Post-referendum uncertainty demands a focus on employee engagement

Blog posts

30 Aug 2016

Stephen Bevan, Head of HR Research Development

Follow @stephenbevan

The decision to leave the EU as a result of the referendum back in June very quickly led to considerable political and financial upheaval. A new prime minister, debate over the timing and tactics of triggering Article 50, uncertainty in the currency and equity markets, and a further cut in interest rates have all contributed to a feeling that we are living through a period with no clear route map.

Among employers this uncertainty has given rise to a number of unprecedented challenges to which the answers may be a long time coming. Some are familiar and others are complete unknowns. If the growth rate of GDP drops – it was recently forecast by the Bank of England to fall dramatically – then the consequent fall in demand in the wider economy may well lead to lower confidence about recruitment. Indeed, recent surveys suggest that this is already starting to happen. But this is, at least, a familiar phenomenon for employers although difficult and uncertain for some employees.

It is the completely unknown consequences of ‘Brexit’ for employers which are causing the most corrosive underlying challenges, the most nervous speculation among HR professionals and the most confused shrugging of shoulders by analysts and, dare I say, experts. Everyone knows that decisions made in the run-up to, and in the aftermath of, the invoking of Article 50 will have far-reaching consequences for the state of the economy, UK trade policy, migration rules and perhaps some aspects of employment regulation. But in the meantime the day-to-day imperative is to work out how to keep employees informed and engaged and with their attention focused on customers, on hitting performance targets and on collaborating with each other.

Immediately after the referendum result there was a lot being written about the importance of internal communication to help employees stay informed and to calm their nerves in the face of waves of breathy journalistic speculation. The problem has been, what to tell them? One Group HR Director I spoke to immediately after the vote said that his company’s message to employees was simple – ‘keep working and be nice to each other’. This was prompted by reports that the often polarised debates which characterised the referendum campaign had spilled over into some workplaces with some cases of ‘cultural bullying’ and recriminations being reported. In just recent days there have been cases of legal action being considered against some employers by workers who feel they are suffering discrimination or harassment for their ‘philosophical beliefs’. Even during fractious general election campaigns this kind of tension is unheard of and so many employers have, for the first time, had to monitor the post-referendum ‘fall-out’ and its consequences for harmonious working. It could be argued, of course, that some of those organisations whose senior executives publicly expressed a view about Brexit before the vote may have contributed to a sense of nervousness about the outcome of the vote or even exacerbated existing divisions in the workplace.

The bottom line is that uncertainty in the economy and in the world of work means that important decisions get postponed, investment gets delayed and a big ‘pause button’ gets pressed on so many of the things which allow employees to plan their lives, their finances and their commitments outside work. At the very least this uncertainty can have a destabilising influence at the very time that UK businesses – and UK plc – need the workforce to be focused, energised and engaged. So, if more employees are going to feel uncertain about job security as a result of the Brexit vote, the ‘employee engagement’ challenge that the UK has always faced relative to other countries will intensify. This could mean a dangerous, self-fulfilling downward spiral which might further undermine aspects of UK productivity just when we need it to be robust.

David McLeod, one of the founders of the Engage for Success movement has recently argued that, in the face of the Brexit vote and the consequent uncertainty, ’we’re going to need more agile and engaged employees who deliver more innovation, more customer service, more efficient ways to do business.’ Indeed IES research suggests that line managers play an essential role in maintaining engagement during periods of uncertainty and change – even if they themselves struggle to see the whole picture.

For specific groups of employees - especially those from other EU Member States working in the UK - the uncertainty may continue for several more months, if not years. For example, other recent IES research looking at the NHS’s reliance on nurses from other EU Member States suggests that some parts of the NHS may be vulnerable to changes in the employment or citizenship status of EU workers depending on the future of ‘free movement’. Of course the consequences may be significant for both the EU workers themselves and their UK colleagues who are also feeling the uncertainty as demand for NHS resources increases.

So the whole employee engagement ‘landscape’ in the UK just got a lot more complicated, and not in an especially good way. Employees perform best when their leaders can give them clarity and certainty about the future and an animating purpose relating to both their organisation and their job from which they can derive meaning. Yet discretionary effort is hard for employees to give wholeheartedly and with energy when ambiguity is all managers can offer. Hard though it will be, managers across the UK need to redouble their efforts to nurture, maintain and grow levels of engagement among employees who currently have more questions than answers.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.