The vast majority of our fast-growing respondents are worried about Brexit. Yet, only a handful are well-prepared for the outcome
The UK’s pending departure from the EU is widely seen as a negative by the fast-growing companies in this research, with 72% warning Brexit is likely to have a negative impact on their growth; this rises to 82% amongst financial services firms. UK and Ireland-based businesses are even gloomier – 85% expect the exit from the EU to have a negative impact. Just 1% overall look forward to a positive impact.
This is not just an issue for UK businesses. “Europe, which was our biggest market, is likely to shift its focus away from UK companies,” warns the Head of Technology at a British insurance company, while the Chief Data Officer of a payments business in the Netherlands adds: “The UK moving away from the EU and the addition of trade barriers will increase the cost of managing clients in the UK, which will reduce profit.”
Despite such fears, however, relatively few businesses have made significant progress with their planning for Brexit. Just 18% of respondents describe themselves as in an advanced state of planning, and this rises to 30% for those based in the UK and Ireland. A further 20% have not even begun preparations.
In part, this must reflect the continuing uncertainty over what the post-Brexit landscape will look like, with negotiations between the UK and the EU set to go down to the wire. In the infrastructure sector, which needs long-term certainty in order to plan and invest, 29% of respondents have made no plans at all.
“In the current climate, businesses making structural changes that are both expensive and difficult to implement or reverse need to ensure that they understand all the relevant risks,” says Pinsent Masons’ Brexit lead Guy Lougher. “We recommend that businesses enhance their risk assessments before undertaking major change. Being aware of the potential impact of Brexit on things like the movement of goods and services, employee retention, supply chain stability and data flows means that you’re making these changes with your eyes open.”