Peter Cheese, CEO of the CIPD, gave a keynote presentation at CEB’s ReimagineHR event in London on Wednesday to talk about the impact of Brexit on HR and workforce development in the UK. Here are some of the key issues and insights that came up in his conversation with CEB’s Talent Solutions Architect Jean Martin:
The biggest risk from Brexit is paralysis.
Prior to the presentation, a quick show of hands among the HR leaders attending the event showed that most were taking a wait-and-see approach to Brexit and had not made definite plans for how to deal with the aftermath. One of the confounding factors in responding to Brexit is that nobody really knows how the results of June’s referendum will ultimately shake out. Cheese described a recent event he attended at which the editor of the Economist polled the room as to whether they thought Brexit meant Brexit (the UK leaves the EU and that’s that), Brexit meant breakup (Brexit leads to a larger-scale disintegration of the EU as other countries pull out), or the UK wouldn’t ultimately go through with Brexit at all. Each answer got about a third of the vote, he said, indicating that even the most informed observers of the situation have no idea what to expect. So the biggest risk for organizations, he stressed, is in not planning, not acting, and behaving as though the outcome is entirely outside their control. To survive and thrive in a post-Brexit world, organizations need to adopt the mindset of leaders, rather than victims, of change.
Brexit reflects an environment of eroded trust, which has many other implications for business and HR.
One of the circumstances that enabled the Brexit referendum to pass was a high level of public distrust in institutions—the EU, the government, the media, business elites, and so forth. This distrust of “the establishment” has manifested itself in numerous societal challenges, not only in the UK but in other countries as well. In a time of frequent and disruptive change, trust issues become very dangerous, as Cheese noted that people become more resistant to change in the absence of trust, and organizations today need employees, middle managers, and leaders to be fully open to change in today’s work environment. Workers also need to feel that their organization trusts them, he added, or they will be less likely to speak up at a time when their input is more valuable than ever. Young people, in particular, won’t stand for not being listened to.
One solution to this trust deficit is transparency, Cheese said. Corporate scandals have eroded public trust in business, yes, but so has a lack of transparency and accountability. Organizations should be more open about their people, their diversity efforts, and how they are investing their resources. On the other side of the coin, they must demonstrate real willingness to listen to their people. After all, with so many new channels of communication available to them, employees are talking whether or not their employers are listening. To fix this situation, the CIPD chief recommended, leaders need to show humility, starting by listening and engaging with their people and building an environment of trust.
Brexit will be a big change, but it’s not the only change UK businesses are dealing with.
While Brexit is in some ways a unique event, to HR professionals dealing with constant change, it’s “another ripple in the pond,” Cheese said. Organizations were already operating in an increasingly volatile and uncertain environment, and Brexit adds urgency to that debate but doesn’t fundamentally alter it. That’s not to say it won’t be a tremendous challenge for HR—Cheese said he had heard from civil service leaders that it could take ten years to figure out the full consequences—but he also encouraged the audience to approach it as an opportunity and an impetus to think harder about the future, rather than merely a setback. Even before Brexit, there was a growing debate about the role of people in organizational strategy, and HR was coming to the fore of business thinking. Brexit or no Brexit, Cheese said, there’s never been a more exciting time to be in HR.
Automation, in particular, is a huge driver of change.
Technology, Cheese added, stands to upend the UK labor market far more severely than Brexit will. “I think this is an enormous inflection point,” he said, and the main challenge for HR is to ensure that the jobs that remain for human beings in the “Fourth Industrial Revolution” offer meaning, purpose, and opportunity for growth. That’s not to mention the millions of employees at risk of being replaced entirely by machines in the coming years: Cheese pointed to projections from the British Retail Consortium that one in three retail jobs may disappear in next five years, noting that the retail sector employs one-sixth of the UK workforce. In this context, organizations are focusing ever more strongly on productivity, which poses a challenge in itself: How do we create more productive work environments that are good for people’s health and wellbeing?