Highly skilled EU nationals consider Brexit of their own

04 October 2017 Consultancy.uk

With Brexit negotiations continuing to cast doubt over freedom of movement between the UK and Europe, young, well-educated and high-earning EU nationals are the most likely group to be planning to return to the mainland, according to a new report. As many as 10% of EU nationals with post-graduate degrees, who earn above £50,000 a year are considering the move, creating the potential for a large talent shortage for employers, and placing a strain on public services such as the NHS.

The decision to leave the EU has created considerable consternation across a broad section of British society. A tumultuous negation period, hamstrung by a period of political uncertainty following June’s election, has delivered an environment of considerable anxiety for both EU-migrant labour, and the business community dependent on their skill sets to create wealth. With ‘hard Brexit’ still very much on the cards, along with a much-feared ‘no deal’ scenario, either of which could scupper free movement and trade between the UK and the mainland, the triggering of Article 50 in March 2017 may lead to various undesirable outcomes.

The brain drain

Recent analysis indicates that a serious shortage of workers in various unskilled sectors may be on the horizon, with manufacturing due to take a substantial hit, while a new KPMG report, titled 'The Brexit Effect on EU Nationals', highlights that, even in a scenario where skilled workers are still able to enter the country, there may be an exodus of young, highly skilled workers. The UK media has extensively documented lone cases of skilled migrants being hampered by disparaging attitudes and economic uncertainties, with many high-profile cases now suggesting a major ‘Brexodus’ of talent from the nation is likely.

KPMG’s report similarly aims to exemplify just how wide-spread this sentiment is, and whether the remaining migrants will want to jump through the hoops and make the move to the UK following the Article 50 outcome. Representing the 2.4 million EU nationals working in the UK, or 8% of the working population, less than half of KPMG’s 2000 strong sample said they had definitively decided to stay. Around 45% responded that they will remain on the British Isles, while 8% confirmed they are planning to leave, and a further 35% say that they are undecided or considering leaving.

Higher income earners most at risk of leaving

The study notes that young people in particular are most likely to be leaving – perhaps as a result of having invested less time in building lives and or families in the UK. 11% of 18-24 year olds and 9% of 25-35 year olds say they have made up their minds to leave. The latter group is also the most likely to say that they are considering relocating to the mainland, at 39% of respondents.

Commenting on the result, Mark Essex, Director of Public Policy at KPMG, said, “After Brexit, UK plc will need to go on a charm offensive to keep attracting the brightest and best. Our survey shows that EU nationals in the UK place greater value on being part of a welcoming society than any financial advantage they may gain from working here. For employers, fostering an open and diverse culture is as important as their staff’s take-home pay.”

Those with higher qualifications

The research also found that, of the 2,000 EU nationals working in the UK who were surveyed, those with higher incomes were the keenest to leave, both in terms of planning to do so and in terms of being undecided/considering it. 12% of the £100,001 - £200,000 group, who are also likely to find relocation the easiest thanks to their substantial income, indicated they are planning to leave (43% considering), with the £50,001 – £100,000 group only slightly behind on 10% (42% considering). The lower income groups, those on £15,001 - £20,000, were less likely to be planning to leave, at 6%, while 27% say that they were considering it.

Brain drain

The study also noted a higher prevalence among the well-educated to be planning to leave, or considering it. 7% of those with undergraduate degrees said that they are planning to leave, while 33% of the category were considering the move. Post-graduate degree holders are the most likely to do so meanwhile, with 10% planning to leave and 39% weighing up their options on the matter. Doctorate holders are slightly more reserved about their plans, with only 5% saying they plan to leave – and again this may relate to the higher average age in holders of a Doctorate, which potentially means they have also spent more time settling in the UK, and would therefore find leaving more difficult.

Sector breakdown by those leaving or considering leaving

Employers in various sectors, according to the report, may need to carefully assess their retention and recruitment strategies, with the research finding that most high-skill sectors are exhibiting uncertain respondents. The NHS has been widely reported as facing a growing crisis in staffing, and the report suggests that this is likely indeed, with 41% of European healthcare professionals considering leaving the UK. However, with technology becoming increasingly integral to private and public sectors, including healthcare, the figure considering leaving the UK in IT is just as worrying. 

53% of respondents in the IT sector stated that they are considering or planning to leave, while 50% are in the same boat for businesses services and law. 42% of financial services respondents may end up leaving the post-EU UK, echoing earlier estimates that a coming ‘Brexodus’ may see Britain lose around 40,000 investment banking jobs.

Commenting on the effect on employers, Punam Birly, Head of Employment & Immigration Legal Services at KPMG, said, “Our survey reveals a potentially serious situation for employers who have relied on EU staff: if we focus in on the younger talent and the higher-income levels, that’s where the real concern is. We see that the young have far less that ties them here and that those with higher qualifications are also seriously thinking about developing their career elsewhere.”

Regional drains

The brain drain is projected to hit Scotland and London the hardest, with 46% of those surveyed in the areas leaving or considering it. Wales too is seen as a relatively unenticing to 44% of respondents, while Northern Ireland has a slightly better outcome of 39%. The South West meanwhile has a higher projected retention rate, with 32% saying that they are planning to leave or considering it, with the North East following at 33% in the two categories.

“At this stage, EU citizens in the UK don’t appear to be paying much attention to government proposals. They know it’s an opening move and are waiting to see something more concrete. What they want to hear right now are warm words just as much as hear the government’s practical proposals,” concluded Birly.

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