EU Brexit Impact
An interesting update to Source Global Research’s survey, assessing the (updated) impact of Brexit in November 2016. The talks of Brexit are becoming slightly tedious, but it is very interesting to see the Consultancy industry’s impacts and how they are seeking to deal with the unknown changes in the first few months post-vote.
After much debate over the past few months about the future of Britain without the EU, and as an already constantly changing market, especially with regards to the Financial Services, both fact and opinion for media, government and industry specialists’ views on Brexit regularly fluctuate between negative and positive.
Following the MCA’s findings on the impact of the UK’s decision to leave the EU in their first quarterly survey in early October, the impact on the Consultancy industry is shown to have already faced negative impacts since the UK voted for Brexit in June. The findings suggest that 11% of consultancy firms have already recorded a negative effect, a further 50% have noted negative effects from their clients, and 70% state negative effects primarily on the financial services.
So, 5 months after Brexit, what has really changed? It seems that uncertainty and future plans are the main concern for organisations, especially when it is still extremely unclear about how Brexit is to be implemented, which could be the deciding factors of the future in the UK and the Consulting market.
Negative impacts have mainly been due to delays in projects or investment, with research from Centre for Economics and Business Research and Hitachi Capital U.K, finding that companies in the UK have cancelled (or delayed) investments worth £65.5 billion pounds since the Brexit vote. With the limited project pipelines, instead more effort has been focused towards growth strategies and contingency plans. Conversely, 70% of respondents say that business confidence is negatively affected, and 48% having concerns over job security.
With the value of the GBP rapidly changing, and through some rather jeopardising conversations within the Financial Services of companies, particularly banks, are seeking to move operations abroad, the belief many had initially that ‘nothing will change’ has decreased by 23% between June and November.
It is often hard to distinguish between scaremongering and fact, but the Consultancy industry seems cautious, yes, but also somewhat hopeful. Amidst the plight, 70% believe that consulting use is to actually increase, or simply be unaffected though this does depend on the particular industries involved and the method of leave. The findings represent a rather torn belief of Brexit and the opportunities that it could provide (or destroy), but there have notably been changes in the 5 months since the previous survey.
The consultancy market in particular could certainly benefit from Brexit and provide massive opportunities for consultants. The Financial Times reports that it has already seen companies call on consultants to assist the imposing changes, for example, within digitalisation in the banking industry and supply chain management, consultants becoming roles of ‘Brexit specialists’, and consultants assisting the analysis of potential impacts.
It seems that it is mainly uncertainty causing the changes when much is unknown at this stage. Organisations must be prepared and adapt their practices to stay competitive and ahead of impending industry shake-ups.