The countdown to Brexit – Due date: 9 months from now.
At 11pm on Friday 29th March 2019, things are going to be changing for contractors (and everyone else for that matter). That’s right; as much as you may be tired of hearing about it, there’s certainly no avoiding Brexit now. The country’s made its bed, now we’ve all got to hop in together and lie in it.
Whether you’ve been avoiding Brexit talk or not, it’s important to ask what the whole process is going to mean for UK contractors? It’s nine months until the big day… That’s the same amount of time that expectant parents have to prepare for the arrival of a new life. But how prepared are we for the arrival of Brexit?
As with all big changes, we’re bound to experience ups and downs. As Contractors we should be better placed to handle change than most. After all, we make a living out of change!
Here are a few key things to bear in mind in preparation for the arrival of Brexit.
Everyone is uncertain, so why should contractors be any difference? The uncertainty of the economy is bound to be the most immediate cause for concern for UK contractors: the fear of the unknown that lies ahead. On the downside, a lot of businesses may hold off carrying out any large investments and starting any major projects, or they may change their policies on hiring external workers, meaning that there might not be as many contractor positions available. However, on a more positive note, the flexibility of having a temporary pool of resources could appeal to more businesses and the contracting workforce has been called out recently by McKinsey as being one if the five options for the workforce of the future.
From the client/hiring manager point of view
An Accenture paper – Brexit & the UK Workforce – states the following:
Some 1.6 million EU workers are currently employed in the United Kingdom; 88 percent of them would not qualify for a visa under existing rules.
So, that’s about 1.4 million contingent workers. Even if contractors make up just 10% of that figure, there’s 140,000 roles that companies will need to fill from March 2019. Given that most contracting roles take 2-3 months to fill, we expect to see a busy January next year!
But, hiring mangers take note: do you have the contracts in place to deal with agencies who process payroll/timesheet payments in the EU? If you don’t know the answer, check with your procurement team sooner rather than later.
Assess and address any skills gap
Understand where the future skill demands could come from and invest in yourself to be ready to capitalise on the gaps Brexit may create in the UK. We could assume that the 1.6 million contingent workers worked in the hospitality or service industry, but what if there was a sudden demand for business change managers? Could you be ready?
To balance that argument, if we don’t reach an agreement on freedom of movement in the European Economic Area, we may find it’s the British contractors working abroad who will feel the biggest impact of Brexit. There’s a chance that many of them will start returning to the UK and looking for work back home. If this is the case, competition for whatever contracting roles there are in the UK will be even stronger.
Impact on profits
If you do have to travel to Europe for any of your work, you might find yourself paying more for travel and hotels, which will increase your expenses and, unless you negotiate a fully expensed contract, reduce your profits. The rates offered alongside the payment vehicle (direct, agency, umbrella) could also impact the bottom line.
It’s important to get your company finances in order during this volatile period. UK Contractors with assets abroad could benefit by repatriating their earnings and, if the pound strengthens, then the same could be true of Europeans living in the UK. It’s likely banks will capitalise on all of the money changing hands and the high fees and commissions they can charge on unsuspecting clients. It’s up to you to mitigate this risk for your business.
Working in the EU
Up until now, we’ve been free to work anywhere in the EU, but the country voting to leave the European Union may take that freedom away from us. Going forward, it might mean that self-employed freelancers and contractors will need to have a working visa to be able to carry out work anywhere else in the European Union. We can only hope that the government manages to strike up a deal allowing free movement of workers in Europe, similar to Iceland, Liechtenstein and Norway.
Relax! None of the above is meant to scare you; these are all just examples of various scenarios we’ve been mulling over – more are bound to emerge in the next nine months and beyond! The above are all just to highlight what could potentially happen and encourage you to plan ahead and be prepared for all eventualities.
What hurdles have you faced in the lead-up to Brexit? Could you use some advice to help ease your mind about the potential changes that us contractors are going to face? Or perhaps you have some tips or words of wisdom for fellow contractors in your position. Either way, that’s what the Contractors Anonymous community and our chosen partner network are here for; to support each other in this exciting and ever-changing career path that we’ve all chosen.