By Josh Warren
Service Delivery, Client Services at Société Générale
The UK financial services and investment banking industry has always relied on talent from within the European Union. Pre-Brexit, a significant number of hires into UK based financial services organisations came from the EU. However, we’re now facing added complexities that make it more prudent to focus on home-grown talent.
With the cost of an individual immigrating to the UK totalling up to 10k per hire, plus relocation costs in many cases, the financial impact for banks hiring from the EU will increase. Before Brexit, sponsorship was usually reserved for talent outside of the EU. Banks are now facing these costs for people anywhere in the world for any level position.
There are also time constraints: Whilst time to identify the talent and make the offer might not be affected, it can take up to 3 months to process visas, resulting in the onboarding process being problematically lengthy.
Prior to Brexit, London was the EU financial services capital, however, the ECB (European Central Bank) has put guidance into place that prohibits certain functions from being performed in the UK. For example, to carry out a sales, trading, or revenue-generating position with a client base targeted in a specific country within the EU, you must be based in that country. As a result, many roles have moved to EU member countries and the talent has remained in the EU. Subsequently, the EU is targeting UK based candidates for these EU positions, further decreasing talent in the UK. This has further added to the pressure on the UK’s financial services industry to recruit locally.
Many Asian and American financial services organisations have responded by setting up hubs in the EU. 87% of US investment banks’ EU staff were traditionally based in the UK, we expect this proportion to decrease as some roles must move to EU countries.
Talent attraction at a grass-roots level
Many organisations in the UK that were of an EU origin were able to take advantage of the Voluntary Experience Scheme (VIE). VIE is an HR device for international mobility specifically aimed at Early Talent. Under VIE, individuals would come to the UK to train, work, and hopefully be offered permanent positions. We cannot do that right now, and it is unclear when we will be able to start up again due to the changes in immigration post-Brexit.
What this means is that campus offerings in the UK, along with university relations, need to be much stronger. Targeting early careers talent through a tailored talent acquisition strategy will be essential for the future of the competitiveness of the UK financial services industry.
London is still a substantial hub for world finance and will continue to grow. In fact, with a focus beyond Europe, we’ll compete more with the likes of New York and Singapore.
The changes occasioned by Brexit do not mean that banks won’t hire from the EU anymore; just that local talent pools are more likely to be the first port of call. Those pools do, however, need to be continually developed – as does the candidate experience. We expect to see a greater focus on internal skills mapping, internal cross-training and succession planning. We hope that this will be the impetus needed to re-invigorate the social mobility commitment of Banks. This can be the trigger for re-energising diversity, equity, and inclusion programmes to access and retain diverse talent.