Brexit, Risk and Planning for the unknown.

The world sat watching on the edge of its seat as the UK did the unthinkable and jumped blindfolded off the political cliff. From a risk management point of view, the UK just broke every rule in the book, but instead of us being scared off by the prospect of unknown risks, the UK truly embraced ALL risks and ALL opportunities.  

However, now we have entered the transitional period we must start to take seriously the possibility of separation from the EU with “no deal” and the impact that would have upon business continuity across industries. With a “no deal” remaining in place we will see the UK lose all rights under the Four Freedoms. For over two years, experts have talked about the ripple effect of Brexit and the risks it posed to multiple industries, but one industry in particular, has been surprisingly silent on the whole topic.

The Private Security Industry lives, breathes and thrives on risk, yet no one really seems to be very vocal about the potential impact to the industry itself. This becomes even more surprising when you consider the industry's dependency on two of the four freedoms. These being;

·         Freedom of movement of Labour

·         Freedom of movement of Trade

These two freedoms have been very lucrative to the UK PSI economy, enabling companies and workers to provide services to clients not just in the UK but across the whole of Europe with ease. However, for anyone who is proposing to travel to work in the EU post- Brexit, things will get a lot more complicated. Companies and workers will need to fulfil the specific conditions laid down by the EU law and the law of the particular Member State concerning “third party nationals” in order to live and work there. Work permits and visas will almost certainly be required, and countries may put caps on the number of people that will be accepted.

Over the years many UK Private security companies have relied upon the Posted Workers Directive to send people to work abroad, however those companies should now start to prepare and risk assess the possible impact to their workforce, profit margins and even business continuity, as those rights will no longer apply, unless they establish a business in an EU/EEA Member State and hire the relevant staff there.

After 31st Jan 2021, UK security companies could find that national rules and qualifications add unexpected barriers to who and where they can operate. Social security rights may change too, leaving workers and companies find themselves having to navigate multiple EU tax laws and ensure they pay the correct tax and social security in the EU country they are working in, in addition to UK tax.

The UK government are still hoping to agree a “bespoke deal” which again gives the industry unknown risks. Will the deal include the freedom of movement of services or labour?

I thought I would prompt the conversation and ask, what tips or concerns do others have surrounding Brexit? What has your company done so far to plan for the UK leaving the EU?

Here are my top tips for all Security Companies to help them plan effectively for the unknown.

1)      Revise your ERMP – Every company should have an Enterprise Risk Management Programme. This is a plan-based business strategy that aims to identify, assess, and prepare for any danger, hazards, and other potentials for disaster – both physical and figurative- that may interfere with an organization’s operations and objectives. If a large revenue stream to your company comes from work across Europe, now is the time to start to plan and ensure contingencies are put into place or new revenue pathways are explored.

2)      Collaborate with reputable European Security Providers. An inability to provide the work personally doesn’t necessarily have to mean the loss of a client or revenue stream altogether.  Many are wary about collaborating with other security companies, but if carried out in a professional and cautious manner, the opportunity that it brings to a company can start to outweigh the risk. Building strong global relationships benefits not only the companies involved and the clients experience, but also assists in increasing standards across the industry globally.

3)      Up your intelligence game. As my mother always told me “knowledge is power” It cannot be overstated how important it is to keep informed and updated on developments to prepare as far in advance as possible. Check the Government’s country by country advice, also check with the Member State itself and the European Commission website. I would also recommend that companies plan for both cases “no deal” and “deal”

4)      Create a combined risk team, pulling senior members from each department to collaborate during the transition period. Encouraging conversations between departments ensures that not only all are of equal and full understanding but ensure that any unknown or hidden risks are highlighted earlier than they possibly could have been.

5)      Plan for all eventualities. We may not be able to predict the future, but we can take an educated guess at it. Spend time reading up on the agreements that other countries hold with the EU, such as Denmark, Canada, Switzerland. It may be worth noting though the countries who all retained freedom of movement for workers, such as Switzerland and Denmark, hold Schengen Zone Memberships, the UK to date has not joined or shown interest in doing so, even when put under pressure by Remain campaigners to do so.

6)      Prepare your clients and workers. Companies need to be honest with their clients. If certain work is no longer viable, you need to make the client and workers aware as soon as possible, giving ample time to seek another provider if needed. Alternatively, you may just need to assure the client and workers that you have adequately planned or intend to collaborate with trusted companies to continue providing the service. The earlier you can make your Client and workers aware of any changes needed to be made, the easier it is for both parties to plan and prepare.

Hopefully, this article may highlight thought processes that require action, sooner rather than later, and acts as gentle guidance to any business owners who may be encountering the unchartered waters of unknown risk planning. If anyone would like further information please contact us at [email protected]

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