Lions and Tigers and Brexit, Oh My!

“Life goes by fast. Enjoy it. Calm down. It's all funny. Next. Everyone gets so upset about the wrong things.”

-Joan Rivers

Thursday, June 23rd, 2016, citizens of the United Kingdom held a historic referendum on whether they would like the United Kingdom to remain a part of the European Union, or if leaving the European Union was in their best interest.  The campaigns and arguments on both sides were spirited, and at the end of a very long night of coverage, it was announced that the citizenry had elected to leave by a slim margin.  The company I am proud to represent, InteliSecure, has both a significant presence and a large volume of customers both in the United Kingdom and the larger European Union, so there was understandably a rash of questions being posed to us about what this means for everything from the ability for members of our UK office to do business elsewhere in Europe, to our ability to deliver services and all of the perceived changes that were afoot.  There have been plenty of “the sky is falling” sentiments and amongst all this chaos and confusion I have been repeatedly asked questions that center around “What is changing?”, “How will this affect us?”, and “What does this all mean?  The answer in the short term is “Not much.” 

 First, everyone needs to calm down a bit, once the UK activates article 50, the two-year negotiation process for the United Kingdom exit from the European Union will begin.  As part of the process, all of the trade deals and treaties that are automatically part of the European Union will be examined, and the United Kingdom and European countries will need to decide if those deals made individually with the UK are in their mutual interest, if they should be amended, or if they should be cancelled.  Since every trade and movement agreement is up for negotiation, very little may change, or a lot may change, but none of us will know until those negotiations are complete, and nothing will happen for a minimum of 24 months.  It is not my intention to share my personal feelings as to what I think the net result may be, positive or negative, simply to get across my central point which is nothing has happened yet, except a lot of people panicking over something that they do not yet understand.  This comment is not meant to disparage anyone, it is simply a statement of fact as no one knows what this means, at least not yet.  In my opinion, the best thing anyone can do is calm down, maintain their business as usual, and allow the process to play out.  

The first tangible impact we are likely to see as a result of this vote is workers from other EU countries finding the UK a less desirable place to work until it is known if they will be allowed to remain in the country, or move to and from there freely, after the exit is completed.  To be clear, this impact is not based on any real change to any of these agreements, simply a perceived change or uncertainty about what may happen, that can possibly have a real impact on labor markets. The net result of that would theoretically be a decrease in supply of labor, leading to an increase in labor costs for UK businesses.  Further complicating issues is the fact that the British Pound (GBP) has been weakening as a currency in the immediate aftermath of the vote.  It is likely that the pound will stabilize in the future, in my opinion, but the short-term impact will likely be diminished spending power for UK companies purchasing foreign goods and services.

With respect to security, all of these factors point to the fact that UK based companies, or companies with specific UK operations will likely need labor, and they will likely need to pay for it in British Pounds to mitigate the turbulence in the UK currency market.  Managed Services providers like InteliSecure, who have significant operations in the UK can offer an attractive alternative to permanent staffing or foreign outsourcing for UK Chief Information Officers between now and the time that the exit from the European Union is complete, and perhaps well beyond. 

It is understandable for people and organizations to react emotionally to the fact that a majority of United Kingdom’s residents have decided that they no longer want to be a part of the European Union.  In many ways, the UK and the EU are going through a divorce.  It may be a long, drawn out process filled with lawyers, agreements, disagreements, and change.  It is likely to be an emotional time with ups and downs, filled with uncertainty.  At times it will be amicable and at other times there may be emotional disruption.  There has already been a wave of political fallout in the United Kingdom as a result of the vote, and that fallout may continue in the coming weeks and months.  However, if we all calm down and take a deep breath, we can understand that while there may be drastic changes, minor changes, or no changes, the sun will still rise in the east and set in the west tomorrow.  We will all have the same basic needs as individuals and as organizations.  And our friends in the United Kingdom will shape their new reality and we will all adapt to it and overcome it.  There are only two possible outcomes, things will get better, or they won’t.

 Please share this post if you find it helpful.  We can all benefit from the free exchange of facts with respect to what has become a global panic over the unknown.