Businesses less prepared for Brexit than in early 2018

Previous research commissioned by Pinsent Masons, the law firm behind Out-Law.com, found in February that 58% of business leaders felt their business was "very well prepared" for Brexit, and a further 36% said their company was "quite well prepared".

However, Pinsent Masons commissioned a follow up survey of business leaders which took place in September. That survey, of 100 C-Suite executives from FTSE 100, 250 and private unlisted companies, found that just 14% of business leaders now believe their business is very well prepared for Brexit, with a further 65% of the view their company is quite well prepared. The results of the latest survey have been published in a new report.

The reported loss in confidence over preparedness coincides with other results from the September survey which found that 72% of general counsel have now "reported significant Brexit related risks to their boards", compared to just 40% who had done so in February.

The latest survey, carried out by YouGov, also revealed an upturn in the number of businesses that have convened detailed Brexit scenario workshops to assess Brexit risk with business function leads, such as HR, commercial and tax directors at their company. Just 14% of the September respondents said no such scenario planning has taken place at their employer, compared to 29% in February.

The Pinsent Masons report contained details of the steps businesses can still take to assess the risks they face from Brexit.

"As a minimum, undertake assessments of the impact of key areas of risk on your business, including: customs duties & tariffs, supply chain disruption, labour shortages, restrictions on transfers of customer data, risk exposure in contracts, the impact of changes in regulation and the impact of changes to UK legislation under the Withdrawal Act," the report said. "Consider whether establishing a base or subsidiary in the EU is necessary for your business."

So far, a third of businesses have completed such a detailed assessment and had the results shared with the board. By the end of the year, 85% of respondents said they expect to have done the same.

The September survey also found that at least 89% of businesses have drawn up contingency plans for a ‘no deal’ scenario, and that 73% of companies will have triggered their contingency plans by the end of the year – 32% have already done so.

For almost half of businesses represented in the survey (47%), triggering 'no deal' contingency plans will mean moving job roles out of the UK.

However, the latest survey found that 36% of business leaders now anticipate that Brexit will have a "somewhat positive" impact on their business in the short term, compared with just 3% of respondents who said they felt that way or that Brexit would have a "strong positive impact", in February. In addition, 41% of business leaders now expect to move from EU27-based suppliers to UK-based suppliers as a result of Brexit.

Brexit specialist Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said: "The picture that emerges from this research is more upbeat and more urgent than our previous report. Businesses are responding to Brexit by taking a number of key steps to help them prepare for the future, whatever the outcome of the negotiations."