
It isn’t just supply chains, either; finding talent could be an issue, too. Exiting the EU could mean that the supply of workers from the continent dries up. “There could be issues with talent supply if immigration tightens up,” says Cave-Gibbs. For that reason, leaders may want to consider how they’ll recruit employees for different Brexit outcomes.
It may be all too easy to blame the need for all this planning on Brexit, but the reality is that corporations must continually plan and analyze their situation. “All good companies should be planning for the future and assessing risk,” says Cave-Gibbs. “That’s best practice for any organization.” That will be true no matter how the Brexit ends.