Survival Strategies for UK Startups Post-Brexit

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August 21, 2023
Tech News

Brexit has long been the talk and concern for UK startups and businesses in the past two years. As the UK approaches the October 31st deadline, PM Boris Johnson’s request to suspend the Parliament for up to five weeks has been approved by the Queen.

This move caused an uproar from the Parliament and even from Johnson’s own party mates as it was seen as an attempt to cut down the time MPs have to pass laws to stop a no-deal Brexit. The MP has already stopped this plan and even turned down Johnson’s call for a snap election.

Brexit raises concerns about hiring talent, trade, and data laws for UK startups. Many are still discussing the best courses of action for a ‘soft’ post-Brexit, but most are struggling to actually foresee what it may bring.

Regardless of what will happen when the UK leaves the EU, here’s what UK startups should start preparing for.

Invest in digital skills

Hiring talents from the EU will be one of the most difficult challenges for UK startups after Brexit.

According to the Founder of Tech London Advocates Russ Shaw, 20% of tech staff in London come from the EU. However, the first quarter of LinkedIn’s 2018 Recruiter Sentiment’ survey found that 44% of recruitment and HR professionals see that the UK might become less attractive to EU candidates because of Brexit.

To resolve further talent shortage in the UK, businesses should start to invest more in upskilling their current workforce through digital skills.

According to a study by Salesforce, 72% of UK consumers believe that businesses should step up to create a globally-competitive UK. In the same study, 64% of businesses believe that digital skills will become important for businesses after leaving the EU.

Upskilling will give more and better job opportunities for homegrown talents and, in turn, help the UK economy thrive post-Brexit.

Deputy CEO of TechUK Antony Walker said, “Two of the world’s greatest problem solvers are people and technology. Both are fundamental to creating a successful global Britain.”

He also added, “Regardless of the impact of Brexit on the economy, technology leaders must continue their efforts to close the skills gap and work with governments and industry to tackle productivity.”

Related Article: Top 5 In-demand Digital Skills in the UK

Consider hiring talents outside the EU

Reaping the benefits of training the current workforce will take time. While upskilling existing workers, it’s also a good option to look for candidates beyond the UK and the EU.

The Government already reassured UK businesses and EU nationals regarding the continuation of the immigration status of EU citizens. Even so, there are still risks due to cost and restrictions on the freedom of movement for both UK and EU professionals, creating a barrier between the two.

As a result, it’s a good short-term or long-term solution to hire top talents from overseas. In fact, 42% of UK companies actually look for talents abroad. Overseas talents can either be hired to work at your office location or remotely.

A mix of remote and in-house teams means that businesses will have teams across the globe and across time zones.

As firms and startups understand that they can’t achieve their desired growth in their local market alone, 90% of firms in the UK plan to strive to expand globally in the next five years. Aside from Europe, 30% of UK firms also look for talents in Asia.

Fortunately, hiring talents overseas is made easier with the countless recruitment firms or outsourcing agencies available.

 

Differentiate your business to secure funding

One of the most crippling questions for startups is whether or not there will still be continuous or available funding. An SVR survey reveals that UK startups are quite pessimistic about receiving future investments, with 44% of respondents believing that international investments will decline.

Despite this negative outlook, the UK is still a booming business hub for global investors. In fact, the UK tech sector will be receiving £1.2bn in investments.

While it seems that investors are still interested in funding UK startups, this does not mean that finding and getting funds will be easy.

Brexit can still limit British startups from receiving funds. One of the critical issues that startups could face is isolation from applying for funds. Another challenge would be the unclear trading laws once the UK has completely left the EU.

To get around this, businesses should be able to identify what their unique selling point is—what separates them from the countless startups today. According to a Forbes article, here are four ways to differentiate your business from competitors:

1. Find the gap - Look for the untapped market in your industry.

2. Tell new stories - Effectively communicate your brand to your customers.

3. Break into new niches - Make your product or service appeal to a new market.

4. Know your industry - Take time to research and understand your industry.

Keep in mind that the product or service that is more likely to succeed gets the funding. If UK startups can continue to prove their worth to investors, the UK business scene can still thrive after Brexit.

Explore new markets

After years of good trade and business relations with the EU, UK businesses must look for other countries or markets to trade or work with.

In fact, the US is already taking steps to partner with the UK as it recently offered the country a new trade agreement after Brexit.

Aside from this, the government has already made efforts to establish FinTech connections with India, China, Korea, and Singapore. This will make it easier for UK startups and scaleups to expand in Asia.

In a speech, former Chancellor of the Exchequer Philip Hammond said, "If the UK is going to make the most of the freedoms it will have after leaving the European Union, we have to build trade links with the fast-growing economies of Asia."

This also applies to blue-collar workers such as farmers. A recent report says that British farmers are already looking into exporting to North Africa.

As such, no matter which industry your startup is from, it is best to start looking for other markets to sell or work with to improve your chances of sustaining your business post-Brexit.

Create an effective data strategy

A 2017 Frontier Economics report found that 75% of the cross-border data flow is from the EU.   Since the UK government still has an unclear plan regarding the country’s data transfers between the EU, Member States, and the UK, it’s best that businesses, especially UK tech startups, prepare for an effective data strategy.

Consumers have a higher expectation than ever before. According to data by Salesforce, 76% of consumers expect businesses to understand their needs and expectations. Businesses can only achieve this by gathering and utilising data from their consumers.

If a no-deal Brexit happens, this would disrupt the flow of commercial data and would entail enormous costs for businesses, according to a study by the University College London.

To help you plan your data strategy, here are some information to keep in mind:

1. UK to EU data transfers will remain unaffected. According to the Government:
“In recognition of the unprecedented degree of alignment between the UK and EU’s data protection regimes, the UK would at the point of exit continue to allow the free flow of personal data from the UK to the EU.”


2. EU to UK data transfers must ensure compliance. The Government advises that organisations should work with their EU partners regarding data transfers between the EU and the UK. In addition:

“The Government is advising that for the majority of organisations the most relevant legal basis for such transfers would be Standard Contractual Clauses (SCCs). These EC-approved data protection clauses, often known as model clauses, need to be embedded within contracts (without any changes), or added as an appendix to an existing contract, which may need to be reviewed on this point to avoid ambiguity.”


3. The UK will not be part of the EU-US Privacy Shield. If your organisation relies on this agreement, you should revisit this as the UK will no longer be part of this pact after Brexit.

While there is still no clear plan from the government, the best action for organisations is to start preparing for future possibilities. Abide by existing legislation but anticipate possible changes in data and business processes.

Doing so will make you less vulnerable to the effects of Brexit.

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Cloud Employee is a fast-growing UK-managed offshore recruitment and staffing company in the Philippines. We tackle the growing global IT skills shortage by connecting tech companies based in Europe, the US, and Australia to our pool of expert software developers in the country.

We are now seeking passionate Lead Full-Stack PHP Developer to join our team of skilled talents. This is an excellent opportunity to join a fun and dynamic work environment and to significantly advance your career.

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Full stack RoR/VueJS Developer

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Fullstack Developer

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Fullstack .NET Developer

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

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Lead/Senior Frontend Developer (UI/UX) - Brazil

Cloud Employee is a UK-owned business established eight years ago. We connect high-performing software engineer talent worldwide with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines and Brazil as part of international engineering teams and grow their CV and skill-set.

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Marketing Specialists

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

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Backend Developer (Python)

Cloud Employee, is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineer teams and grow their CV and skill-set.

We pride ourselves on being supportive and cutting-edge work that continuously invests in staff development, engagement and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Senior/Team Lead Full-Stack PHP Developer

Cloud Employee is a fast-growing UK-managed offshore recruitment and staffing company in the Philippines. We tackle the growing global IT skills shortage by connecting tech companies based in Europe, the US, and Australia to our pool of expert software developers in the country.

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Senior Full-Stack PHP Developer

Cloud Employee is a UK-owned Philippines business established 8 years ago. We connect high-performing software engineer talent in the Philippines with some of the world’s leading and most innovative tech companies. Developers join to work from the Philippines as part of international engineering teams and grow their CV and skill-set.

We pride ourselves on being a supportive and cutting-edge workplace that continuously invests in staff development, engagement, and well-being. We provide security, and career paths, along with individual training programs and mentoring.

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Survival Strategies for UK Startups Post-Brexit

February 16, 2024

Brexit has long been the talk and concern for UK startups and businesses in the past two years. As the UK approaches the October 31st deadline, PM Boris Johnson’s request to suspend the Parliament for up to five weeks has been approved by the Queen.

This move caused an uproar from the Parliament and even from Johnson’s own party mates as it was seen as an attempt to cut down the time MPs have to pass laws to stop a no-deal Brexit. The MP has already stopped this plan and even turned down Johnson’s call for a snap election.

Brexit raises concerns about hiring talent, trade, and data laws for UK startups. Many are still discussing the best courses of action for a ‘soft’ post-Brexit, but most are struggling to actually foresee what it may bring.

Regardless of what will happen when the UK leaves the EU, here’s what UK startups should start preparing for.

Invest in digital skills

Hiring talents from the EU will be one of the most difficult challenges for UK startups after Brexit.

According to the Founder of Tech London Advocates Russ Shaw, 20% of tech staff in London come from the EU. However, the first quarter of LinkedIn’s 2018 Recruiter Sentiment’ survey found that 44% of recruitment and HR professionals see that the UK might become less attractive to EU candidates because of Brexit.

To resolve further talent shortage in the UK, businesses should start to invest more in upskilling their current workforce through digital skills.

According to a study by Salesforce, 72% of UK consumers believe that businesses should step up to create a globally-competitive UK. In the same study, 64% of businesses believe that digital skills will become important for businesses after leaving the EU.

Upskilling will give more and better job opportunities for homegrown talents and, in turn, help the UK economy thrive post-Brexit.

Deputy CEO of TechUK Antony Walker said, “Two of the world’s greatest problem solvers are people and technology. Both are fundamental to creating a successful global Britain.”

He also added, “Regardless of the impact of Brexit on the economy, technology leaders must continue their efforts to close the skills gap and work with governments and industry to tackle productivity.”

Related Article: Top 5 In-demand Digital Skills in the UK

Consider hiring talents outside the EU

Reaping the benefits of training the current workforce will take time. While upskilling existing workers, it’s also a good option to look for candidates beyond the UK and the EU.

The Government already reassured UK businesses and EU nationals regarding the continuation of the immigration status of EU citizens. Even so, there are still risks due to cost and restrictions on the freedom of movement for both UK and EU professionals, creating a barrier between the two.

As a result, it’s a good short-term or long-term solution to hire top talents from overseas. In fact, 42% of UK companies actually look for talents abroad. Overseas talents can either be hired to work at your office location or remotely.

A mix of remote and in-house teams means that businesses will have teams across the globe and across time zones.

As firms and startups understand that they can’t achieve their desired growth in their local market alone, 90% of firms in the UK plan to strive to expand globally in the next five years. Aside from Europe, 30% of UK firms also look for talents in Asia.

Fortunately, hiring talents overseas is made easier with the countless recruitment firms or outsourcing agencies available.

 

Differentiate your business to secure funding

One of the most crippling questions for startups is whether or not there will still be continuous or available funding. An SVR survey reveals that UK startups are quite pessimistic about receiving future investments, with 44% of respondents believing that international investments will decline.

Despite this negative outlook, the UK is still a booming business hub for global investors. In fact, the UK tech sector will be receiving £1.2bn in investments.

While it seems that investors are still interested in funding UK startups, this does not mean that finding and getting funds will be easy.

Brexit can still limit British startups from receiving funds. One of the critical issues that startups could face is isolation from applying for funds. Another challenge would be the unclear trading laws once the UK has completely left the EU.

To get around this, businesses should be able to identify what their unique selling point is—what separates them from the countless startups today. According to a Forbes article, here are four ways to differentiate your business from competitors:

1. Find the gap - Look for the untapped market in your industry.

2. Tell new stories - Effectively communicate your brand to your customers.

3. Break into new niches - Make your product or service appeal to a new market.

4. Know your industry - Take time to research and understand your industry.

Keep in mind that the product or service that is more likely to succeed gets the funding. If UK startups can continue to prove their worth to investors, the UK business scene can still thrive after Brexit.

Explore new markets

After years of good trade and business relations with the EU, UK businesses must look for other countries or markets to trade or work with.

In fact, the US is already taking steps to partner with the UK as it recently offered the country a new trade agreement after Brexit.

Aside from this, the government has already made efforts to establish FinTech connections with India, China, Korea, and Singapore. This will make it easier for UK startups and scaleups to expand in Asia.

In a speech, former Chancellor of the Exchequer Philip Hammond said, "If the UK is going to make the most of the freedoms it will have after leaving the European Union, we have to build trade links with the fast-growing economies of Asia."

This also applies to blue-collar workers such as farmers. A recent report says that British farmers are already looking into exporting to North Africa.

As such, no matter which industry your startup is from, it is best to start looking for other markets to sell or work with to improve your chances of sustaining your business post-Brexit.

Create an effective data strategy

A 2017 Frontier Economics report found that 75% of the cross-border data flow is from the EU.   Since the UK government still has an unclear plan regarding the country’s data transfers between the EU, Member States, and the UK, it’s best that businesses, especially UK tech startups, prepare for an effective data strategy.

Consumers have a higher expectation than ever before. According to data by Salesforce, 76% of consumers expect businesses to understand their needs and expectations. Businesses can only achieve this by gathering and utilising data from their consumers.

If a no-deal Brexit happens, this would disrupt the flow of commercial data and would entail enormous costs for businesses, according to a study by the University College London.

To help you plan your data strategy, here are some information to keep in mind:

1. UK to EU data transfers will remain unaffected. According to the Government:
“In recognition of the unprecedented degree of alignment between the UK and EU’s data protection regimes, the UK would at the point of exit continue to allow the free flow of personal data from the UK to the EU.”


2. EU to UK data transfers must ensure compliance. The Government advises that organisations should work with their EU partners regarding data transfers between the EU and the UK. In addition:

“The Government is advising that for the majority of organisations the most relevant legal basis for such transfers would be Standard Contractual Clauses (SCCs). These EC-approved data protection clauses, often known as model clauses, need to be embedded within contracts (without any changes), or added as an appendix to an existing contract, which may need to be reviewed on this point to avoid ambiguity.”


3. The UK will not be part of the EU-US Privacy Shield. If your organisation relies on this agreement, you should revisit this as the UK will no longer be part of this pact after Brexit.

While there is still no clear plan from the government, the best action for organisations is to start preparing for future possibilities. Abide by existing legislation but anticipate possible changes in data and business processes.

Doing so will make you less vulnerable to the effects of Brexit.

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