The Talent Ramifications of the Brexit Deal (or No Deal)

The Talent Ramifications of the Brexit Deal (or No Deal)

The UK’s planned exit from the European Union is fast approaching, and a new deal over the terms of that exit faces an uncertain future in the UK parliament. Whatever happens, there will be talent implications for employers and HR leaders in the UK and Europe. Below is our broad look at the background of the process and terms of the latest proposed deal, and what the potential consequences could be — viewing several key issues through the lens of HR, including immigration, employment law, and the risks of a no-deal Brexit.

Fast Facts

  • The UK will formally exit the European Union on March 29, 2019, marking the deadline for UK and EU negotiators to reach a deal on an orderly Brexit transition. UK Prime Minister Theresa May has reached a draft agreement with the EU that would provide for a 21-month transition period, after which the UK would be able to control immigration from the EU, while backstop measures would allow the UK to remain in the EU customs union and enable a soft border between Northern Ireland and the Republic of Ireland if a final trade deal is not reached by December 2020. The transition period could be extended once, into 2022, if the UK and EU agree to do so.
  • A scheduled Parliament vote on the deal with the EU was delayed on December 10 after the May government realized the agreement would most likely be rejected. May then survived a confidence vote two days later, and plans to continue lobbying for the deal, which will not be scheduled for another vote in Parliament until sometime in January.
  • May’s deal, as drafted, would preserve the free movement of labor between the UK and other EU countries for the duration of the transition period, while any EU citizens living in the UK before the end of that period would have a right to stay, but would have to apply for residency documentation. Afterward, EU citizens would no longer have special privileges in immigrating to the UK. May has proposed a skills-based system for admitting immigrants after Brexit, but some business leaders and the National Health Service fear this system will leave them short-staffed in roles that would not qualify as high-skill under May’s scheme but for which native talent is in short supply.
  • The UK government has pledged to uphold employment laws based on EU regulations after Brexit, but some of these laws may be partly amended to be more flexible for employers or to reduce their liabilities. Unions, however, fear that these protections may be weakened substantially.
  • If there is no deal by the March 29 deadline, the UK will face a “messy” exit from the EU—likely causing severe economic disruptions. In the event of a no-deal Brexit, the UK would revert to trading with Europe under World Trade Organization guidelines, reintroducing customs and border controls. A no-deal Brexit can be expected to hurt the pound and cause instability in the British financial sector, which could spread to continental Europe and the rest of the world.
  • In a no-deal scenario, the government has promised that EU citizens’ immigration status would not change before 2021, but it remains unclear what employers will have to do to ensure that their European employees are able to continue living and working in the UK. Many businesses have put contingency plans into action to protect against the consequences of a no-deal Brexit, but most HR managers in the UK are underprepared for this scenario. In any case, Brexit is expected to result in a labor supply shock and make it more challenging for UK employers to fill job vacancies.

Background

On June 23, 2016, citizens of the UK narrowly voted to withdraw their country from the European Union. The “Brexit” referendum sent a shockwave through the British, European, and global economies, and prompted concern and uncertainty at many organizations in the UK and abroad.

Conservative Prime Minister Theresa May, who came to power shortly after the referendum in 2016, has worked to cut a deal with Brussels that preserves the UK’s strong trade ties with the EU, but has also stressed that no deal is better than a bad deal as far as her government is concerned. UK and EU negotiators deadlocked over several key points where London and Brussels are at cross-purposes, and uncertainty over whether and how these obstacles will be overcome has been a major source of anxiety for UK businesses over the past two years.

Chief among these issues are immigration and the free movement of people between the UK and the rest of the EU. May has stressed the need for the UK to “take back control” of its borders, even if it meant losing access to the EU’s single market. Free movement of people is one of the “four freedoms” underpinning that single market; the UK wants to preserve free movement of goods, services, and capital, while regaining the right to restrict immigration from the EU. For its part, Brussels has resisted creating new forms of special treatment for the UK that would make Brexit easier, partly to discourage other EU countries from pursuing exits of their own. Another, related area of disagreement is the border between the Republic of Ireland and Northern Ireland, which forms the UK’s only land border with another EU country. Many businesses on the island of Ireland have supply chains that cross that border every day and employees living on both sides of it; creating a hard border with customs and immigration controls would be costly and complicated for these organizations.

The deadline for reaching an agreement is March 29, 2019. If no agreement is reached, the UK will “crash out” of the EU and trade with the bloc under World Trade Organization guidelines. May announced on November 25 that her Brexit negotiators and their counterparts in Brussels had reached a draft agreement that would solve some of these challenges.

A vote on the deal in the UK Parliament had been scheduled for December 11, but May called it off one day before when it was clear that the deal was going to be rejected. Many MPs opposed the agreement, claiming the proposed Brexit is too hard or not hard enough, or because they believe the country should hold another referendum on the question before proceeding.

Prime Minister May said on December 10 that she would ask the EU for new “reassurances” on the deal, and in particular the backstop plan for the Northern Ireland border, which many MPs said they opposed. The EU has maintained they will not renegotiate the agreement, however. May’s government offered no specific timeline as to when there would be another scheduled vote in Parliament on this or any revised deal — but has said it will not happen until January. There is also a January 21 deadline to present the deal to Parliament. May survived a confidence v

Here is a broad outline of what might happen next and the key issues HR leaders need to understand:

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Reimagine HR: 3 Questions to Ask Before Implementing Learning Analytics

Reimagine HR: 3 Questions to Ask Before Implementing Learning Analytics

The digital transformation of learning and development offers HR leaders new opportunities to embed learning within their talent strategies and make the business case for L&D investments crystal clear. Part of the promise of digital learning comes with the application of data and analytics, enabling organizations to measure and communicate the impact of these programs more precisely than ever before. Unfortunately, as with all new technologies, the rapid emergence of new options can be overwhelming, not every solution is right for every business, and adopting a technology without a clear understanding of how it will generate value can be a very expensive mistake.

To survey this new landscape of learning analytics, Justin Taylor, Director, Talent Solutions at Gartner, moderated a panel discussion at our ReimagineHR conference in Orlando on Monday, bringing together Patti Phillips, Ph.D, President and CEO of the ROI Institute; Dave Vance, Ph.D, Executive Director of the Center for Talent Reporting; and Kimo Kippen, a former Chief Learning Officer at Hilton. The conversation covered the range of new technologies emerging in this space, the opportunities they provide, and the challenge of figuring out how to take advantage of those opportunities.

When considering an investment in learning analytics, the L&D function should keep a few strategic considerations in mind. Based on Monday’s discussion, here are a few of the key questions leaders should ask themselves:

What is your objective?

There are a number of technologies currently on the market that apply analytics to L&D in different ways and to different ends. There’s adaptive testing, in which training modules and skill assessments automatically adapt to each individual’s level of ability. Learning record stores and xAPI record and track learning experience data, allowing organizations to track the progress of learning employee more closely and draw more insights from that data. Learning experience platforms offer new ways of delivering learning to employees on an individualized, self-directed basis. Natural language processing, machine learning, and augmented and virtual reality are also finding applications in learning.

With all these options out there, the panelists agreed, it’s important for an organization to identify just what they hope to get out of learning analytics before buying a new piece of enterprise technology. Don’t chase a shiny toy, Kippen advised, but ask what the business objective is and whether the investment is worth it. You might find that the extra dollar is better spent on fundamentals, Vance added, as new technology won’t fix more fundamental problems in your L&D program. “Without algebra,” he analogized, “you’re not ready for the calculus.”

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ReimagineHR: In the Digital Age, What Does Great Leadership Look Like?

ReimagineHR: In the Digital Age, What Does Great Leadership Look Like?

Digitalization means much more for organizations than the adoption of digital technologies. It is a holistic change event that affects many fundamental pillars of how our businesses operate, including our people processes. One of these implications touches on how we select, develop, and deploy leaders, which has inspired a lot of concerned chatter about new “digital leadership” competencies that will make the most effective leaders of today and tomorrow dramatically different from those of the pre-digital era.

At Gartner’s ReimagineHR conference in Orlando on Monday, George Penn, VP and Team Manager at Gartner, facilitated a panel discussion with three experts in talent acquisition and development, drawing out their insights on how leadership really is changing in this new age, and which of these supposed changes are overhyped. Our panelists included Julie Loubaton, VP, Talent Acquisition at Keurig-Dr. Pepper; Christopher Lubrano, VP, Leadership and Organization Development at International Flavors and Fragrances; and Hari Abburi, VP, Global Talent at Dawn Food Products. Here are some key takeaways from Monday’s conversation:

Leadership fundamentals aren’t going anywhere

Foundational leadership qualities are still essential, Loubaton said. Businesses are, as always, looking for great strategic thinkers. Creativity, communication skills, and vision are as important as ever, the panelists noted, but these are not new. Lubrano also stressed the importance of fundamentals: Leaders today need a strong ethical foundation and an ability to connect with people and establish a sense of community among their team members. Again, these competencies have always been valuable elements of a managerial skill set. Strategic vision, creative thinking, and interpersonal skills remain table stakes for business leaders and most likely, always will.

So what is new?

Agility, adaptability, and the ability to lead fast-paced change are the key skills that are becoming more important for leaders in digital enterprise, the panelists said. Loubaton said her organization was looking for industry disruptors, who understand how to leverage new technology to upend traditional ways of doing business in their field and are not afraid to take that leap. Agile thinkers who are comfortable operating in a fast-paced, high-tech environment are becoming more valuable. Lubrano emphasized the importance of change management skills: creating urgency, maintaining focus, and clearing the path to new ways of working. The accelerating pace of change, Abburi added, means that while strategic planning skills are still fundamental, leaders now have to be able to formulate and execute strategies on a shorter cycle.

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PwC Is All-in on Developing Its Employees’ Digital Skills

PwC Is All-in on Developing Its Employees’ Digital Skills

Building cutting-edge technological capabilities within their existing workforce is among the most pressing business challenges organizations face today. The accountancy firm PwC is taking a notably aggressive approach to this upskilling project, giving employees as much as 18-24 months to devote to immersive learning of new skills, with half their time spent training in these skills and the other half working with clients to put them to use. Ron Miller recently profiled the PwC’s Digital Accelerator program at TechCrunch:

[Sarah McEneaney, digital talent leader at PwC] estimates if a majority of the company’s employees eventually opt in to this retraining regimen, it could cost some serious cash, around $100 million. That’s not an insignificant sum, even for a large company like PwC, but McEneaney believes it should pay for itself fairly quickly. As she put it, customers will respect the fact that the company is modernizing and looking at more efficient ways to do the work they are doing today. …

Members of the program are given a 3-day orientation. After that they follow a self-directed course work. They are encouraged to work together with other people in the program, and this is especially important since people will bring a range of skills to the subject matter from absolute beginners to those with more advanced understanding. People can meet in an office if they are in the same area or a coffee shop or in an online meeting as they prefer. Each member of the program participates in a Udacity nano-degree program, learning a new set of skills related to whatever technology speciality they have chosen.

The program focuses on a critical set of digital skills that are increasingly in-demand and where expertise is in short supply: data and analytics, automation and robotics, and AI and machine learning. McEneany and PwC’s Chief People Officer Mike Fenlon expanded on their philosophy in a recent piece at the Harvard Business Review, detailing the process through which the program was designed and touting its success at fostering innovation and a growth mindset throughout the organization:

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Microsoft Adds New HoloLens Tools, Walmart Doubles Down on VR Training

Microsoft Adds New HoloLens Tools, Walmart Doubles Down on VR Training

Microsoft has added a series of new AI and mixed reality services to its enterprise software product line Dynamics 365, VentureBeat reported last week, including tools based on its HoloLens augmented reality headset:

Mixed reality services from Microsoft for the workplace were first made available in preview in May and will become generally available in the coming weeks, a Microsoft spokesperson told VentureBeat. Remote Assist allows technicians and experts within companies to see what frontline workers can see, then help them solve problems using HoloLens while they work with their hands. It’s a scenario as old as the corporate VR/AR craze itself.

Layout, another mixed reality tool, helps people visualize the placing of items in commercial or industrial settings, working with 3D models to resize, move, and quickly edit layouts with real-world scale. Companies like Chevron currently use Remote Assist today for facility inspections.

The new AI services include a program to help sales managers analyze and improve their associates’ performance, as well as new customer service and market research tools. Microsoft first began presenting the HoloLens as an enterprise tool last year, when it unveiled a second-generation design incorporating a powerful AI coprocessor. That announcement came within a week of Google unveiling the enterprise version of its own AR headset, Google Glass.

The applications for these mixed-reality devices are wide-ranging, with some companies already using them in manufacturing, shipping, and health care. One of the clearest use cases for VR and AR in the workplace is in learning, where it offers a way to immerse new employees in real-life work scenarios with drastically lower risk and expense than real-life immersion training. Walmart has been among the vanguard of large employers experimenting in this area; last year, the retailer announced plans to expand VR training to all 200 of its training centers after a successful pilot project. Now, it’s taking its commitment to VR training one step further and planning to deploy Oculus Go headsets at each of its 5,000 stores to allow for more frequent training, TechCrunch reported last week:

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ReimagineHR: Gig Economy Strategies for Mobilizing Talent Inside Your Organization

ReimagineHR: Gig Economy Strategies for Mobilizing Talent Inside Your Organization

When we think of the “gig economy,” we usually think of platforms like Uber, Deliveroo, Fiverr, or Freelancer.com, which offer users flexible, contingent work on a piece or project basis. Taking a broader view, however, the advent of the gig economy has also had an impact on the way traditional employers think about meeting their talent needs. In our research at Gartner, over the past several years we have seen a number of organizations experiment with new models of hiring, engaging, and assigning workers, inspired by the gig economy. At our ReimagineHR event in London last week, Gartner Practice Leader Thomas Handcock walked HR leaders through several of these models and discussed how they might leverage them in their organizations as well.

Internal Career Marketplaces

Compelling career paths and opportunities to learn and grow within the organization are increasingly important aspects of the employee value proposition, particularly—though by no means exclusively—for Millennial employees. The stereotype of the Millennial job-hopper reflects the notable desire among employees of this generation for a greater variety of experiences in their careers. If your organization can’t offer employees this range of experiences and opportunities to acquire new skills, they are likely to seek them elsewhere: Lack of development opportunities is among the leading drivers of attrition for employees worldwide, Gartner’s Global Talent Monitor data show.

To address this demand for development and variety, innovative employers are making it easier for their workers to find their next job within the company rather than outside it, through internal career marketplaces. These marketplaces, which at companies like HCL Technologies operate through digital platforms, can help employees plot their career paths and understand what internal moves they need to make to reach the position they desire. This allows them to develop their careers more rapidly or grow in new directions more easily without changing employers. For the employer, these internal labor markets offer an effective way to retain and develop high-potential employees. Internal hires for new roles also require less onboarding and come with the benefit of pre-existing institutional knowledge and alignment with the organization’s culture. (Gartner Corporate Leadership Council members can learn more about HCL’s Career Connect portal in our case study.)

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ReimagineHR: The Two Key Attributes of Connector Manager Coaching

ReimagineHR: The Two Key Attributes of Connector Manager Coaching

Organizations today are under tremendous pressure to innovate, expand their capabilities, and become more efficient and competitive. To achieve those goals, managers are called upon to play an even more active role in steering their direct reports’ professional growth and development. As coaching becomes a more critical aspect of managers’ jobs, HR functions are devoting more attention to training managers in the best ways to drive performance on their teams.

In our research at Gartner, we’ve identified four types of managers, each with a distinct approach to coaching. These include the teacher, who develops employees using their own experience and expertise; the cheerleader, who enables employees to take their development into their own hands; the connector, who introduces employees to the right people to meet their development needs, and the always-on manager, who provides continuous coaching and feedback across a broad range of skills. In an era when organizations are most concerned with constant growth and performance improvement, the always-on management style has become common, even preferred. However, our research finds that it is the least effective of the bunch; in fact, always-on managers tend to degrade employee performance rather than augmenting it. Teachers and cheerleaders improve performance to a degree, but it’s the connector manager who stands out, with a maximum impact on employee performance of 26 percent: around three times the impact of a teacher or cheerleader.

The connector manager model is not really new, Principal Executive Advisor Scott Engler pointed out in a session at Gartner’s ReimagineHR event in London last Wednesday. In a sense, it represents a return to the roots of performance management theory from the 1980s, before the term became conflated with performance measurement and ratings, and coaching transformed into feedback. By becoming connectors, managers can rediscover the power of coaching and substantially increase their impact on their team members’ performance without spending time they don’t have.

The high-impact coaching connector managers do has two essential qualities: it takes an employee-centric approach and uses a broader coaching network.

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