Brexit’s Impact on Talent

As 2016 comes to a close, Talent Management 360 is offering detailed insights into some of the year’s top news stories and speculating on how these stories will likely continue to impact talent management in the coming year. The second article in our series examines one of 2016’s most surprising stories: the U.K.’s sudden decision to leave the European Union.

downloadWhen the numbers started to come in last June, many people in the U.K. were in disbelief. What had been largely dismissed as a fringe group of xenophobes had gathered enough steam to turn the vote in their favor. By the next morning, the stock markets was in chaos and many British and EU residents living in the U.K. where wondering what would happen next.

Nearly six months later, the U.K. is still part of the EU and challenges to the referendum outcome have been launched by individuals and entire regions, including Scotland. Assuming the Brexit does go ahead, however, there are many ways in which the decision will impact talent management in the U.K. and more broadly, in Europe.

Hiring Growth in the Private Sector

This week, Business Insider reported that growth in the private sector is strong in the U.K. with 9% to 13% grow in some industries from construction to energy. One speculation is that some industries are attempting to recruit from across Europe before restrictions come into full force over the coming two years. The public sector, however, is another story: “Despite growth in the private sector, the public sector is set to continue to contract at the start of next year with an employment reading of -3% of the second quarter in a row.” Of course, there are some public sector employees who may be in high demand: “Manpower is predicting a boom in business service hiring as the government recruits essential skills to help it in Brexit negotiations.”

Economic Growth, At Least for Now

Recent economic data reveals that the UK economy actually grew by 0.5% following the vote. And despite an initial hit, consumer confidence soon bounced back to pre-referendum levels. The bottom line is that the economy is still growing at a modest level. However, there are also worries that economic growth could be reduced by 1.1% by 2018 if both business investment and immigration plummet as a result of Brexit. What is certain is that uncertainty is bound to continuing structuring business throughout the UK and in turn, impacting recruitment efforts.

Tech Industry Concerns

downloadWhile homegrown industries, like construction, continue to flourish, at least some industries are getting cold feet post-Brexit. The tech industry relies heavily on skilled labor from around the world, so unlike some industries, it is naturally expressing greater concerns about Brexit’s long-term impact. As reported in Business Insider in early December: “Stricter controls could see startups and growing businesses unable to bring over enough talent from Europe — or even lose the talent they have, risking making Britain a less attractive hub to found and grow companies.” There is also some concern that venture capital firms will pull out of interest in the UK as the nation’s market becomes increasingly volatile.


While it is still too soon to predict how Brexit will impact talent recruitment and management in the UK over the coming year, there’s no question that the uncertainty will prevail. If current trends are any sign, the UK can expect to see growth in industries that rely primarily on locals–hence, the upswing in hiring in construction and energy–and potential see declines in more global industries, including technology. Over time, of course, other factors may come into play. Will existing EU workers be able to stay or choose to stay if they can? Will certain large districts, such as London, attempt to create their own policies to ensure EU workers can continue to live and work in the city? Will British residents working abroad in the rest of Europe be forced or choose to return to the UK and if so, how will this impact the workforce? All these questions will likely have clearer answers by the end of 2017.

December 13, 2016   Updated :December 23, 2016      

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