Consultants working on Brexit say companies are not prepared

FTSE 100 companies remain dangerously underprepared for Brexit, with just days before the latest deadline is due to hit for the UK’s withdrawal from the EU. A new survey has found that 77% of consultants and clients specialising in the area believe the UK’s leading companies have not taken appropriate action, amid the continuing uncertainty that clouds the outlook of the UK economy.

With the Brexit process having stalled on multiple occasions, to the extent Parliament is now hoping for a second extension of the process, just days before the EU’s second deadline is due to occur, it is safe to say that nobody knows what the future holds for the UK. The Government are not the only ones who seem dangerously underprepared for the UK’s exit from the EU, however. With such uncertainty continuing to cloud the economic, social and political outlook for the UK, it is all too easy for businesses to be caught in the headlights, trapped in a perpetual wait-and-see mode.

Businesses across Europe and the world have been bombarded with warnings that Brexit could have dire consequences for their bottom-lines, unless they take pre-emptive action. Despite this, more than 40% of respondents to a recent poll have suggested they believe post-Brexit life will be business as usual, while a similar number had yet to take significant action on the matter. That was in November, when there might have still been time for firms to right their course.

Now, however, a new survey from River Partnership has suggested that UK businesses may still be failing to take precautionary measures on Brexit – which is currently slated for April 12th, assuming the EU rejects the UK Parliament’s request for another stay of execution. The research specifically targeted interim management consultants, mainstream consulting leaders and corporates looking to utilise expert but flexible resources. This saw the cross examining of 60 so-called “Brexperts”, each of whom lead a prominent Brexit programme for either a global consulting firm or a leading multinational corporate.

While the Brexit spend of businesses on consulting firms has reportedly reached a hefty £75 million, more than three-quarters of River Partners’ community felt that the top 100 companies of the UK remain unprepared for Brexit, whatever form it takes. Only 23% of respondents felt that these firms were well-prepared for the UK’s divorce from the remaining bloc of 27 countries. With Brexit programmes typically lasting longer than 6 months and the outcome of Brexit both in terms of content and time still unclear, the researchers stated they anticipate continued, growing demand for Brexit change skills and policy expertise.

Time running out

Of the top firms which were prepared, River Partners singled out Bank of America Merrill Lynch and BMW for special praise for their Brexit strategy thus far. Bank of America Merrill Lynch was lauded for having had “a strategy in place from the start”, while undertaking a detailed planning programme and executing timely resourcing to deliver on key milestones. Meanwhile, German firm BMW “began planning well in advance”, and was able to make some important decisions earlier than competitors. With the German automotive sector facing a major reduction of its workforce due to Brexit, such planning is crucial for the firm.

For companies still weighing up their options, River Partnership’s Brexperts recommended that firms take note of two key points. First, with organisations in the market struggling on Brexit readiness, taking decisive steps now will assist in the long-run – and may even help get a leg up on competitors. Second, companies need to act as quickly as possible. Ideally, companies would have acted before the start of April; however, with a brief extension of the Brexit process, there is still some time left. Failing to act is a risk; the later firms leave it, the more demand for advisory work and other external services will likely exceed supply.

Commenting on the findings, David Young, Director at River Partnership, concluded, “Many Brexperts felt that recent developments in Parliament have created such a mess that more time is likely to be given so that the UK can find a way towards a more respectable solution. Whether they seek a Norway plus model or go back to the drawing board for a Canadian style deal is highly debatable... Any plausible way forward will take time to materialise and, with the added complication of the European Parliament elections starting on the 23rd May, extending Article 50 will not be a simple task.”