Implication of Brexit for Human Resource Management in company in UK
Introduction
In the UK companies, Human Resource Management (HRM) will play an important role in the Brexit journey. The immediate implications of on employees and business planning will have to be dealt with from the HRM perspective. Some the practical implications of Brexit will be managing people issues and implementing Brexit strategy. HRM will experience a range of implications when Brexit is fully implemented since the free movement of people throughout EU will not be enjoyed in the UK and thus it will be much harder for UK companies to transfer and hire foreign nationals (Brexit 2016). This will eventually negatively affect the UK companies as they will become less attractive due to limited access to the talented human resources. The ability of companies in the UK to manage people will ultimately be affected since the nation is a leading industrial nation in Europe. The UK has traditionally had a range of employment legislations in place for employee protection since the 1970s which has since being reinforced by the EU. As a result of this enforcement, workers in the UK companies has acquired major benefits that includes maximum 48 hours working week, more annual leave, protected 20-minute breaks, and a minimum of 11 hours between shifts (O’Reilly et al 2016). Most of the employee protection reinforced by the EU may be lost or softened as a result of Brexit.
Theory
HRM quality is measured by assessment of HRM practices that a company has put in place instead of how effective their implementation. The effectiveness of HRM is dependent of more than presence of good HRM practices and relies on the context and manner in which the practices are applied. The implementation of HRM is dependent on their design and practices. A major theory in HRM performance is the Ability-Motivation-Opportunity (AMO) theory which guides the choice of HRM practices to be applied (Bos-Nehles et al 2013). In context of Brexit, companies in UK can apply the AMO theory to absorb the effects and implications that may affect HRM as a result of the immigration regulations that are brought by Brexit. The HRM practices affects employee’s ability, opportunity and motivation to contribute to the performance of the company. HRM performance is measured using specific HRM outcomes, group or individual behavioral outcomes, and performance outcomes at the department or company level. Work performance theory defines performance as the behavior of accomplishment of expected, specified or formal roles as required of the company employee. According to AMO theory, ability is the prerequisite for occurrence of performance (Bos-Nehles et al 2013). Opportunity and motivation are effective when sufficient ability is ensured. Therefore, ability has a direct effect on job retention as measured through performance and opportunity and motivation only increases or decreases its effect.
Findings and discussion
The HR in the UK has a major role to play in assisting the company management and the workforce to get focused and energized on appropriate issues in Brexit implementation. The job market will be affected as foreign workers will move out along with their specific talents and skills. This will eventually affect the performance of the remaining workforce in the companies in a negative manner thus lowering production and affecting the whole economy. With regard to this, adequate communication will be essential to focus on future opportunities and allow employees table their anxieties. Most of the foreign employees even if they choose to remain will feel impacted by Brexit and they will be anxious of the expected increased value of the UK currency as result of reduced money flow. Motivation of the workforce will be necessary and it will be maintained if the UK companies will address issues such as the impact of volatility on incentive targets and bonus pools (Kaufman 2011). The flow of money will be a major impact of Brexit as most of the UK listed companies will take their remuneration back to the shareholders for approval and any consideration of incentive and bonus programs will have to come from the shareholders. It is apparent that the UK government will amend some of the EU-based legislation to provide more flexibility to employers which will eventually require companies in the UK to adjust their practices and policies. The UK companies will be required to check the citizenship and residency of their employees will at the same time trying to keep them motivated for effective performance. This will include encouraging those with special skills to apply for permanent residency and citizenship in a bid to safeguard their employment status. This measure will be necessary as in the long term ease of movement of existing employees and recruitment of EU nationals will be impacted negatively.
Conclusion
The human resource is the major asset that any company can have and its management ultimately affects performance and production in a company. The UK exit from the EU will eventually have major implications on HRM due to change of immigration regulations and individual company policies and practices. The AMO theory can be applied to ensure the effectiveness of company employees when Brexit is fully implemented as it will ensure ability that will keep the workforce motivated. HRM will play a major role in maintaining the job market in the UK by allowing proper communication channels with employees and processing the citizenship and residency of EU nationals.
Reference List
Bos-Nehles, A, Van Riemsdijk, M, & Kees Looise, J 2013, ‘Employee Perceptions of Line Management Performance: Applying the AMO Theory to Explain the Effectiveness of Line Managers’ HRM Implementation’, Human Resource Management, 52, 6, p. 861.
‘Brexit: the unintended consequences’ 2016, The International Economy, 2, p. 6,
Kaufman, B 2001,’The theory and practice of strategic HRM and participative management. Antecedents in early industrial relations’, Human Resource Management Review, 11,2001, p. 505 – 533.
Kaufman, B, & Miller, B 2011, ‘the firm’s choice of hrm practices: economics meets strategic human resource management’, ILR Review, 64, 3, p. 526.
O’Reilly, J, Froud, J, Johal, S, Williams, K, Warhurst, C, Morgan, G, Grey, C, Wood, G, Wright, M, Boyer, R, Frerichs, S, Sankari, S, Rona-Tas, A, & Le Galès, P 2016, ‘Brexit: understanding the socio-economic origins and consequences’, Social & Economic Revue, 14, 4, pp. 807-854.
