Brexit Britain: are we facing a financial services talent drought?
16 January 2020: as the figures for net migration to the UK plummet to a 16-year low, will the financial services sector find itself short of talent? Fraser Vandal, a solicitor in law firm TLT’s immigration team, explains how Brexit will affect industry employment.
The latest statistics from the Office for National Statistics show that net migration from the UK to the EU has fallen to its lowest level since 2003. There are a number of reasons for this, but concerns over the ability to remain in the UK in the post-Brexit age is likely to be a key factor, as is concerted attempts by some EU countries to bring skilled people back home.
The financial services sector, however, should be safe from drastic talent shortages according to Vandal. He points out that non-British staff in the sector tend to be French, German, Dutch or Spanish and will have been in the UK for more than five years, giving them permanent right of residence.
With the EU (Withdrawal Agreement) Bill having secured the backing of MPs – meaning the UK is set to leave the EU at the end of January – there will be at least an 11-month window under which EU nationals will be able to apply for settled status under the EU Settlement Scheme, he adds. "Many EU headquartered banks have had offices in the UK (particularly London) for some time and EU staff working for those institutions in the UK may well have been here for 5 years, which would qualify them for permanent residence. Of course; if these institutions reduce their presence in the UK, these individuals may have a decision to make regarding their future work location.”
There will also be a scheme through which organisations can bring in talent from overseas in a post-Brexit environment. The Queen’s Speech set out plans for an Australian-style points-based system and anyone arriving from 2021 is likely to face the same immigration controls as non-EU citizens. “But there will still be a skillset there,” says Vandal. “What we don’t know is whether individuals who have returned home will come back, or whether a number of other migrants will come knowing they have a means by which to protect their status if they arrive in the UK before the end of 2020.”
Then there’s the issue of financial organisations choosing to move operations outside of the UK, which would likely free up significant numbers of people who opt against leaving. Already around 7,000 jobs and £1trn in assets have been moved out of the UK, according to Big Four firm EY, with the real figure likely to be higher. “That’s a lot of people to try to find alternative jobs for, and in that scenario, there will likely be an increasingly competitive recruitment market in the sector,” points out Vandal.
The extent of any skills shortage will also depend on the wider economic situation and the financial institutions’ response. “It may be that financial institutions are forced to better incentivise staff to come over through long-term incentive plans or higher salaries,” he says.
“It’s probably going to take a bit of time before it all settles down and we get an accurate picture of how those organisations are performing.”