With the decline of the EU economy many businesses, not just British ones, are looking elsewhere for opportunities. The emerging markets of Asia, South America and China are looking increasingly attractive, particularly to companies relying on exports. Britain has been trying to do business with these markets for some time now and headway is being made, although not as much as the government hoped. These markets are emerging more slowly than expected and there are a number of factors slowing engagement, one of which is Britain’s strategic and security concerns about China.
Countries like Germany are looking elsewhere as well. Hans Kundnani’s analysis of German economic ambitions in last month’s Foreign Affairs described an active interest in doing business with Russia (despite the sanctions imposed over Ukraine which are unpopular amongst the German people) and China (the biggest market for Volkswagen and the Mercedes S-Class).
So now that Britain faces greater competition over its extra-EU economic engagement, what needs to be done to make Britain the partner of choice in the international market?
Britain can retain its world-class financial service sector and weather the distrust caused by the 2008/09 crisis if it can offer at least the equivalent or better than its competitors – Frankfurt and Singapore. It needs to recruit and retain effective and trustworthy employees. The astronomical bonuses earned by some city employees who have followed inappropriate practices have justifiably been criticised. It’s not the concept of a bonus per se that’s bad. It is more the way they are put into practice that needs to change. They need to be truly performance-related, the work practices used must be appropriate and legal and bonuses must be linked to the direction the organisation wants to follow. There must be stringent checks and balances in place. If the reward is positioned correctly but clearly has to be earned, it is more likely to attract the best candidates and weed out the no-hopers early on. Even discretionary bonuses have to follow a set of criteria – that was determined in a number of tribunal cases during the financial crisis – but can still be very effective.
Although predominantly still a service sector economy, Britain does do quite a lot of specialist engineering and manufacturing. One of its strengths is specialist engineering and luxury exports. Jaguar Land Rover is owned by an Indian company, but it’s in British factories where the magic happens. The same goes for Formula 1 and a host of other vehicles and engines.
To retain its place in the world economy, British companies need access a high quality workforce. That’s not easy. Despite a high number of unemployed young people, employers complain they can’t get the right candidates for their roles. The solution proposed by UKIP’s Nigel Farage which has caused such a storm on all sides of the political divide this week is to give priority to British workers, just because they’re British. Coupled with that is Farage’s bizarre view that we don’t need much in the way of anti-discrimination laws in the workplace because it’s all pretty much history now. It shows how very little he knows about the British workplace on both counts. Many employers would love to employ British workers – if only they could get suitably skilled people to turn up. Having done a considerable amount of recruitment in recent months, not just for my own business but for a number of clients the quality of so many candidates continues to disappoint. Some of the roles were at fairly high levels and commensurate salaries, so these comments are not confined to low skilled NMW level jobs.
Writing in The Guardian on 12th March and referring to Farage’s comments, Gaby Hinscliff wryly observed: “Were employers given a legal right to discriminate freely on grounds of nationality, the awkward thing is that we might discover some are already doing so; it’s just that the nationality they want to favour isn’t British.”
The UK does need to ensure we have a great pipeline of talent within the country, especially in the less popular subjects like science, technology, engineering and math. It’s encouraging to see that action is gradually being taken in the form of STEM colleges. Many are making real efforts to build relationships with local businesses to ensure students are more realistic about workplace expectations. In particular a new STEM university in Herefordshire is partnering with businesses to create ‘work ready graduates’. In liaising with local colleges, there is a key role for businesses to play to help shape the workforce of the future. And in doing so, they can not only gain access to the personnel they want, but also promote themselves as desirable recruiters.
As Britain expands its business opportunities beyond the EU, there will undoubtedly be a period of acclimatisation – both for companies and the government – but a great many possibilities are up for the taking. HR will need to keep up with this change and adapt its methods to maximise its effect.
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