It's the end of the world as we know it - and I feel fine...
2nd June 2017 3 minutes read
I hear lots of chatter and get asked regularly about Brexit, particularly its impacts on our economy, UK Plc business continuity and what this all means for the UK job market. My standard response is that it is just too easy to use Brexit as a catch all for our current working woes; it’s happening and we need to start being objective about the potential it presents.
Let’s look at the reality of the situation and see what we can glean from vague and uncertain plans for Brexit. What we definitely know is that:
According to Oliver Wyman, they estimate 25% of the £200BN of annual financial services revenues come from international and wholesale business related to the EU. This business has to go somewhere and while large corporates will be able to subsume this into their existing infrastructure, others will not have the capacity and will be forced to look for alternative locations where they can passport around the EU away from third country status the UK may end up with. Dublin, Luxembourg and in the case of Lloyds of London, Brussels, will all be popular locations.
What does this mean for recruitment? Recruitment and recruiters are highly attuned to economic changes, as we feel it instantaneously. The day after Lehman Brothers collapsed, the phones stopped ringing, hiring came to a halt and the market took stock of the implications on their businesses of Lehman. We all know how this played out, and if you need a reminder the Big Short is worth a watch.
Today in Financial services recruitment, we are witnessing the following: restraint on investing in new large business change programmes, more focus cost management and simplification programmes, ongoing permanent hiring with some head count freezers in the mix, and a natural concern about what is the real cost of Brexit going to be to our clients businesses. With the number of unknowns, it is hard to estimate the cost implications but it would be foolhardy to assume it is nothing.
For Green Park, we expect to see opportunities as companies firm up their plans. There will be needs for the 8,000 companies who will either need to become fully-fledged FCA regulated business or pull out of the UK market. Specialisation in new market entrants and the process of applying for licences can be complex and those with this experience can expect to be kept busy. Change programmes as companies move staff, set up new operations and redefine themselves in the UK. Will need help, as will UK companies who will need approval from the local regulator to trade in new regions.
How quickly these needs will arise will be subject to transition agreements or not? Or if UK Plc will be left with cliff face drop. I would be surprised if financial services companies will play the risky waiting game and instead I expect to see them starting to take action over the coming months. These needs will be fulfilled by talented interim managers and management consultancies, we will just have to be as proactive as possible in predicting what the final blend will be.