Impact on Sales
Firstly, regarding the effect on sales, clearly this depends on the geographical spread of the respondents’ main clients. Companies with few European customers expect little direct impact. Others point out that the weakening of the pound makes their products cheaper for their international customers.
One respondent says:
It’s more embarrassing working with European partners because they ask about the political situation and it is difficult to know how to reassure them.
I don’t see a specific risk to our ability to work internationally, but the overall uncertain climate may slow down business decisions amongst our clients.
Many respondents are concerned that sales to the EU itself may well be affected by leaving the single market, if and when that happens of course. Conversely, other clients anticipate "business as usual". One respondent working in the defence sector expects “minimal” impact: their clients being UK based and employees being UK nationals for reasons of security.
Impact on Funding
In addition to sales, impacts were reported on funding. One respondent says:
As a start-up business, we look to the EU both for business growth opportunities and to attract funding from EU grants specifically aimed at helping tech start-ups. Depending on the nature of Brexit, we expect both to become significantly more difficult.
Impact on Recruitment
Of course a focus here is the effect on recruitment and retention. One respondent sums up the broad issues:
In order to recruit the best candidates available, we continue to look at as broad a range of candidates as possible. If Brexit impacts freedom of movement between the EU and UK, we expect it to become harder to attract and retain sufficiently qualified technical staff.
Unsurprisingly, many respondents currently have employees from within the European Union who are key to their business. Some report that a number of their EU national employees have now applied for UK citizenship.
On the other hand, another company believes they may lose current employees, including those British citizens who consider themselves as ‘European’ and who want to continue to work in the EU.
It causes worry for the staff concerned, particularly since we don’t know how sympathetic the Home Office will be to those already working in the UK.
Specifically regarding recruitment, one company says:
We have had candidates from EU nations turn down offers of employment due to negative press coverage of Brexit in their home countries.
Another mentions a likely:
Reduced pool of candidates in an already stretched market.
Another company imagines that over time they will find it harder to recruit, particularly graduates. Not to underestimate the psychological impact either:
It may become less easy to recruit staff – even if visa rules allow qualified people to work in UK, some high quality candidates may be put off because they see the UK as unwelcoming.
Further comments on the situation going into 2017 included:
The majority of our clients are in the US, so there are other factors that are likely to have an impact as well [guess this means you, Donald!]
We expect a secondary effect over a few years will be to increase salaries, in response to inflation due to higher cost of imports.
Unclear yet, but might be changes to house prices (Cambridge is already very expensive, could be a barrier for some candidates). There may be changes to the right to work in the UK for current EU national staff. Extra administration if EU nationals following Brexit require visas, for current employees and future hires.
The exchange rate collapse has increased costs of overseas staff, which we do not expect to be countered by increased overseas sales.
To conclude, the pithiest – and probably most accurate – comment on the implication of Brexit is simply:
Don’t know (who does?)
Martin Constantinides, Director, says: "Implications of the Brexit vote are only now becoming apparent. We felt it was important to address this area in our annual survey. We'll shortly provide an update focused on local salary and benefits levels, and how these relate to recruitment and retention."
Advance copies of the Report have already been sent to participating clients, but it is now available more generally. Please contact us for details.