The UK financial services industry has had to face several challenges since the Brexit referendum in 2016. The UK financial services employment market is feeling the effects of Brexit, as predictions for growth and job security have been significantly revised.
Since the 2016 referendum, uncertainty took its toll on financial services jobs with a lot of speculation. Many firms moved jobs to the EU before the referendum, with some estimates at the time suggesting up to 75,000 jobs would be lost in the UK by the end of 2020. The Bank of England downgraded its forecasts in 2020, predicting that the UK financial services sector would shrink by 4.6% in 2020. However, this was due to a combination of the economic uncertainty of Brexit, as well as the impact of the coronavirus pandemic.
With the lack of skilled financial services professionals able available to settle in the UK for employment purposes as before Brexit there have been skills shortages in certain areas. And just like other sectors the competition for talent and salaries has increased and not just because of the current inflation levels.
Silver Linings
Are there any silver linings? Britain’s City minister in April 2022, John Glen, agreed with estimates that about 7,000 jobs moved from the Square Mile to the EU after Brexit, but added that the financial services sector “had not experienced the haemorrhaging” of roles that many had anticipated. So the figures are below the initial estimates.
Those banks and other financial services companies have had to relocate staff to other parts of the EU to ensure their continued access to the European market. This has led to an increase in the number of job opportunities for those looking to move abroad and has also created more positions at home for those wanting to stay in the UK.
The relocation of staff to the EU has also allowed companies to tap into a larger talent pool, which has led to the recruitment of more highly skilled individuals from across the continent in their European offices. This has had a beneficial effect on the UK financial services industry, with many of the recruits bringing fresh ideas and a different perspective to the sector.
On top of this, the UK government implemented new regulations to help the financial services sector remain competitive post-Brexit. This has led to an increase in the number of jobs available in the industry, thus providing more opportunities for those looking to work in the sector.
All in all, the Brexit effect on employment in the UK financial services industry has been beneficial, despite the uncertainty that surrounded it in the lead-up to the referendum. However, Brexit continues to cast a shadow over the UK financial services employment market, but it is possible for the sector to recover in the years ahead and there are growing silver linings.
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