Brexit - Where will all the A-Players go?
As published in Tabb Forum
Most birds migrate for winter. Whether they migrate north or south depends on where you are - but you can bet that when the winds change, they’re off. Fish migrate too. The timescales vary from annual to weekly, but when the food moves – so do the fish. The migration patterns of the red crab are so predictable that officials are able to plan annual road closures to ensure their safe crossing and avoid too much local disruption. Mammals migrate. Deer, horse, sheep – even whales (one Humpback clocked up an impressive 9,800 km in one move). They, along with countless breeds of insects and reptiles can be observed following the same patterns, every time, like clockwork. So, why does this happen? Animals migrate for lots of reasons – but when you break it down, it’s usually for one thing: food.
Talent migrates, too. Often in different directions and rarely as a pack – but it moves all the same. And in our case, why do talented people up and move their life half way around the world? Well, like animals we migrate for lots of different reasons – but when you break it down, it’s usually for one reason: opportunity. Opportunity, more often than not, coming in the form of gainful employment.
The winds are changing in Britain. It’s too soon to know the outcome of Vote Leave, but two questions are evident. First, if moving fresh talent into the UK becomes more difficult, then just how willing are UK businesses to bear that burden? Secondly, if talent senses greater opportunity elsewhere – will it stay or will it go?
As a recruitment company, Kite delivers high calibre people to the Financial Markets. We work with the CCPs, exchanges, settlement providers and broker-dealers, across Europe and Asia. We are the only business to claim this particular specialism, so there is a unique opportunity to track trends in this market as we try to understand what a Brexit Britain will look like. There is precious little clarity at the moment as to the future state of EU residents who wish to work in London – both for those already here and for those who may seek to move in the future. We can, however, be relatively sure of one thing; it’s very unlikely to be as simple as it is now. This raises our first question of how willing the financial markets will be to sponsor, pay, fund or manage the movement of talent into the UK should we exist outside of the EEA. Since we can’t look forward (my DeLorean is broken), let’s look at what we can learn from the past (my CRM is just fine).
Over the past 5 years just over 79% of the placements we have made into the London markets have been British passport holders. In other words, talent that will be available with or without EEA membership. Just over 11% of the placements we have made in London have been EU passport holders and a further 9.5% have come from outside of the EU and required sponsorship of some form or another. At face value these stats are fairly mundane, but there’s a hidden gem in the detail. The figures reveal that our customers are almost as likely to endure the challenge of sponsoring a move from outside the EU (9.5%) as they are to accept an EU passport holder with freedom of movement (11%). In other words – the financial markets have already demonstrated that they are prepared to cough up both the effort and the cost to move talented people into the positions in which they are needed. The precedent has already been set – The City is willing to pay a premium for talent and the good news is that there’s no reason to believe this would change in a post-Brexit London.
This shouldn’t come as too much of a surprise. I know more than most that the City will pay to get the best people – we’ve literally bet our business on it. But, there is an interesting chick & egg scenario. London is packed full of talent – we call them A-Players, and the proportion available in London when compared to other European cities is significantly higher. But why is the talent here? Are the A-Players here because of all the great jobs – or are the jobs here because of all the great A-Players?
Make no mistake, the most important commodity in the financial markets is high calibre people and if the financial markets can’t find high calibre people here – they’ll look elsewhere. This might lead to significant changes in global organisational design. To put it bluntly, that may lead to fewer jobs in London. Because, whilst it’s interesting to note that the financial markets in London draw c20% of their talent from outside Britain –what happens if some of the remaining 79.5% of British talent along with their EU counterparts, start looking further afield for their next career move? The answer unfortunately is obvious, if London can’t retain its talent then it can no longer survive as the financial markets capital of the world.
The A-Players will be fine – our customers across Europe and Asia welcome London talent and the best people will always find rewarding, challenging work. It is the market and the country that would suffer. But, before we go all gloom and doom – let’s think about this logically. Yes, people relocate for opportunity. This has been the case for as far back as the history books go and beyond. But, why do people stay? The reality is that a huge proportion of the opportunity hunters who moved to London, whether from elsewhere in the UK, from the EU or further afield, did so earlier in their careers and are now settled here. Their partners, children, children’s schools, mortgages, pets, friends, hobbies and community are in London. These aspects of their life are, for the most part, unaffected by Vote Leave and the vast majority of A-Players in the space are simply not looking to leave. How do we know this? Because we spend every single day talking to them. Our team spend every day working to identify, verify and understand London and Europe’s financial markets’ A-Player community. There is no theme, major or minor, of anyone seriously considering a move out of London.
So what can we expect in the years to come? It is fair to say that the talented people who choose to live in London, choose to live here for a multitude of complex and personal reasons that cannot be wrapped up in any one political blanket. It is also true that the major players in financial markets build their global strategy on the availability of talent – they’re willing to pay to move it, yes, but wherever possible they will position their business in the place where the most diverse and capable talent pool resides.
London’s position as the number one global financial centre is a significant accolade and carries great weight as we spar and trade with our global counterparts. However, as strong as our position may be – London is not bullet proof and there remains only a comparatively slight margin between us and those on our trail. New York, Singapore, Hong Kong and Tokyo are all chomping at the bit to take our place, and the ammunition in that battle is people. If the talent stays in London, so will the markets. If the markets stay in London, more talent will follow. All our data suggests that as the City is willing to pay to bring talent in, there should be very little appetite to move the focus away from London.