On January 31, 2020, the United Kingdom officially left the European Union, supposedly dooming its talent market to uncertainty, shortages, and obscurity. At least, that’s how it looked to most HR leaders.
Since the referendum vote in June 2016, scores of companies have been on edge. Bloomberg News built a Brexit tracker just to monitor 74 companies that have warned of earning hits, relocated their talent, moved headquarters, or put deals on hold.
Yet some firms act as if Brexit is an opportunity, not a threat. They have ramped up hiring in the UK or even relocated their headquarters to the British Isles. Why?
Brexit, despite its negative impacts, is actually freeing up a highly-skilled talent pool, and some firms are positioning themselves to claim it. These companies exemplify how a global talent mobility strategy can capitalize on situations that send competitors scrambling away.
Inhale, Brexhale
At first glance, Brexit looks like a good reason for HR to panic. The data indicates that talent could become scarcer in the UK rather than more accessible.
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 have followed through. If they’re all determined to leave the UK, why are some companies determined to charge in?
Capitalizing on uncertainty
Shortly after the Brexit referendum, NTT Ltd, a Japanese-owned technology services company with 40,000 employees, moved its headquarters to London. On January 21, 2020, Facebook promised to create 1,000 new jobs in London this year, which would expand its UK workforce beyond 4,000 employees. Most of these jobs are in software engineering, product design, and data science.
Have these companies lost their marbles?
Not at all. 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. The UK is also home to about a quarter of the world’s top 20 universities.
Most likely, the corporate Brexodus is freeing up in-demand workers who want job security in the UK.
Brexit from a worker’s perspective
The firms that responded to Brexit by threatening to cut jobs, relocate employees, or shutter deals spread uncertainty among their workforces. Why wouldn’t NTT and Facebook try to attract people from these companies? And why wouldn’t these employees take their offers seriously?
Put yourself in the shoes of knowledge workers who have built their lives in the UK. After years of paying taxes to Her Majesty’s Revenue and Customs, you must 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.
Brexit as usual
Brexit is the new normal for businesses. In the 2020s, political violence, trade wars, and immigration policies are bound to create Brexit-like conditions elsewhere in the world. Most businesses will avoid these political meltdowns. Some will miss opportunities as a result.
The Brexit drama has demonstrated how few HR teams have the scenario-planning capabilities and talent mobility data to assess counterintuitive opportunities. It’s not normal to think, “Look at that political mess! Shall we beef up hiring there?”
HR leaders must learn to live with Brexit as usual. Those who mitigate losses and risks will be valued. But those who find opportunity where others see danger could become the most influential voices in the boardroom.