A new public study of the bulge bracket banks, the top four consultancies, leading insurers and numerous private equity funds has revealed in comprehensive detail the nervousness in the city surrounding Britain’s exit from the European Union.
The latest information published by Reuters suggests that around 10,000 finance jobs could be forced to leave the UK with Frankfurt by far the most popular relocation destination and Paris a close second. A significant number of jobs could be shifted to the continent or further afield in the next few years if the UK is denied access to the single market. Reuters surveyed 123 firms including some of the top institutions in the capital about their detailed plans for a “hard” Brexit.
Canvassing was conducted during August and September, shortly after companies were required to submit detailed plans on their specific Brexit preparations to the Bank of England by the July 14th deadline. Worryingly, fifty percent of the companies surveyed told interviewers they would be forced to move staff overseas or undertake some form of restructuring due to Brexit, which is due to take place in March 2019. Another thirty percent claimed Brexit would have little operational impact, whilst the remainder where either undecided or declined to comment. Around 1.1 million people are employed in Britain’s financial sector with millions more engaged in subsidiary business lines such as recruitment.
At the World Economic Forum in Davos this January, UBS Chairman Axel Weber said that about 1,000 of the Swiss bank’s 5,000 employees in London could be affected by Brexit, and HSBC chief executive Stuart Gulliver said his bank will relocate staff responsible for generating around a fifth of its UK-based trading revenue to Paris.
Goldman Sachs’ Europe chief executive, Richard Gnodde, said in March that the US bank would relocate hundreds of staff out of London even before any Brexit deal is struck, as part of its contingency plans. The company currently employs around 6,000 people in London.
But it’s not all doom and gloom. The findings actually suggest that any potential job migration may be at the lower end of initial estimates by industry experts. London’s future as Europe’s premier financial hub is one of the biggest issues in Brexit talks largely because the sector is the UK’s biggest source of corporate tax revenue and will be high on the agenda when trade talks eventually kick off in the new year.
What does this mean for the wider recruitment industry and specifically Dartmouth? Whilst there is a huge amount of scaremongering, at this early stage shifting jobs to continental Europe remains only a contingency plan. If an advantageous soft Brexit can be agreed, top institutions in London will still be a huge draw for the best talent in the market. What remains far more blurred is the question of access to Europe’s top talent and how attractive a proposition the city will remain in the longer term.
Recruitment remains an accurate thermometer of the economy. Many Investment Banks, Private Equity firms and Hedge Funds have seen unparalleled levels of investment this year and whilst the market remains hot we can begin to see a thawing of initially bleak post-Brexit predictions. As a company, we must be positive but mindful of the changing economic landscape and continue to listen to our client’s needs. Only then can we begin to change the game, and Dartmouth can continue to lead the market in providing human capital solutions both in the UK and Europe.
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