European Union Flag
Discuss – What are the real effects of Brexit for you?

UK supply chains – what you need to know

While COVID-19 is definitely the biggest concern for businesses over the last 18 months, our Procurement and Supply Chain project teams have carefully monitored the effects of Brexit.

Pre-Brexit the EU accounted for approximately half of all imports and exports, playing a critical role in supply chains for finished goods and intermediary products. Since the start of the year, 61% of firms have reported that Brexit has caused them difficulties, with more than a third specifically highlighting delays or additional costs. The Centre for Economic Performance report highlights these challenges (read more).

What problems has Brexit really caused your supply chains?

Increased Costs

The Brexit deal the UK reached with the EU has meant that tariffs were mainly avoided on goods themselves, however the additional paperwork or customs brokers costs have led to an inevitable increase in operational and administrative costs.

For trades to be tariff-free they now need to meet the ‘rules of origin’ requirements, ensuring goods coming from within the EU or in reverse the UK meet these rules.

While each additional cost per trade may be relatively small, this can obviously have a big impact over time especially for SME businesses, or those operating on thin margins who may have to pass these costs on to their end consumers.

Extended Timelines

Additional paperwork and border checks on both sides have led to delays and increased lead times for supply chains involving both imports and exports. While many firms have learnt to factor this into their production timelines over the last 12 months, this has caused significant issues for manufacturers who rely on “just-in-time” supply chains and those dealing with perishables like food that can lose quality while sat at the border.

These delays and lead times can have an impact on the bottom line as customers find companies with faster turnarounds, or those suppliers in the specialist food supply chains who can provide fresher produce.

How to manage these challenges?

Assess your supply chain

To avoid tariffs at the border, you need to carefully assess your suppliers and ensure they have full transparency over the origin of their products and parts. This will allow you to identify and plan for any delays from your suppliers that could impact your business – even if your suppliers are local, their suppliers could be based in Europe, India, China or other lower cost global supply chains.

Assessing and optimising your full supply chain will be one of the best ways to mitigate the risks and problems associated with the Brexit deal.

Improve the people behind your supply chain

You need the right leaders and managers behind your supply chain to be able to capably and confidently handle the changes and obstacles posed by Brexit. As specialist recruiters for procurement and supply chain roles, ProSearch are skilled in assessing, training and recruiting the talent needed to make your business successful.

The same diligence is essential when introducing new suppliers. While for some, the logical option to avoid Brexit supply chain problems will be to simply change from EU suppliers to UK ones, there is no guarantee that these companies will provide the same value and quality that your business needs, if they are supported themselves by international suppliers.

Obtain additional supply chain support

With the extra complications that Brexit has thrown into the world of procurement and supply chain challenges, you may find your business is in need of temporary, project-based or on-demand support. With a vast amount of supply chain consulting expertise, we can help you by providing interim supply chain staff, on-demand procurement resources or supply chain consultancy.

The pandemic has given businesses a larger obstacle to handle but as we return to normality, we need to acknowledge the impact Brexit has had on our supply chains and take steps to manage them effectively for the long-term success of our businesses and the UK economy.

Have you seen problems with your supply chain since Brexit? Let us help you solve them.

Get in touch with one of our advisors to discuss how we can help you and your business. We partner with organisations in a transparent and open approach to ensure they have all the external market knowledge and information needed to make the right hiring decisions for their supply chain.

Brexit News

Post-Brexit, employment law is changing. We explore the implications for employers and EU citizen employees.

recent poll canvassed the views of organisations – both UK and internationally to gauge how they believe they will be impacted by Brexit, also the extent to which they have put plans in place to mitigate the risks of trading post-Brexit.

The concern is that only 20% said they have a good understanding of the risks of not being prepared and have put mitigations in place. However, the implications for businesses who employ EU citizens are potentially serious with the risk of fines if they are found to be employing people illegally.

It’s essential that businesses who already employ EU citizens (or plan to do so) following the transition period, are aware of their responsibilities and the new legislation announced by the Home Office in their Statement of Changes to the Immigration Rules.

Brexit and employment law

The end of the Brexit transition period and the introduction of restrictions to the free movement for European nationals in the UK takes place at 11 PM on the 31st December 2020.

From the 1st January 2021, there will be a new points-based immigration system. EU citizens arriving in the UK from 1 January will need to comply with the same visa requirements as other non-UK citizens.

The government has advised that in many cases, UK employers will need to sponsor European citizens and this means many businesses will be required to apply for a sponsor license. Given the high number of businesses which rely on EU citizens, the government is recommending that applications for licenses are submitted as soon as possible.

Increased recruitment and employee retention costs

The new rules are likely to have an impact on businesses’ recruitment overheads as it costs thousands of pounds to sponsor an individual for five years. At a time when so many small businesses are under pressure to reduce overheads, these additional costs are a particularly unwelcome burden.

There will be civil penalties of up to £20,000 for employers who do not follow the correct procedures and fail to carry out the correct right to work checks, where it is later discovered that an individual is working in the UK illegally.

Rules for existing employees from the EU

Employers who already employ EU citizens should encourage them to apply for settled or pre-settled status, if they have not already done so. European citizens already in the UK before the end of the transition period have a grace period until 30th June 2021 to apply under the settlement scheme.

There are also different schemes for some workers – for example, there is the Global Talent, Innovator and Start-Up visa. The government says this is designed to attract “those who have an exceptional talent or show exceptional promise in the fields of engineering, science, tech or culture”.

The Home Office have created an EU Settlement Scheme toolkit to help employers support EU citizens apply to stay in the UK. This includes various resources, including:

  • Template letters to EU citizen staff
  • Factsheets, leaflets and posters
  • Social media content and videos
  • Presentations
  • Translated materials

Employing new EU citizens – the points system explained

To qualify for a visa, migrant workers who want to move to the UK will have to qualify for 70 points. Having a job offer from an approved employer for a skilled job will earn 40 points. Being able to speak English will give another 10 points. The applicant can achieve the remaining 20 points if they are due to be paid at least £25,600 a year.

They can also gain extra points for having better qualifications (10 points for a relevant PhD, or 20 points for a PhD in science, technology, engineering or maths) or an offer of a job in which the UK has a shortage (20 points), even if it doesn’t pay as much money.

Subscribe below for latest news updates

* indicates required

Please select all the ways you would like to hear from Procura Consulting:

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit our website.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.

Call Now Button