European ambitions: is the UK heading for Brexit brain drain?

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Freedom of movement, one of the most fundamental pillars of EU membership, has allowed citizens of countries in the bloc to live and work seamlessly wherever they wish. It has also been one of the key aspects of the Brexit debate since the beginning. 

For UK businesses, there are concerns over how post-Brexit changes to immigration law could impact the UK’s talent pool and skills in key sectors such as finance, health and technology. Employers in the UK could face tougher competition as other EU countries experience a positive effect on their labour markets. 

ONS migration statistics from August 2019 point to immigration from the EU declining since 2016, although there are more EU citizens moving to the UK than leaving – with the exception of those from EU8 countries in Central and Eastern Europe.

As with many issues surrounding the departure from the EU, the question of how immigration policy will be affected remains foggy and many EU citizens have been in a state of limbo. 

The introduction of the government’s settlement scheme, which allows EU nationals to apply to continue living and working in the UK indefinitely after Brexit, provided some certainty but, according to recent figures, only 609,000 people have been granted ‘settled status’ and 342,600 ‘pre-settled status’ out of an estimated 3.3m people. The scheme has also been heavily criticised by campaigners, partly because it lacks physical proof of status. 

Other than a temporary scheme to be introduced in the event of a no-deal Brexit – allowing EU nationals arriving before the end of 2020 to apply to stay for three years – it is also unclear what Brexit means for EU nationals looking to move to the UK in future, potentially creating a longer-term workforce- planning headache for companies. 

Over half of businesses believe the country is at risk of a brain drain after Brexit, with many particularly worried about a shortage of tech skills, according to research commissioned by software firm Salesforce.

Commenting on the August immigration statistics, Matthew Fell, chief UK policy director at the CBI, said skills shortages are worsening as a result of the downward trend in EU migration coupled with record low unemployment. 

“Business understands that free movement is ending, but it marks a huge change in the way firms access skills and labour. They’ll need proper time to adapt to a new system,” he added.

The struggle for talent

While impossible to predict the long-term ramifications for the UK labour market, and hiring, recruitment and staff retention outside of EU membership, what is known is that business likes certainty and any disruption is likely to be keenly felt.

For market research, an industry that struggles to attract new talent, the prospect of the pool of potential candidates becoming smaller is unsettling. “There hasn’t ever been a sufficient supply of talent for the industry,” says Liz Norman, founder of Elizabeth Norman International, which specialises in recruitment for market research, data and analytics. “The industry is a global one and we need individuals who have first-hand experience of markets and consumers in other countries.”

Norman recently looked back on researchers the company placed 16 years ago into UK roles – 26% are now working in another country. “That reflects just how much researchers have moved around globally in the past; anything that restricts that is of serious concern,” she says.

Jem Fawcus, group chief executive at insight agency Firefish, agrees, saying that Brexit is only compounding an existing issue. “The fight for good talent is harder than it’s ever been – there’s a huge amount of competition.”

An agile working policy allows Firefish employees to work remotely, so it has staff based around the UK, European nationals who work in their country of origin, and UK nationals in other parts of the EU, and Brexit adds a layer of complexity in managing this, says Fawcus. Historically, the agency has had a substantial proportion of EU candidates for its paid internship programme, but this has dropped recently. He adds: “People don’t feel welcome – they’re not confident about what’s going to happen, so Britain is a less attractive place for that.”

This unease is also reflected in research from the Chartered Institute of Personnel and Development that, in autumn 2018, found around half ( 48%) of employers of EU nationals reported an increase in their EU workforce expressing insecurity about their jobs as a result of Brexit. The publication of the EU settlement toolkit did little to quell employers’ fears – only 28% said it has helped their confidence in retaining EU nationals.

“A huge element of this is the emotional turmoil it causes – it’s very difficult to quantify,” says Fawcus.

European prospects

Aside from the uncertainty facing people who live and work in the UK at the moment, it is also unclear what longer term impact Brexit could have if there are fewer skilled EU professionals moving here. Olga Siemers, lecturer in public policy at King’s College London, who is embarking on a research project on the issue, says this is more of a concern.

“A number of examples of political changes from other countries (such as an election of a new president with a different political agenda), have resulted in a discussion that the ‘best and brightest’ are going to leave. In fact, some are leaving while many are staying because of practical reasons not related to politics. So, a scenario where high-skilled EU citizens stop coming to the post-Brexit UK (or this number is reduced) is much more concerning than the outmigration of those already based in the UK.”

One possible consequence of talent flowing out of the UK, or the country being less attractive to EU talent in future, is that other parts of Europe could see a boost, says Siemers. 

“Brexit presents an additional recruitment opportunity for Europe-based companies and organisations, especially, with English as a working language. Amsterdam, Brussels, Geneva, Copenhagen and Stockholm are cities with large expatriate communities that offer an English-speaking environment, geographical proximity, and compete for ‘talent’ with London.”

This article was first published in the October 2019 issue of Impact.