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What Brexit means for IT businesses

Tamlin Magee | March 15, 2016
Brexit means data headaches and business uncertainty, say IT pros and lawyers

With only 100 days left until the 23 June, when the UK will vote on whether to leave or stay in the European Union, there's not a consensus from the IT sector - but there are certainly concerns and considerations for an industry that's so inherently international.

eu flag flickr creative commons
Image: Flickr Creative Commons / fdecomite

Tech industry group TechUK's members are overwhelmingly in favour of staying - at 70 percent of those surveyed. Industry group for the capital's tech sector, Tech London Advocates, agrees, while the majority of the IT vendors we've asked are declining to comment.

The CMO of data analytics company Relative Insight, Rich Wilson, says businesses would have to be "bonkers" to want a Brexit. 

Finding staff is tough enough, Wilson says, as businesses have to compete with all the startups going, along with the hiring might of Britain's finance sector.

"I know quite a few startups that are increasingly concerned about the impact Brexit would have on their existing team, including their founders," Wilson adds. "These are firms with people from around Europe who would have to leave the country in the event of the UK exiting Europe."

"In the worst case scenario we could see entire firms leaving."

Quocirca's chief analyst Clive Longbottom believes that anti-immigration noise from government has already perturbed some businesses.

Depending on the terms of negotiation following a Brexit, there could be further complications with hiring people across Europe who have specific, desired IT skills.

And besides, what will happen to the workers who are already here?

Longbottom says: "Visas may be required, more checks as to capability to work in the UK, does the person meet the points number set by the government to migrate here, and what happens to the person's family?

"If you outsource, then the outsourcing companies will either have to jump through all those hoops as well, and so up their costs to you, or do remote outsourcing where the skills stay in-country and operate from there.

"This is not a good situation as many issues require on-site access - an outsourced approach may need to have a thick Brit on-site being talked through a set of actions by the intelligent Pole in Poland."

Any anti-European sentiment that is whipped up could have far-reaching consequences for day-to-day operations at the coal-face of IT.

Longbottom warns that government could find itself with the burden of having to train up an emerging workforce in the kind of IT skills that are already contributing to the supposed skills gap in the country.

"The government would have to step up to the mark and train more people in the relevant IT skills," he explains. "But, as this would take years to come up with anything, UK PLC would be impacted pretty badly at the IT operations level."


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