The UK’s decision to leave the EU has ushered in a period of political and economic uncertainty. There is no precedent for what to expect over the coming months or years, and although the UK is only just starting to take it’s first steps on this journey, as an international recruitment business, we were keen to understand more about the impact that individuals and businesses are seeing so far.
We asked 1,000 senior business leaders eight questions about the impact of the UK’s decision to leave the EU, 500 in the UK and 500 in European countries.
The questions we asked were about:
- Their role function
- Their industry
- The impact they’d seen so far
- Likelihood of continuing certain business initiatives
- How they expect their interim hiring to be affected
- How they expect their permanent hiring to be affected
- The biggest opportunity for their business function
- The biggest risk for their business function
The data below relates just to the UK responses that we gathered, in a later post we will be comparing this with the European data we have also collected.
Key insights are:
- 58% of individuals have seen no change to their business following the UK's decision to leave the EU.
- 8% have seen a positive impact on their business so far.
- 35% have seen a negative impact on their business so far.
- The industries who have seen the biggest positive impact or the least disruption so far are the Media / Marketing / Entertainment and the Charity / Not for Profit industries.
- The industries who have seen the biggest negative impact so far are Financial Services / Banking, Business Support Services and the IT / Telecoms / Technology industries.
- Interim or temporary hiring is most likely to increase
- Permanent hiring is most at risk of decreasing
1. What has the impact of the UK’s decision to leave the EU been on businesses so far?
58% of the people we asked said that there was no change at all to their business as a result of the UK leaving the EU, while 35% said there had been a negative impact and 8% said there was a positive impact.
The majority of respondents said they hadn’t seen a change so far, which, given the immediate volatility in the markets and negative predictions that dominated the media as a result of Britain’s decision could be seen as a positive. It's too early to tell what the medium to long term affects are of this decision so it will take time for businesses to truly assess and understand what the differences will be for them moving forwards.
Respondents who said that there was either no change or a positive change are expecting their business to prioritise starting new projects, hiring, and investment in both their role function and across their business rather than cost cutting. Whether businesses continue to focus on these positive initiatives will be a good indicator moving forwards of confidence in the UK as it prepares to exit the EU.
Fig 2: Answer to question 4 adjusted to show individuals who have seen no impact/positive impact as a result of leaving the EU.
Some of the opportunities listed by this group as a result of the UK’s decision to leave the EU include:
- Better access to markets outside the EU such as China
- Increased consumer spending on UK products
- Opportunities to create more efficient processes as a result of forced change initiatives
- Benefits of a lower £ sterling when exporting products and services and investing abroad
- Less regulation
Of the 148 people who said they have seen a negative impact so far on their business, the majority of these are expecting a bigger focus on cost cutting measures, with hiring and attracting fresh investment the activities that are the most likely to be frozen or stopped altogether.
Fig 3: Answer to question 4 adjusted to show individuals who have seen a negative impact as a result of leaving the EU.
Some of the risks to mitigate against listed by this group as a result of the UK’s decision to leave the EU include:
- Withdrawal of EU funding
- Negativity towards UK businesses from EU businesses
- Potential lack of access to the single market
- Uncertainty around the future of EU staff currently employed in the UK
- Increased costs of doing business
The highest percentage of industries that have seen either a positive impact so far or no change to their business are the Charity/Not for Profit industry and the Media / Marketing / Entertainment industry. The industries that have seen a high negative impact so far are Financial Services / Banking, Business Support Services and IT / Telecoms / Technology.
Percent of respondents by industry that have seen a positive/no impact vs a negative impact. Note: some respondents skipped this question.
2. How Is Hiring Going To Be Affected?
We asked our respondents how they expected their hiring to be affected as a result of the UK’s decision to leave the EU. Appetite for fresh recruitment among businesses is a good leading indicator of a businesses confidence in the short term economic environment.
Permanent recruitment looks the most at risk to slowing over the next 3 to 6 months with 33% of respondents saying that they expect their recruitment for full time positions to decrease over the next 3 to 6 months. The IT / Telecoms / Technology industry and the Industrial / Manufacturing in particular look set to reduce their permanent recruitment the most.
Around 16% of respondents expect their permanent hiring to increase over the next 3-6 months, with the Media / Marketing / Entertainment industries and Transport / Logistics industries expecting the biggest increases.
Interim or temporary recruitment looks to be the favoured choice for businesses over the next 3 to 6 months as they hire individuals with specialised skill sets to help them navigate the implications of Brexit or gap fill with a temporary resource to reduce the risk of taking on a full time employee.
Respondents in the Transport/Logistics are expecting to hire more interim resources over the next 3 to 6 months which should be expected given the significant changes that will need to be worked through as a result of the UK leaving the EU. The Industrial/Manufacturing industries and Health/Medical/Research industries also expect to increase their interim hiring in the short term.
Our data shows that on the whole, the immediate impact of Brexit is not as shocking as some media outlets would have you believe. Just over a third of respondents say they have seen a negative impact within their business but most have not seen any change yet and are planning on continuing with initiatives that lead to business growth.
We are planning to run this survey again in a month or so to see how individual's reactions evolve over time as we learn more about what Britain's decision to leave the EU really means for UK businesses. Until then, tell us in the comments if you have seen any significant positive or negative changes to your business so far.
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If you are thinking of bringing in additional resources to help navigate the changing business environment as a result of Brexit, then download our free talent hiring checklist and make sure you've covered all the bases before you go to market.
About The Data
Breakdown Of Responses By Role Function
The majority of our data came from Board/Exec Management positions, with other role functions represented by a smaller number of responses.
Of these role functions, Supply Chain, Operations and Engineering/Technical had the most optimism that there would be continued positive/growth initiatives, while HR and Sales were the most pessimistic about future growth initiatives within their role function.
Breakdown Of Responses By Industry
Responses were split fairly evenly across industries, with Professional Services, Industrial Manufacturing and IT/Telecoms/Technology being the most well represented industries.