Labor Market Greets Brexit With Hiring Freezes and Job Searches

Labor Market Greets Brexit With Hiring Freezes and Job Searches

Last Thursday’s Brexit referendum is already showing signs of its impact on the UK’s labor market. A snap poll by the Institute of Directors taken in the immediate aftermath of the vote found that one quarter of organizations plan to freeze hiring in response, Jo Faragher reports at Personnel Today:

The IoD surveyed 1,000 of its members, revealing that one-third would keep hiring at the same pace, and 5% would cut jobs. One in five (22%) are considering moving some of their operations outside of the UK, the poll found. The weekend’s headlines have already revealed that HSBC plans to move up to 1,000 staff from London to Paris if the UK leaves the single market, while on Friday it was suggested that investment bank Morgan Stanley could move around 2,000 roles from London to Dublin or Frankfurt.

Simon Walker, director general of the IoD, said: “Businesses will be busy working out how they are going to adapt and succeed after the referendum result. But we can’t sugar-coat this, many of our members are feeling anxious. A majority of business leaders think the vote for Brexit is bad for them, and, as a result, plans for investment and hiring are being put on hold or scaled back.”

Employees and job seekers in Great Britain also reacted immediately, with the job search site Indeed registering “a huge spike in job search leaving the UK” on Friday morning, “and surges of interest towards EU-member Ireland but also other English-speaking job markets, located far from Europe”:

In fact, Indeed data shows that in the 48 hours following the announcement of the results, the share of UK job seekers looking for opportunities in European countries was double the average in the days prior to the vote. As for what they were looking for, top searches included roles in marketing, human resources, hospitality and the finance sectors. …

At their peak, job searches from the UK to Ireland on June 24th (the day the result of the referendum was announced) were 2.5 times higher than the average in the days before the vote. Job seekers were looking for work in fields including marketing, human resources, engineering, transportation and retail. …

[M]any UK job seekers started looking for work in English-speaking countries besides Ireland, located outside the EU. In Canada, job search from the UK was 4.2 times higher than the average in the days before the results of the referendum were announced—a much bigger spike than observed in Ireland and the EU. In other English-speaking job markets there was also a jump: In the US, job search for the UK increased by 1.7 and by 1.9 in Australia.

Raghav Singh at ERE predicts that Brexit will ultimately drive more EU citizens to emigrate to the US:

About 11 percent all employment-based green cards — just over 18,000 — are given to EU nationals (including about 6,000 to nationals of the UK). The all-but-certain curbs on immigration in the UK will drive more talent to the U.S., both from the EU and other countries. The Blue Card program — the EU’s equivalent of the Green Card — will certainly be affected and further restrict the flow of talent to Europe. The program was intended to provide a fast-track for skilled workers to gain residency in Europe, but has not been fully implemented outside Germany. With the possibility of other member states leaving the EU, progress on the program is unlikely.

New York City stands to gain the most from Brexit. London is one of the biggest financial centers in the world, and major banks and multinationals will likely move offices and jobs out of the UK to keep their operations in the EU. Several U.S. banks have already begun a process to move several thousand jobs out of London. This will diminish the status of London, to the benefit of New York as an even bigger financial center.