Assessing the impact that Brexit will have on UK companies
As the Withdrawal Agreement from 31st January has effectively extended trade negotiations between the UK and EU, uncertainty over the impact of Brexit on UK companies remains. While some negative impacts may yet be felt, particularly for some industries, the largest challenge for businesses currently is how to scenario plan, in order to withstand potential disruption.
Industries that may be particularly affected include logistics, those with partnerships and reliance on EU companies and customers, the car industry and manufacturing, the latter currently largely relies on EU trade (approximately 2/3 of all imports and exports).
That said, no industry operates within a vacuum so impact on particular industries will have a trickle effect on the economy and on other business within its supply chain.
That’s not to say all is doom and gloom; those who best anticipate change and succession plan accordingly will fare best with potential upheaval. Some businesses may even see a boon; it’s incorrect to assume all impacts of Brexit will be negative.
Either way it is imperative that UK business remains competitive which, although may seem counter-intuitive, will require continued investment – for example in product, technology and people. Businesses will need to be proactive in forging new territories and opportunities.
Brexit impact on recruitment and interim management
As before, uncertainty over what Brexit means for UK business can begin to change the shape of talent and resource management before those direct impacts are yet known. Uncertainty within a business, because of internal restrictions or external factors such as the market or industry-specific factors, often creates a larger need for interim managers. This means operational budgets can be kept lower, relying less on long-term commitment to permanent employees.
Furthermore, the skillsets of interim managers may be particularly useful when considering Brexit and employment. Areas where there may be increased demand for finance and accounting professionals include:
- Change and transformation management
- Financial management including identifying sources for working capital and cash flow if required
- Business analysis and international tax to support new market penetration
- Financial modelling and pricing to determine costs under new customs duty regulations
- Regulation & tax, including adhering to new EU regulations like IFRS 9, 15, 16 and 17 whilst sitting outside of EU jurisdiction
- Contracts management to ensure that international terms and conditions of service reflect whether you are an international exporter or importer
- Corporate reporting to disclose how the business is addressing risks and opportunities from Brexit, including how the business will handle uncertainties
- Corporate reporting to prepare UK GAAP FRS 102 accounts, reflecting an uncertain Brexit outcome
- Auditing including approaching an audit before Brexit as well as a deal/no deal situation
- Technology, AI and predictive analytics to accelerate digital transformation and offset potential losses in other areas/departments
Uncertainty over job security may mean fewer executives consider or remain within interim management, however, the ongoing skills shortage – particularly within accountancy and finance – will continue to drive opportunity for those in the sector. This could mean increased contract opportunities for interim managers as demand for skilled professionals is set to outweigh supply.
Will this mean more assignments for interim managers?
Given the possibility of reduced headcount budgets and the need for specialist, short-term skillsets it’s likely the need for interim management in the current and foreseeable climate will increase.
How will this affect clients requiring interim management?
Specialist, competent interim managers will be harder to source, as demand increases and with potential contraction of the workforce. Businesses must remain an attractive proposition to secure the best staff. Trusted relationships with interim management providers will become ever more important.
If the effect of Brexit is creating more challenges than opportunities, please get in touch – we represent some of the most highly skilled and experienced interim managers who can help you find certainty out of uncertainty.