With Brexit Uncertainty Looming, UK Businesses and Employees Lose Confidence in Economy

With Brexit Uncertainty Looming, UK Businesses and Employees Lose Confidence in Economy

The deadline for the UK to withdraw from the European Union is coming up in just two weeks, on March 29. This week, the UK Parliament voted against a deal negotiated between Prime Minister Theresa May’s government and EU leaders, against a no-deal Brexit, and in favor of delaying the Brexit date in order to buy additional time to figure out a solution. Any delay will require the consent of the 27 remaining EU countries, which is not guaranteed, and even with more time, legislators will still face the same tough choices.

As the clock counts down to the deadline, Brexit has created a lot of uncertainty for UK organizations and their employees, especially workers from other EU countries whose future status is up in the air. This uncertainty has done significant damage to UK employees’ confidence in the business environment, Gartner’s latest Global Talent Monitor report indicates:

Employee confidence in the UK business environment has slumped, according to Gartner, Inc. The latest data in Gartner’s Global Talent Monitor report for 4Q18 shows employee confidence in near-term business conditions and long-term economic prospects reaching an index score of 55.6, a decline of 7.5 per cent from an index score of 60.09 in 3Q18. These results follow a worldwide trend that has seen global business confidence sink to its lowest point since the fourth quarter of 2017.

This lapse in confidence was paired with a sharp decline in employees’ active job seeking behavior, which fell by 7.2 per cent from 3Q18. Amid declining perceptions of the job market, coupled with the highly uncertain Brexit outlook, employees’ intent to stay in their current jobs in 4Q18 increased for the first time in 2018, as did their willingness to go above and beyond in their present roles.

UK employers are staring down the uncertainty of Brexit in the context of a tight talent market in which it has become exceptionally challenging to fill critical skills gaps. The Global Talent Monitor data from the final quarter of last year suggests that talent attraction will be a major challenge for employers this year, regardless of what happens with Brexit, as employees take a more pessimistic view of the job market and become more averse to the risks inherent in changing jobs. (Gartner for HR Leaders clients can see all the latest data from our Global Talent Monitor here.)

Uncertainty is a key factor — perhaps the key factor — driving the Brexit panic, as illustrated by the Decision Maker Panel, a survey of 7,500 UK business executives that researchers from the Bank of England, University of Nottingham, and Stanford University have been running regularly to gauge the impact of Brexit on companies. Writing at the Harvard Business Review, the researchers ascribe declines in investment, employment, and productivity to Brexit-related uncertainty:

Read more

UK Employers Wary of Future, Lack Spare Capacity Amid Brexit Uncertainty

UK Employers Wary of Future, Lack Spare Capacity Amid Brexit Uncertainty

A new survey of employers in the UK shows that uncertainty over Brexit and labor market worries continue to shake business leaders’ confidence in the country’s economic future, the BBC reports:

A survey of 601 employers by the Recruitment and Employment Confederation (REC) found 31% expect the economy to worsen, with only 28% expecting it to improve. … The REC’s measure of confidence has turned negative in the space of a month. In July the number of those employers who felt confident about the economy outweighed the pessimists by 6 percentage points. …

The REC’s JobsOutlook survey showed that 40% of employers had no spare capacity and one in five planned to take on more permanent staff to meet additional demand. However, their biggest problem was finding the right candidates, especially in the construction industry, for either temporary or permanent positions.

In the wake of June’s surprise election result, in which Prime Minister Theresa May’s Conservative party lost its majority in Parliament, the UK has faced even greater uncertainty as the government is proceeding with Brexit negotiations with a weakened hand. After the election, both business and labor leaders called on the government to take steps to strengthen the domestic labor market—but there may be limits to what the government can achieve in that regard.

In the meantime, People Management’s Hayley Kirton solicits the opinions of some experts as to what employers can do to face down the capacity challenge illuminated in the REC survey:

Read more