A Brexit Dividend?
As the deadline for the UK’s exit from the EU fast approaches, there is still no deal on the table. This ongoing uncertainty continues to create challenges and concerns for business.
For some, however, they don’t see challenges, but opportunities. From an industrials sector perspective, Brexit does present a catalyst for change. In particular, it creates an opportunity for automation and the upskilling of a workforce. There are two reasons why I believe this, based on conversations with clients and what I’ve seen in the sector so far.
Firstly, there is the devaluation of sterling. When I talk with UK clients – many of which are global businesses – they have benefited from devaluation. However, whilst there are obvious currency benefits, some recognise an opportunity to improve their competitiveness and invest further in their business.
Secondly, Brexit is causing a tightening of the labour market. The ability to bring in skilled labour, particularly Eastern European, has become more challenging. With labour illiquidity, we are starting to see a desire to upskill the UK workforce, as well as more openness towards automation.
We see an opportunity developing around how the UK increases productivity. When comparing UK businesses with those in North American or Europe, we can see that in some instances, we have tended to use the flexibility of our workforce as a means of managing growth rather than investing in automation and capital expenditure. Typically, when comparing similar businesses in the UK to those overseas, the UK labour spend is on average 2% of revenue higher than their foreign counterparts. In addition, there’s less CapEx and depreciation going into those businesses.
In summary, whilst there are negatives to the Brexit process, it can be argued there are also positives. Some businesses are looking inward, but others are assessing and embracing challenges to find a competitive edge. In these challenging – but for some exciting – times, an increasing number of our clients are deploying experienced and skilled Interim Executives to give them impact and to help them take advantage of Brexit opportunities.
If you would like to discuss this topic in greater detail or find out more about how we can help you, please do not hesitate to contact us for an initial and confidential conversation. For more details contact Nick Behan on +44 (0) 0207 484 0106 or at firstname.lastname@example.org