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Brexit divorce - for better or worse!

12 July 2016

By now the dust should be settling on the UK’s decision to leave the EU. Of course, since we awoke on the morning of the 24th of June, pretty much everything else has changed. The Prime Minister has resigned. Nigel Farage has gone.

Theresa May, a seemingly tentative ‘Remainer’, is the new Prime Minister. Who would have thought that Boris Johnson wouldn’t even stand for the leadership of his party? 

And whilst journalists and commentators are poring over the fall of the pound and the various political machinations occurring in Westminster, I’m sure that various sector specialists are now wondering what will happen to their particular areas of interest.

In the broader supply chain sector it is clear that there are lots of questions to be asked about the future. Will manufacturing be negatively hit? Will the UK become a place where people choose to invest and place their factories, distribution centres etc? Or will we be left with trade agreements which result in capital flight? Whilst we nervously watch the falling pound prior to our summer holidays, is it actually the key to our future, export driven, prosperity?  Or is the way to ensure that fuel prices quickly become prohibitive?

But operationally, it is clear that Brexit may quickly have some pretty serious impacts on the supply chain.

Recruitment: Employers will tell you that recruiting qualified, experienced, dedicated staff is not without challenge. The driver shortage has long been discussed, but there are issues elsewhere in the supply chain too. Across the board, particularly in technical roles, our sector has become reliant on people who were not born in the UK.  If we have a point based immigration system, will the Supply Chain sector be protected and supported?

Wages: I think we must assume that freedom of movement is likely to be restricted following our leaving of the EU. Who knows what market corrections may come in the next two years, but ceteris paribus, conceivably fewer qualified people will be available to work in the sector, meaning even more competition for high calibre candidates. Simple supply and demand laws tell us that prices, in this sense wages, may rise.

Of course, on the back of the new living wage which set the hourly rate at £7.20 for the over 25s, these market pressures are surely likely to push wages for technical jobs up and potentially, up yet further!

Skills: What now is the future of DCPC? Why would we abide by a previous European directive now? If DCPC is already on its way into the history books why would any drivers complete it in this cycle? Have we opened up a return route for the drivers who decided to leave the sector in 2014?  The driver shortage was previously mitigated by individuals from Europe. Will the future solution be the recently retired?

Of course, it seems likely that international staff will still have to be compliant, but at a stroke, have we removed the need for couriers, bus drivers, UK only drivers, to complete DCPC?

For the next two years at least, of course, the law is the law, but I imagine that we all have an eye on the future. Recruitment will change. Wage pressures will vary. Mandatory training requirements will be different. And no doubt you are already looking at whatever savings you can make on adhering to other EU directives. 

As always, of course, the UK Supply Chain sector will find a way to overcome challenges and will prosper. But the future will be very different from the current, and at the moment with all this talk of divorce, it’s tough to see whether this means for better – or for worse!