A new report says that one in three financial services companies in Britain is considering or has confirmed plans to relocate some operations abroad as a result of Brexit.
The survey by EY suggests that 36% of firms in the sector are deliberating and, in some cases, have finalised plans to move to an EU member state.
The EY report comes barely a week after the FT claimed that some of the largest US banks had drawn up proposals to move thousands of their people to European cities including Paris, Dublin and Frankfurt during the first quarter of 2019.
They are reported to have told staff that they will pay the cost of “commuting” between London and their new place of work for a short period of time only, leaving bankers with the decision to make as to whether to keep their families in London or relocate fully.
The two reports reinforce Armstrong Craven’s own conversations with senior financial services talent.
One senior German corporate finance banker told me recently that he had been moved on to a new contract and was expected to work in Frankfurt for a minimum of three days a week with the option of basing himself in London at the start and end of his working week. This would allow him to maintain some sense of family life but the additional costs of doing this would only be picked up by his employer for a short period of time.
Another French banker, specialising in credit derivatives sales, was in discussions about relocating to Paris. Still in his mid-30s and with no ties, his should be a more straightforward move, but even he felt settled in London with a good social life and access to a large number of excellent golf courses.
What is clear is that while a handful of the bigger international banks have begun to make detailed contingency plans for both an orderly and disorderly Brexit, many companies in the financial services sector have not.
But, ultimately, knowing the size and names of the EU returnee talent, as well as having real insight into the views and motivations of talent in the mid to senior layer (i.e. VP/ED/MD) could make all the difference in the inevitable talent war which will ensue over the coming weeks and months as the Brexit end-game plays out.
Even if UK Prime Minister Theresa May gets her deal through Parliament next week, the common consensus is that thousands of financial services jobs will have to shift from London to the European mainland over a number of years as our trading relationship with the EU gradually takes shape. A ‘No Deal’ scenario with the UK crashing out of the Eurozone will cause significantly more chaos as any semblance of an orderly transition will most likely be lost.
Getting into the mind-set of the talent likely to be affected is therefore crucial and can give organisations a discernible edge over their competitors. Who is – and isn’t – willing to relocate? What is the talent cohort thinking? What are the reasons why people would and wouldn’t move to the EU? Which cities would they prefer to relocate to if they had to? Who are the employers of choice? What are they doing differently to gain this recognition?
This kind of insight, built on conversations and real-time sentiment, gives companies the necessary knowledge to take a strategic approach to workforce planning and talent acquisition.
Whatever the outcome of the coming days, whether Brexit is orderly or disorderly, the financial services sector needs to be as prepared as possible. Those organisations which best understand sentiment and have a real qualitative view of the talent landscape are the ones most likely to emerge as winners in the post Brexit talent war.
Felix Ko is Client Partner for Armstrong Craven’s Financial Services team.