The majority of UK-based companies find themselves in a ‘wait and see’ mode before they take any concrete action to prepare their organisation for Brexit, according to a study by Willis Towers Watson.
The research by the consulting firm of approximately 200 UK businesses studied employers’ thinking about the implications of the Brexit vote whilst looking at what organisations are planning to do to prepare their business and employees.
The report found that two-thirds (66%) of employers believe their business in the UK will be significantly affected by Britain’s vote to leave the European Union (EU). The sentiment is in line with similar studies releases by analysts over the past weeks. A survey from Grant Thornton among UK businesses found that business confidence following the decision is subdued, with 49% saying that they are less confident about the year ahead, while another analysis, by FTI Consulting, found that also institutional investors are increasingly concerned about Brexit’s impact.
According to Willis Towers Watson’s survey, almost four-fifths (78%) of companies have begun a broad consideration of the implications of Brexit and more than half (60%) have conducted an assessment of what it means for key areas. The plans however remain at a high level – so far only 24% have carried out a detailed impact assessment and only a third (33%) have done any scenario planning. When considering sectors the most scenario planning was seen in financial services (carried out by 45% of companies) and the least in technology, media and telecoms (20%).
Richard Veal, Director at Willis Towers Watson, says that the results show that UK business is concerned about the effects of Brexit, but adds that uncertainty appears to be hindering many companies taking immediate action. “It is important that companies think about what the next steps should be and get into a more action-oriented state of mind”, he comments.
The report goes on to show that UK businesses’ biggest concern is the impact of Brexit on the workforce, cited by 76% of those questioned, on organisational change, cited by 51%, on total rewards, cited by 49%, and on while engagement and communication, also mentioned by 49%. Veal continues: “Minimising the impact on the workforce seems the obvious area of attention and it should be the area of immediate concern. The ability of a business to understand the number of workers affected and how it impacts the business will be crucial to any organisation going forward.”
Organisational change is another topic high on the agenda of the respondents. Half of companies (50%) are thinking of reassessing their current operating model and organisational structure, while just under half (47%) are looking at the HR implications of business disruptions or delays to corporate transactions. There is a slightly stronger trend for organisations in financial services and professional & business services, where 59% and 67% respectively are assessing implications for organisational change.
Two forward looking reports from PwC and PA Consulting Group recently released found that London may lose its top spot in Europe’s financial services industry as a result of Brexit, while leaving the EU is set to cast a shadow of uncertainty on Britain’s automotive market, with in particular OEM's and car factories expected to face a hard hit.