When the United Kingdom left the European Union, potentially dooming its talent market to indecision and shortages, many HR leaders were worried. Companies have been worried since 2016. Brexit trackers monitored companies that warned of earning hits, relocating their talent, moving headquarters, or putting deals on hold.
So why are some companies ramping up hiring in the UK and using Brexit as an opportunity? Although Brexit has its challenges, it’s actually freeing up a highly skilled talent pool, and some companies are ready to seize them. These companies exemplify how a global talent mobility strategy can capitalize on situations that send some competitors running.
The data indicates that talent could become scarcer in the UK rather than more accessible—so it’s not shocking that Brexit is unnerving for HR teams. The UK’s secession leaves the status of some 3.6 million EU-born residents, who represent 7.5 percent of the workforce, in question. Over 84,000 UK citizens left for the European mainland in 2019, bringing emigration to a 10-year high.
Meanwhile, net immigration into the UK has reached a 16-year low. The so-called “Brexodus” has led to brain drain at universities and might exacerbate talent shortages in STEM fields. In response to Brexit, a VIP list of multinationals including Airbus, Barclays, Dyson, Ford, Jaguar Land Rover, JPMorgan Chase, Panasonic, and Sony vowed to cut jobs, move operations outside the UK, or move their headquarters abroad. Some already have.
If they are set on leaving the UK, why are some companies moving in? Shortly after the Brexit referendum, NTT Ltd, a Japanese-owned technology services company with 40,000 employees, moved its headquarters to London. Earlier this year, Facebook COO Sheryl Sandberg promised to create 1,000 new jobs in London in 2020, just as many companies were sending employees across the English Channel.
Surely these companies have lost it, right? The firms exiting the UK fear direct threats to their businesses. A no-deal Brexit could lead to new tariffs, an even weaker pound, supply chain interruptions, and the inability to provide financial services to the EU. But if your UK office performs location-independent work like R&D or product development, what does Brexit matter?
The 2020 Global Talent Competitiveness (GTCI) Index ranks the United Kingdom the 12th best talent market in the world based on its ability to “enable,” “attract,” “grow,” and “retain” talent. Not only that, the GTCI Index says that the UK has the world’s third best pool of Global Knowledge Skills, which refers to workers in professional, managerial, or leadership roles.
Most likely, the corporate Brexodus is freeing up in-demand workers who want job security in the UK.
Why wouldn’t employees be ready for change?
The firms that responded to Brexit by threatening to cut jobs, relocate employees, or shutter deals spread uncertainty among their workforces—so it makes sense that NTT and Facebook swooped in.
Put yourself in the shoes of workers who have built their lives in the UK. After years of paying taxes to Her Majesty’s Revenue and Customs, you must now apply for the right to stay in the UK post-Brexit. If you don’t get approved, you might be booted out of the UK within three years. Your employer might relocate you before then anyway.
If the UK is home, why bet your fate on the terrible odds of a good UK-EU Brexit deal? Why not move to companies like NTT or Facebook, which promise certainty? The more digital the firm, the more shielded it is from the effects of Brexit.
What we learned from Brexit
Brexit has taught us how few HR teams have the planning capabilities and talent mobility data to assess counterintuitive opportunities. Companies who are willing to take this data seriously and take action in the face of uncertainty will thrive.
In the 2020s, trade wars and immigrations policies may create Brexit-like conditions elsewhere in the world. Most businesses will avoid these meltdowns. Some will miss opportunities as a result.