Brexit job losses have already begun, recruiters say

The recruiting slowdown 'is having an impact right now'

A vote to leave would hit financial services particularly hard. About 340,000 EU citizens work in the British finance sector, roughly 18% of the Europeans employed in the UK
A vote to leave would hit financial services particularly hard. About 340,000 EU citizens work in the British finance sector, roughly 18% of the Europeans employed in the UK

Pro-EU forces have warned that if Britain votes to exit the union on June 23, the country could lose almost a million jobs. Recruiters say the damage has already begun.

“Companies are pushing the pause button,” said Kit Bingham, a partner at executive search firm Odgers Berndtson. An Odgers poll last month found that a quarter of directors at FTSE 350 companies would consider relocating at least part of their business if voters approve a Brexit.

Even with a vote to stay, some harm is inevitable, economists say. The slowdown in hiring during the months of uncertainty before the poll will “come up in the GDP numbers,” said Swati Dhingra, an assistant professor at the London School of Economics. “

EU Referendum: Latest Poll

There’s going to be a lag. It won’t recover overnight.”

Recruiter Randstad UK found that 17 per cent of 340 professionals polled in May had already frozen hiring, while 25 per cent were turning to short-term contracts to fill jobs.

The recruiting slowdown “is having an impact right now,” said Sir Andrew Likierman, Dean of the London Business School.

In human resources, hiring was down by 28 per cent in the first five months of the year, according to Digby Morgan, the Randstad unit that focuses on that field. And polls predicting a close vote have contributed to the shift, according to Tom Forrest, Digby Morgan’s managing director.

“In a way, it’s a self-fulfilling prophecy,” Forrest said. “The more everyone talks, the more everyone believes it. Our clients crave certainty.”

A vote to leave would hit financial services particularly hard. About 340,000 EU citizens work in the British finance sector, roughly 18 percent of the Europeans employed in the UK, according to data from the University of Oxford.

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Deutsche Bank and HSBC have said they are likely to move some employees to the Continent in the event of a vote to quit the union. JPMorgan, the largest US bank, said it might move a quarter of its 16,000 British workers to Europe.

Brexit could mean fewer JPMorgan jobs in the UK and more jobs in Europe,” said Jamie Dimon, the bank’s chief executive officer.

Tech Exit

Tech companies are also putting projects on hold, which means a slowdown in hiring of software developers, IT architects and project managers, according to Robert Grimsey, director of Harvey Nash, a recruiter that specializes in the sector. One in six tech workers in London come from other EU countries, the company estimates.

“London is highly reliant on migration, especially EU migration, for technology innovation,” Grimsey said. In the event of a Brexit, “at some companies, a quarter of their IT departments would disappear.”

While banks and tech companies fret over where to locate their top people if the UK were to quit the EU, retail, hospitality and food service would face bigger problems as Europeans make up a big share of unskilled workers in those sectors, according to Madeleine Sumption, director of the Migration Observatory, a research group at Oxford.

Most senior European managers and technology specialists would receive the skilled worker status that US, Canadian and Japanese nationals currently need to work in the UK, she said — though bureaucratic hurdles would increase.

“People in these executive roles qualify relatively easily” for work visas, Sumption said. The biggest impact would be felt “lower down the food chain.”

The EU referendum debate has so far been characterised by bias, distortion and exaggeration. So until 23 June we we’re running a series of question and answer features that explain the most important issues in a detailed, dispassionate way to help inform your decision.

What is Brexit and why are we having an EU referendum?

Will we gain or lose rights by leaving the European Union?

What will happen to immigration if there's Brexit?

Will Brexit make the UK more or less safe?

Will the UK benefit from being released from EU laws?

Will leaving the EU save taxpayers money and mean more money for the NHS?

What will Brexit do to UK trade?

How Brexit will affect British tourism

What will Brexit mean for British tourists booking holidays in the EU?

Will Brexit help or damage the environment?

Will Brexit mean that Europeans have to leave the UK?

What will Brexit mean for British expats?

© 2016 Bloomberg L.P

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