LONDON — Brexit is causing companies in London and Scotland to hire people at a much slower rate than other major cities around the world, according to one of the world’s largest employment consultancy firms.
ManpowerGroup’s second quarter Employment Outlook Survey found business hiring in the UK capital and Scotland has dropped to its lowest level since Q1 2014 due to uncertainty over how the UK will fare after Britain finally leaves the European Union. The conclusion is based on a survey of 2,000 employers.
The overall Net Employment Outlook in the UK has dropped two points to +5%, according to the report. Firms are still hiring, but the rate of hiring has slowed.
“Across the world, we are seeing positive hiring intentions despite a slow growth business environment. Employers are more subdued in Western Europe where there is more uncertainty as elections are set to happen through the year,” said Jonas Prising, Chairman & CEO of ManpowerGroup.
“Having seen the surprising election results in the UK and US in 2016, European businesses know to expect the unexpected. Even in countries where hiring intentions are positive some employers are experiencing challenges finding individuals with the most in-demand skills. We are seeing the emergence of a Skills Revolution, where helping people upskill and adapt to a fast-changing world of work will be the defining challenge of our time.”
UK Prime Minister Theresa May outlined her negotiating stance for Brexit on January 17, which included a rejection of the Single Market and an end to the free movement of people. This position will result in a so-called “hard Brexit.”
Having seen the surprising election results in the UK and US in 2016, European businesses know to expect the unexpected
The loss of passporting rights following Brexit is one of the biggest fears in the City of London and seems almost a certainty under May’s “hard Brexit” plan. Passporting rights allow finance and professional services firms to sell services across the EU from the UK using a local licence.
If the passport is taken away, London could cease to be the most important financial centre in Europe, costing the UK thousands of jobs and billions in revenues. Around 5,500 firms registered in the UK rely on the European Union’s passporting rights for the financial services sector, and they turn over about £9 billion in revenue.
Much of the focus has been on the impact on global investment banks, with banks such as Citigroup, HSBC and JP Morgan signalling job moves to continental Europe from London.
Mark Cahill, managing director of ManpowerGroup UK, said in another statement to the Financial Times: “With huge uncertainty surrounding sectors like banking and financial services — critical to the economy in London and Edinburgh — it’s no surprise that confidence in these regions is suffering.”
Amsterdam in the Netherlands is shaping up to one of the favourites for corporates relocating in the event of Brexit. In fact, employers in the Netherlands are continuing “to report cautiously optimistic hiring plans, fuelled by an upbeat forecast in the Finance & Business Services sector,” according to Manpower.
Employers in France, another country tipped to take business from London, “expect modest hiring activity in the coming quarter, except for the Construction sector where employers report the strongest Outlook in more than 10 years.” However, overall, hiring outlook is just at 2% growth for France.
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