Will the United Kingdom’s departure from the European Union make it harder for entrepreneurs to hire the people they need?
Well, according to the seventh edition of the Global Talent Competitive Index, there may be some problems ahead. Compiled by recruitment business Adecco – in collaboration with education provider INSEAD and Google, the report finds that the U.K. has fallen from 9th to 12th place in terms of the country’s ability to attract, retain and develop talent. And as the study’s author’s see it, political instability coupled with poor tolerance of minorities are the key factors behind an admittedly modest drop down the league table.
There is some good news. London has actually improved its position, rising from number 14 to become the world’s second most talent-competitive city. However, the sting in the tail is that Britain’s regions are not doing nearly so well. For instance, Birmingham – the economic engine room for the midlands is ranked at number 76, while the Scottish and Welsh capitals (Edinburgh and Cardiff) are ranked at 45 and 77.
The regional difference should perhaps come as no surprise. As a world city and tech hub, London remains a talent magnet despite high living costs. But the report finds that Britain as a whole has what it describes as a “relatively low degree of internal openness.” Put more bluntly, the country has become less tolerant of minority groups. Viewed through this prism the country’s ranking has plunged from 54 last year to 78 and this is making it harder to attract talent.
The Impact On SMEs
So what does all this mean for entrepreneurs?
Alex Fleming is President and Country Head for the Adecco Group in the U.K. and Ireland. As she observes, tech startups, in particular, are continuing to flourish, despite the uncertainty surrounding Brexit. Indeed, as reported in this column, Britain’s startups raised a record £10.1 billion last year.
But she sounds a note of caution. “SMEs and start-ups could be amongst the worst affected by a decline in the UK’s talent competitiveness – especially in a post-Brexit environment where there are likely to be new immigration restrictions – as many won’t have the resources to counter this negative trend. Whereas large businesses could step up investment in their employer brand and recruitment activity to continue attracting the brightest talent from across the world, this often isn’t an option for smaller organizations,” she says.
As things stand, no one is absolutely certain what the final shape and impact of any new immigration restrictions might be. The Government has pledged to create a points-based system under which skilled workers who have a job to come to will be able to obtain work permits and visa. However, the criteria for eligibility are not yet fully finalized. Meanwhile, the expectation is that European Union citizens will lose their automatic right to come to the U.K. to seek employment. But who knows? The government’s avowed intention to completely opt-out of European freedom of movement laws may soften as trade talks with the E.U. progress.
But entrepreneurs should probably work on the assumption that hiring overseas staff won’t, in future, be so easy as it is today. Fleming says it is time to make preparations, not least by nurturing talent.
“They (employers) should focus on upskilling or cross-skilling existing staff, rethinking job descriptions and hiring from unconventional talent pools,” she says.
For employers accustomed to simply hiring the people they need, when they need them, some of Fleming’s proposed remedies may come as something of a culture shock. For instance, she recommends, that employers take steps to develop staff of all ages by introducing training and upskilling opportunities. This, she says, should go hand in hand with the creation of learning cultures within organizations.
This is, of course, best practice and many companies are doubtless doing it already. On the other hand, it’s potentially tough medicine for a startup that simply needs someone to do some coding to a high standard on a short term basis. And the truth is that the size of the tech startup community, in particular, is probably disproportionate to the number of available skilled workers that can be sourced locally.
So for the foreseeable future, startup companies will need to bring in talent from overseas. From a policy point of view, that will require not only a sensible approach to visas and work permits but also an effort to restore the U.K.’s reputation as a country that embraces minorities and celebrates diversity. In the post-Brexit political climate, that could prove a tricky sell.