What could Brexit mean for Independent Consultants?
On 23rd June 2016, the UK voted to leave the EU. In March 2017, Article 50, the official mechanism that allows a country to leave the EU, was triggered. By March 2019 our negotiated deal (for example around trade and the customs union) will have been ratified and the UK will leave the EU. Then there will be a transition period to ensure a smooth transition to implementation. This will be up to 31st December 2020.
There are many uncertainties about the impact of “Brexit” on UK businesses. Much will be dependent on the outcome of negotiations with the remainder of the EU.
The burning question for Independent Consultants will be, “so what will Brexit mean for me?” I think the best way to answer this is to consider 2 phases, the short term (next 1 to 2 years) and the longer term (during the transition period and beyond).
In the short term, the uncertainty caused by Brexit is leading to caution in UK businesses; but “freelancers” tend to do well in uncertain market conditions as they did after the global recession in 2008.
Here are 3 areas which may benefit Independent Consultants in the short term.
- There is likely to be an uplift in the costs of trading with EU companies following any Brexit deal. Therefore, UK businesses may be reluctant to hire permanent staff when their future cost base is unclear. This is an opportunity for Independents to support businesses in their operational improvements.
- UK businesses are looking to consulting firms to advise them on Brexit related projects. For example, what could be the impact on supply chains given different outcomes? What could be the implications for regulatory approvals in the EU? This work that would traditionally be the domain of the larger consulting firms may well shift to the quality mid-sized consultancies as a more cost-effective option. These mid-sized firms employ a high % of Associates, so this represents an opportunity for Independent Consultants with the right skillset.
- Whilst some traditional consulting projects may be put on hold because of all the uncertainty, business critical programmes e.g. major systems changes, digitisation, online and mobile will need to continue. Again, companies will be looking for the most cost-effective support option. If these are areas of your expertise then of course this will present an opportunity for you, either as a solo consultant or as an Associate.
So, in the short term I see some good news for Independent Consultants.
In the longer term, the impact on Independent Consulting will depend largely on the outcome of our negotiations with the EU. Your guess is as good as mine on this at the moment!
However, here are some of the key questions that we, as Independents, will need answers to.
- we be able to continue working in other EU countries with little or no restriction or will we require a work permit or visa to operate there?
- our Professional UK qualifications continue to be recognised across the EU?
- EU freelancers be able to continue working in the UK as now? If not could this lead to more opportunities for UK Independent Consultants;
- trade barriers and tariffs be introduced, driving up costs and complexity of doing business with EU clients?
- our overall cost of doing business as Independents stay the same or increase?
Time will tell.
What is my advice to Independent Consultants now with regards to next steps?
- If you are an SME in any business area that is likely to be impacted by Brexit, then look for any direct opportunities with UK companies. There will be interest in modelling business scenarios given different negotiated outcomes;
- Build your UK client base as much as you can now. If we leave the single market it will probably be more difficult for you to work in the EU;
- If you do have clients in the EU be realistic about the implications of continuing to operate there. Discuss it with your EU based clients.
- Focus some time over the next year on following the EU negotiations and what the outcome could be. Understand how it could impact you and your clients;
- Accelerate building your consulting capabilities. In what is likely to become a fiercely competitive market it is important for you to stand out from the crowd.
To learn more about how to develop your consulting capabilities have a look at our online learning programmes for Independent Consultants. Click here to find out.