Not only must businesses grapple with the coronavirus pandemic but many will soon have to once again wrestle with the UK’s decision to leave the EU, with difficult decisions having to be made over the sourcing of talent, write Gillian McKearney and Pip Hague.
In the midst of Covid-19 and business continuity planning, it’s important that employers and particularly HR teams do not lose sight of the other pressing issue – Brexit and in particular the impact this will have on the workforce.
With fears of further waves of Covid-19, especially as winter draws near, many businesses are struggling to focus on anything else. But, with only four months to go until the UK departs from the EU, how many employers have dropped the ball?
Research released by the CBI has revealed that one in five businesses are less prepared for Brexit now than at the start of the year due to Covid-19. Half of businesses are no more prepared for our departure than they were at the start of the year. Lastly and perhaps causing the most cause for concern, 21% of respondents said that their Brexit preparations had actually derailed since the start of the year.
There are winners and losers when it comes to the impact of Brexit on businesses who need non-native workers. For those who are already sponsor license holders, there will be certain advantages when the UK’s new points-based immigration system kicks in: a lower minimum salary level, increase in roles available to sponsor and no advertisement requirement. Industries dependent on a consistent influx of EU workers, such as hospitality, retail, manufacturing and construction etc are likely to be the most impacted.
The UK’s departure could raise a lot of questions and doubts over the stability of their workforce. Now while Brexit is a multifaceted complex issue and although we officially Brexited on 31 January 2020, the UK still has no clarity on whether we will exit with or without a deal. The transition period is due to end on 31 December 2020. On the 1 January 2021, the UK’s “Australian-style“ points-based immigration system will kick in, marking the most significant developments in UK immigration law in 40 years. This is important as there are certain things that employers who rely on EU workers can and should get in place before this cut-off date.
With not long to go, let’s look at the key actions HR can do now to make the transition easier.
EU settlement scheme – sooner rather than later
The quickest way for employers to safeguard the future of their workforce and keep their trained workers is to direct their EU staff about the EU settlement scheme, the scheme introduced to allow EU, EEA and Swiss citizens to continue living and working in the UK after the cut off period of 30 June 2021. It’s the responsibility of the individual to make their application to the scheme, which means employers cannot require them to apply and cannot check that they apply. This makes the jobs of HR teams harder, but they should continue to put a robust process in place to oversee who is and isn’t applying and to analyse what roles and which areas of the business are likely to suffer.
The latest stats released from the government showed that at the end of June 2020, there were over 3.7 million applications to the scheme. While this is a positive figure and shows than many of our EU workers are likely to stay post-Brexit, the number of refused applications is increasing. Employees and employers have common goals here, which is to remain in the UK and keep working. Be risk averse and apply sooner rather than later.
All in a day’s work
Our clients are often surprised to hear about the various opportunities available regarding workplace planning. Now is the time to be alive to and take advantage of the cut off date. The key cut-off date is triggered at 11:59pm on 31 December 2020. Provided an EU citizen enters into the UK by the 31 December 2020, they’re permitted to stay and work and have up to 30 June 2021 to apply to the scheme. This period is a blessing in disguise for some businesses. It’s the time to plan recruitment drives and resource work contracts. 1 January to 30 June 2021 is a grant of extra time to allow eligible EU nationals to apply to the scheme.
Businesses need to be particularly cautious about checking the Right to Work documents for those EU nationals recruited during this period. If they arrived after 1 January 2021, they will be subject to the new immigration system and require a visa to work.
Becoming a sponsor
We recognise that while the EU settlement scheme will be of great use to many, there will eventually come a time when worker shortages will be an issue again. Therefore, employers may wish to consider whether they should apply for a sponsor licence because recruiting in and outside of the EU will be the same, with some advantages as mentioned above.
There are different types of sponsor licences, requirements and responsibilities for employers. If there is uncertainty around whether a licence is best, employers need to ask themselves the following questions:
- What percentage of your workforce are EU nationals?
- What are your future recruitment needs?
- Do you anticipate that with a drop in EU nationals moving to the UK? What has been in the impact on your business, since Brexit was announced, have you seen a pattern in dipping levels of EU workers?
Once an employer decides whether a sponsor license would be of value to the business, it’s best to apply for a licence sooner rather than later to ensure it’s available to use at the end of the year, minimise delays or disruption to workforce planning.
The changes to the UK’s immigration system will herald a new era for the UK and while no business can entirely be prepared for what will happen at the end of the transition period, it’s important that employers do as much forward planning as possible.
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