The Impact of Brexit on Hiring and Retaining Talent in Commodities and Technology
The uncertainty surrounding Brexit has implications on a number of industries, potentially affecting freedom of movement, goods and ease of trading. The current political turmoil in the UK and the risk of leaving Europe without a deal has made investors uneasy and markets unsteady as a consequence; the energy and commodities markets are no exception.
While it is difficult to put market volatility down to politics and the drawn-out process of the UK leaving the EU, the timing of some businesses shifting their sights to Europe is impossible to ignore. The energy market relies on accessibility and clearly defined environmental, market and financial regulations to operate. Uncertainty also heightens the risk of supply shortages due to increasingly common extreme weather events and rising supply costs.
Some energy and commodities trading floors have announced plans to relocate: Total is moving its London trading floors to Geneva and Paris, while Gazprom Marketing & Trading is considering moving its traders back to Russia. But it is not only trading floors and front offices that are leaving Britain; technology divisions at oil majors like Shell and Chevron, ABCD firms (Archer Daniels Midland, Bunge, Cargill and Dreyfus) and trading houses such as Gunvor have all been nearshored or offshored.
So as front office technology staff and larger technology divisions are moved away from the UK, how will companies attract talent to new markets?
Relocating employees from the London technology sector is challenging and can be financially cumbersome for businesses. Retention bonuses and packages – in addition to relocation costs – quickly add up, especially in large companies where entire teams and divisions are moved. If businesses are looking to relocate trading floors and their technology support teams to an expensive city like Geneva, employment packages need to be adjusted to offer individuals and their families a continuation of their established quality of life.
And as for the employees themselves, relocation can be a stressful ordeal that they would rather avoid, especially when it means uprooting their family.
In London, the talent pool in technology is robust, varied and highly sought after. The sector is growing faster than the UK economy and is a leader in Europe for attracting technology investment. Between 2011 and 2017, the UK attracted over £28 billion in technology investment compared with France and Germany’s £11 billion and £9.3 billion respectively.
The calibre of talent in the technology field in London is first-rate. As a technology hub, it is consistently ranked in the top 10 globally and the first in Europe, but will European markets be able to attract the same level of talent? And if good employees are hired, how can they be retained? Sourcing the right specialist professionals in new market locations can potentially become a costly and time-consuming challenge.
Technology is at the heart of modern life, connecting people and systems across the globe. Despite this, there is still the human factor to consider; for an individual, the decision to relocate for a job opportunity can be motivated by emotions, convenience and family commitments. In the wake of Brexit, companies that operate in Europe might find it difficult to entice – and retain – top talent away from London.
While we still do not understand the impact that Brexit will have on the energy and technology sectors, companies that move their operations out of the UK could lose access to one of the best talent pools in the world; no matter what happens in the coming months and years, if businesses are too intently focused on their bottom lines, they will lose out on attracting top performers.
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References:
https://news.sky.com/story/energy-giant-total-to-move-uk-trading-jobs-to-geneva-11637587
https://www.finextra.com/pressarticle/77207/london-is-top-european-hub-for-global-tech-talent
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