How to prepare for post-Brexit challenges and opportunities

At the stroke of 11 p.m. on the 31st of January, the UK officially left the European Union. After more than three years of heated debate and political wrangling, the first phase of Brexit is now complete.

The UK will remain in a transition period until the end of the year, where it will follow EU rules and contribute to the Union's joint budget while the nature of the country's relationship with its biggest trading partner is hammered out.

What does this mean for Technology in times of change?

Businesses tend to look to their technology function in times of change, whether it is to drive down costs or power innovation: the Brexit period is no exception. The UK may no longer be a member of the EU, but the ongoing transition period means the impact of its departure is yet to be fully felt - and UK-based organisations will need be prepared for the new business realities that are still taking shape. 
Pressure on the IT function is likely to build as a result of this economic flux, as companies increasingly rely on technology to put them in the best position for doing business after Brexit. The UK's departure from the EU, and the changes to the economic landscape that it has brought, will renew companies' emphasis on IT to increase competitiveness and open up new markets. 
 

Restarting investment

The previous uncertainties around Brexit had caused business leaders to take a more conservative and strategic approach while they awaited more clarity on how the UK's future relationship with Europe would look. Thanks to a greater sense of stability, organisations are now taking a more forward-looking view on spending. There are signs that execs are now ready to begin investing in technology once again, reinvigorating plans for capital expenditure that had been paused pre-Brexit. This year is expected to be a "recovery year" for IT spending, signalling a return to growth following three years of decline. Meanwhile, overall UK productivity is beginning to rise again after a period of stagnation.
Alongside an increase in IT spending by UK-based organisations, the country's homegrown technology industry is thriving too. Government research suggests that the digital sector now makes up 8% of the UK economy. The UK tech sector also outperformed many other industries and last year attracted record inward investment, according to statistics from the Department for Culture, Media and Sport. Also, £10.1bn was funnelled into the industry by overseas investors, outstripping both the US and China over the same period. 
This picture is likely to be sustained even once the transition period is over: according to a recent analysis, technology and communications in general, and IT and programming in particular, will be among the major drivers of growth in the UK's post-Brexit economy.
However, a growing technology industry needs a growing staff base to fuel it - and it is not just the UK's startups that are expanding. Household names including Facebook, Deliveroo, and Amazon have recently committed to increase their technology hiring levels.  

Finding the right candidates

However, skills shortages have been a staple of the technology sector for years, and at last count, open vacancies in the sector still numbered in the hundreds of thousands. Both established technologies such as cloud computing and potential disruptors like AI have high levels of unfilled vacancies for key posts.
Furthermore, one of the side effects of the UK's departure from the European Union has been fewer overseas workers coming into the country, with the number of new personnel from Europe having decreased consistently year-on-year since the referendum. This fall in new workers may be a temporary blip or it may become the new normal; either way, finding the right hire is set to become more challenging for those without a strategy that's appropriately attuned to the market.  
The effect of Brexit will be further augmented by the upcoming IR35 reforms scheduled to come into force from this April. There has been talk of a delay to the implementation of the new rules, designed to crack down on tax avoidance. However, to date, the government has only pledged to review the legislation, and looks unlikely to put back the April deadline. 
It is expected that IR35 will have a negative impact on the contracting sector in the short term, while both self-employed workers and those using their services consider what the changes will mean in practice. With some estimates suggesting contractors could find themselves having to fund a tax increase of 25% in real terms, it is likely that many freelancers contemplating a return to staff roles will see IR35 as the push they need to make the move. One survey found 10% of contractors are planning to leave self-employment after the IR35 changes, with a further 40% weighing up their options. In parallel, employers may find that the reforms serve as an impetus to switch from using long-term contractors to making permanent hires to complete ongoing projects.
While negotiations about the trade agreement between the UK and the EU are still ongoing, the UK's January withdrawal has created a period of relative calm that jobseekers and companies should prepare to act on. For companies with open vacancies, now is shaping up to be a good time to find that crucial new hire. Staff employed within in-demand functions may be tempted to restart their job seeking after waiting out ambiguity around how Brexit would impact staffing levels and relaunch their CVs at a time when investment is flowing into the sector. 
That means companies looking to fill gaps in their technology function are currently in a sweet spot for finding the newest member of their technology team. Talented staff are more willing to consider a move, while competition for that type of personnel is only going to increase in the future as more CFOs sign off on costs associated with new hires. With the first stage of Brexit complete, business confidence is on the rise: a recent survey of CFOs found that worries over Brexit are fading. Heads of finance are rediscovering their appetite for risk, and now expect to see both capital and hiring increase over the next 12 months.
The UK is entering a new phase of trade with the EU. Finding the staff with the vision to shape technology policy and help companies confront the challenges and opportunities of Brexit will be a necessity for UK organisations going forward. 
If you are looking to find the next member of your technology team, submit a job spec today. To discuss your recruitment needs with one of our specialist consultants, for advice on how to streamline your recruitment process, or for any other enquiry, please get in touch.