While this is a completely new experience for the UK, we have proven to be a resilient and adaptable country in times of need. We can look at our past experiences in difficult markets to draw out some considerations and move forward with a positive outlook on how these will play out.
I believe there are several key areas where Brexit could benefit the IC market and the clients that engage contract talent.
Economic Uncertainty = Increased Demand for Contractors
As with any decision impacting a global superpower such as the UK, stock markets have fluctuated significantly in the wake of the Brexit decision. While the FTSE100 has clawed back after losses earlier in the week, the world markets still suffer from their biggest two-day falls in history. With so much uncertainty it is likely that volatility will continue for some time.
Historically, major events and stock volatility of this scope means that many organizations will slow or stall major initiatives and hiring of full-time employees. This may last weeks, months or, in the case of the US after the stock market crash of 2008, years.
But this isn’t necessarily bad news all around. Economic uncertainty often marks a boom time for contractors and businesses with a focus on direct sourcing, as organizations look to source temporary and short-term talent and to avoid the middleman expense of staffing firms.
Compliance & Expertise Will Become Critical Issues
It is likely that much uncertainty is to come during what will be a long process of “divorce” and “re-engagement” between the UK and EU. However, certain businesses, particularly those with expertise in the compliance and legal space, will be well poised to serve as subject matter experts to help clients navigate the legal complexities of the changing system.
Those businesses, like our own MBO Partners UK, that plan ahead will be served well by acting as shepherds for clients to make sure they are properly engaging their independent workforce populations, as well as complying with new and changing laws regarding multinational contracts and engagements.
For independent contractors themselves, this could potentially increase demand as well. The need to attract and retain skilled talent is just as important in difficult times as in good. Sectors such as business transformation, legal, IT, tax and operations are all likely to see a demand to help navigate companies through this period of change.
Change Is a Slow Process: Plenty of Time To Adapt
From my experience, the individuals and the industry at large are behaving more pragmatically than is being advertised in the media.
There’s a long way to run on this, with timeframes of two to four years being mentioned before any real change will be felt on the ground, and months before Article 50 is invoked when Cameron’s replacement gets up and running. In short: don’t panic over speculation; take this as a planning period.
However, strategically engaging an experienced firm such as our own to take down the administrative burden of compliantly engaging independent talent through what will prove to be fast-changing times can be a smart financial decision in the long run, with an up-front cost for a long-term payoff and elimination of headaches from learning curves down the road.
Potential To Revise Unpopular Laws with Contractor-Friendly Policies
Uncertainty is never pleasant. But to take a glass half full approach, the UK’s move to independence may mean a chance to revise policies that are not contractor friendly or not friendly to employers that work with contractors.
EU Directives such as the unpopular Agency Worker’s Regulation could receive similar scrutiny, offering a look at just one of many decisions that could be open for re-interpretation as the split is negotiated.
May the Brexit also force our government to assess the home-grown legislation such as IR35 in favor of legislation that makes the UK a more attractive proposition for talent from abroad.
From where we sit, it’s easy to acknowledge that uncertainty abounds. A period of change is certainly upon us. However, the lining looks, at least at present, to be more silver than grey.
As the dust settles, we’ll be continuing to monitor with periodic updates.