London-based hiring halved by Brexit fears
Hiring rates in London’s financial sector have halved, according to recent figures. However, the rate of job relocations to European hubs has been slower than originally forecast.
26 April 2018
The rate at which fund managers in the financial sector are looking for new London-based hires has halved as a result of Brexit, according to new data. Instead, recruiters are concentrating their efforts on other European centres.Investment groups are now starting to target their attention on Paris and Luxembourg in terms of new staff hires. As a consequence, London, Dublin and Frankfurt, all-important financial centres and among those expected to benefit from a Brexit relocation strategy, have been affected.According to data provided by LinkedIn and reported in the Financial Times, the number of London-based investment management job ads posted on the LinkedIn jobs site fell in the first quarter of this year to just under half the number posted in the same period in 2015.
The FT reported that there were close to six times as many jobs posted in Luxembourg in the final quarter of 2017 as there were in the first three months of 2015.LinkedIn’s analysis showed Paris had a spike in investment recruiting in the second half of 2016 and first six months of 2017, with more than 10 times as many jobs posted in the first quarter of 2017 compared to the same period in 2015.
Related stories:
Some have already shifted small or specialist teams, and will migrate staff as and when necessary, but others have signalled that their contingency plans might include establishing a new European headquarters.Experts say the effects of Brexit may be spread over five to ten years as large corporations gradually shift staff and offices to new European centres. London is, however, expected to remain the dominant player in European financial markets at least in the short to medium term.About six trillion euros (£5.3 trillion), or 37 per cent, of Europe’s financial assets are managed in London, double that of Paris. London is also the biggest player in Europe’s 5.2 trillion euro investment banking industry.Around 1.1 million people work in Britain’s financial sector and it is an important source of corporate tax revenue for the UK government.
Join us on 11 May for the Relocate Festival of Global Mobility Thinking at the St Pancras Renaissance Hotel in London where our unique interactive conference will explore the themes of innovation, agility and leadership. Buy your tickets here
For related news and features, visit our Brexit section. Find out more about our upcoming Relocate Awards. Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
Access hundreds of global services and suppliers in our Online Directory
Passporting fears
UK fund managers are concerned that it may be more difficult for London-based staff to provide services to European clients post-Brexit, due to a potential loss of “passporting rights”.This right currently allows financial firms in the UK to deal with and sell services to companies and clients across the EU with restriction or regulatory barriers.The freedom extends to foreign financial firms with bases in the UK, which means that US firms have traditionally had large London subsidiaries from which they do business with EU clients.Financial services companies, insurers, and fund management companies are concerned that the loss of these rights post-Brexit will impose huge limitations on the scope and scale of the business they will be able to do with Europe. As a result, many are moving staff to Paris, Frankfurt, Luxembourg or Dublin.Related stories:
- Hard Brexit will damage the benefits of UK citizenship says new report
- Quarter of London companies ‘eyeing overseas moves’
- EU chief rejects bespoke deal for UK financial firms
Some have already shifted small or specialist teams, and will migrate staff as and when necessary, but others have signalled that their contingency plans might include establishing a new European headquarters.Experts say the effects of Brexit may be spread over five to ten years as large corporations gradually shift staff and offices to new European centres. London is, however, expected to remain the dominant player in European financial markets at least in the short to medium term.About six trillion euros (£5.3 trillion), or 37 per cent, of Europe’s financial assets are managed in London, double that of Paris. London is also the biggest player in Europe’s 5.2 trillion euro investment banking industry.Around 1.1 million people work in Britain’s financial sector and it is an important source of corporate tax revenue for the UK government.
Talent drain is slowing down
Fund managers may be looking to boost their European offices with new hires, but the exodus from London’s financial centre does not appear to be as large or as rapid as some had originally predicted.According to a new report by Reuters, around 5,000 finance jobs will either be shifted from Britain or will be created overseas by March 2019.This is half the number predicted when Reuters conducted its initial research last September.Reuters surveyed 123 firms in its study six months ago, and the follow-up of 119 responses in March 2018 showed that Paris had overtaken Frankfurt as the most popular destination for financial relocation.More than half of the companies surveyed told Reuters they would have to move staff or restructure their businesses because of Brexit.Among those major players who have made contingency plans, the survey found:- Deutsche Bank will move 200 staff initially, rather than the 4,000 originally predicted
- UBS plans to move 200 staff to Frankfurt from London after previously indicating as many as 1,500 jobs might relocate
- Goldman Sachs, which had considered moving about 1,000 people, now expects to move around 500 members of staff
- Insurance companies said they planned to move or create 173 jobs overseas, an increase of 75 from original predictions.
- Around 304 roles will relocate in the fund management industry.
- In total, fewer than 5,000 jobs are likely to be moved, the Reuters survey said.
For related news and features, visit our Brexit section. Find out more about our upcoming Relocate Awards. Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
Access hundreds of global services and suppliers in our Online Directory ©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.
