Post-Brexit uncertainty is real for businesses in the UK. As we enter the uncharted waters, companies in the IT space are unsure about vital issues such as data flows and funding for research and development. If a deal does not come through by the end of March, the UK will leave the European Union without any trade agreement or any other arrangements which modern economies rely on to do business.
As March edges closer, fear and uncertainty loom over UK contractors as they speculate about far-reaching implications of Brexit. While the job market appears to be stable and smooth today, this may not be the case as the UK ventures into the dark.
If you’re a contractor or a full-time employee in the UK, in these uncertain times, you might wonder what lies ahead for your career. Let’s explore the negative and positive impact of Brexit on your work and analyse how it might affect your pay.
Contractors believe their business will stay untouched by Brexit. A research that polled 1,350 freelancers in the UK found 44% of contractors believe Brexit will not affect their business, while 18% of them believe Brexit might even have a positive impact on their work. Meanwhile, 38% of contractors confessed they think their business would be negatively affected by Brexit.
Working in the EU
UK contractors might find it hard to work elsewhere in Europe post Brexit. Since these factors largely depend on the exit negotiations, it is still early to say whether or not UK residents would be able to work in Europe without restrictions. Free movement of EU citizens in the UK was a hot issue during the campaign, which means contractors might face hurdles working in the EU.
Let’s talk in numbers. Around 45,000 UK contractors live and pay taxes there but work in mainland Europe, either on short-term contracts or by commuting to work every day. Many of these workers fear to lose the opportunity to work outside the UK as they are only eligible to do so now because Britain is part of the EU.
However, it is worth noting at this point that when Britain finally exits the EU, there will be a transition period ending Dec 31, 2020, during which, people will have a chance to adjust. Contractors will be able to complete jobs during this period and free movement will continue.
The Hard Brexit Case
For Britain, leaving the European Union with no deal would have significant consequences on the movement of both people and services. Businesses affected by Brexit would lead to challenges for contractors in the UK and Europe.
In case the government and the EU fail to reach an agreement, the 21-month transition period would not happen, resulting in more complex conditions. This might severely affect tariffs on trade and increase uncertainty over the rights of Brits in the EU and of EU nationals in the UK.
To make matters worse, companies might decide to move out of the UK if the government fails to reach a deal.
Pricing Out of the Market
Another point to consider is that when we make it harder for workers from outside the UK to work here, the competition gets less fierce, forcing up rates for IT contractors. Looking at the flip side of this positive, this could also mean that the UK now becomes a less attractive option to outside investors.
Running operations from Spain, Ireland, or France might make more sense to multinationals who have to pay premium prices to access the highly experienced IT consultants in the UK. HSBC has already claimed to move 1,000 jobs from London to Paris if Britain leaves the EU.
With the current standing of the steel industry crisis in the UK, it is not hard to see the devastating impact a cheaper overseas competitor can have on our economy.
While uncertainty persists in the UK, companies will be reluctant to invest in permanent staff. At least until they can comprehend what Brexit is doing to their business- both good and bad. UK companies might eliminate contractor positions, or restrict the amount of time contractors can work, or replace contractors by permanent employees.
Companies usually have to shell out more to get a job done by a contractor as opposed to hiring someone full-time. For this reason, some businesses might make a hard and rare choice to hire permanent employees even in this shaky period.
All of which, depends on how well or worse Brexit treats employers. As companies in the UK hold off hiring permanent staff until they’re clear about Brexit, new projects and system changes still need talent and resources. This is where contractors might come in. Therefore, the net result of hiring decisions might end up in favor of contractors as companies try to stay on the ground while the shift takes place.
For start-ups, Brexit job opportunities could be high as this might be the perfect time to partner with contractors, as they try to get off the ground in these uncertain periods. Experts believe that to maintain a loyal workforce and sustain the health of the business, employers should hire a blend of full-time employees and contractors.
Britain’s self-employed workforce contributed $271 billion to its economy in 2017- a fact that tells us how important this industry is for the UK.
Contractors are known to thrive in uncertain markets. So, will Brexit affect contractors positively? We think so.
How Can LynxPro Help?
Through the wave of instability, we believe many benefits for contractors are likely to arise. If you are a company looking to hire proficient and experienced IT contractors, we can help.
Alternatively, if you are a full-time employee working in tech elsewhere in Europe, wanting to come back to the gig workforce, we can help you sail through these challenging times!
LynxPro is a team of specialist recruiters who bridge the gap between employers and contractors. Learn more about our services and discover how we can serve you, here.