I had doubts about writing this column, but I just couldn't get it out of my mind. Then I realized that I might be on to something that you would find interesting when my Board of the Bay Area Compensation Association (BACA) invited Gary Schlossberg of Wells Capital Management to speak about, 'From "Goldilocks" to "Alice in Wonderland:" The U.S. and Global Economies in a ""Post-Brexit" World.'
I'm no economic or financial wiz, but I just came back from Europe where I spent a decent amount of time listening to the BBC. Here are important issues relating to our employment and compensation work that I thought I should pass along in case you haven't run into them yet. I'm sure there are many more. Even though Brexit hasn't really been initiated yet, people are acting as if it will be.
The new UK Prime Minister, Theresa May, has promised to raise wages (at the same time that she has promised to cut taxes). While this may seem a typical political gambit, she is known to be an interesting combination of tough conservative politician with liberal instincts toward social policy areas like living wage and housing.
There is a strong feeling among British economists that Britain is heading for a recession. The Financial Times is already reporting on how growing inflation will hit low wage earners. Others are reporting on the financial impact on Germany and other EU partners.
Recruiting issues will grow. EU employees in Britain who are not British are worried about their career prospects, both because of the potential economic disruption in the UK but also because of real barriers to working in the countries that remain in the EU. In other words, I won't be able to easily transfer from my customer service job in London to the sales job I wanted in Paris. Now there will be limits to the number of employees allowed into the EU from Britain and paperwork to be approved. Ireland is emerging as one of the EU partners with appealing tech and biotech job opportunities that will have no such barriers (and it's a convenient place to move).
Commonwealth countries are questioning their "special relationship" with the UK that allows easy trade and employment access so they don't experience guilt by association. Specifically, Australia is discussing a withdrawal from the Commonwealth which would also cause staffing issues due to additional limits on employee mobility.
Having cut themselves off from the EU, Britain now has to negotiate its own trade agreements. The problem is, they have no trade negotiators because they haven't needed them since they joined the EU. If you employ people with these skills, keep an eye out for poaching as Britain has been clear that it will bring in people from outside the country. They need warm bodies right now and will no doubt pay handsomely for them.
On the day-to-day level of employee relations, people continue to write in to The Guardian and The Financial Times for advice on how to handle divided politics that have hurt the office climate. The vote was so close and was so clearly divided between urban and rural and immigrant vs. non-immigrant rights and so on, that feelings are still raw. If you think you understand this, think again. For instance, in spite of the immense diversity in London the immigrant population that is being pressured, at least initially, are the Poles. (And hate crimes have already begun to climb.)
--I hope this short briefing will come in handy. If you find it helpful given your own business and talent requirements, it may be time to invite your local economist or business strategist to visit with you as BACA has done. I'll return to my series of articles on pay transparency in my next blog.
Everything you do in compensation is communication, so why not do everything better? The popular ebook, Everything You Do (in Compensation) Is Communication @ https://gumroad.com/l/everythingiscommunication belongs on your summer reading list. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, communications and leadership to topics like the CEO Pay Ratio and performance management discussions at the Café. Before founding re:Think Consulting, Margaret was a Principal at Willis Towers Watson.