UK’s attractiveness as offshore talent hub rises after Brexit

03 August 2023 Consultancy.uk 4 min. read
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The UK is looking to challenge the likes of India and China to become king of the call-centres, as it uses its exit from the EU to provide favourable conditions for companies seeking to build offshore talent hubs. A new study suggests the UK’s reputation for technological innovation and tax policies make it the foremost offshore economy in Europe.

Offshore recruitment is a process in which companies hire people from other countries to work for them. The main reason behind this process is to cut down on the costs of hiring people from their own country. Hiring offshore employees can significantly reduce costs in infrastructure equipment and employee salaries – while also cutting back on expenses relating to tax and regulatory responsibilities.

Due to this, offshore hubs have typically been dominated by emerging economies. Indeed, a new study from Kearney suggests that thanks nations with fewer worker rights and lower pay like India, China, Malaysia and Brazil still lead the way for offshoring operations – while lower tax burdens also make them attractive destinations for employers looking to downsize their costs by shipping off work that can be done remotely.

UK’s attractiveness as offshore talent hub rises after Brexit

This year, however, there is a new contender rounding out the top five. After the country’s exit from the EU, the UK is slashing taxation and red tape – while hosting a bonfire of workers’ rights – to attract offshore investors. And thanks to the country’s reputation for technological investment and prestigious higher education system, it seems to be working.

Examining the world’s leading offshore nations across four sets of criteria, Kearney found that India still has an unrivalled combination of ‘financial attractiveness’ and talent availability – thanks largely to it hosting a large and skilled workforce at a low cost – which form a base that sees it remain the best offshore hub in the world. China followed, with an even greater range of skills and availability thanks to long-standing higher education ties with economies like the UK.

Since 2021, however, Kearney found that the UK itself has become significantly more attractive as an offshore talent hub. While it still hosts higher wages than many other countries in the upper-echelons of the list, its financial attractiveness is three-times that of the US as an offshore hub, as it moves to create favourable tax laws to attract investors. At the same time, the UK’s people skills and availability is almost the same as India’s – there may be fewer residents, but a higher portion of them have access to the training offshore clients are looking for. This means in contrast to the likes of Brazil and India, the UK has a much better rate of talent regeneration, to keep up with digital demand.

UK’s attractiveness as offshore talent hub rises after Brexit

And, due to the UK’s remaining status as a global financial hub, and a booming technological hub, it has a vastly more attractive business environment for investors. The UK’s tech sector has become an £800 billion economy in recent years, trailing only the US and China, according to Kearney. Fuelling this is one of the strongest ecosystems in Europe. All this has helped the UK climb into the top five of the offshore rankings – three positions higher than its position in 2021.

Ramyani Basu, Kearney’s partner in digital transformation, commented, “Digital skills of the labour force and digital outputs of business activity are increasingly becoming key differentiators of a country’s performance. The UK’s climb up the ranking is partly due to its heavy investment in digital training, newly announced government programmes and funding for businesses which have helped boost its talent regeneration potential.”

Looking ahead, the UK’s current trajectory suggests it could rise higher in the rankings, too. Earlier in 2023, the government announced it would invest £100 million in funding for its Foundation Model Taskforce responsible for accelerating the UK’s capability in rapidly-emerging types of artificial intelligence – part of the UK's ambition to be a science and technology superpower by 2030. This could boost to a sector that already employs 3 million UK workers, while the government is attacking their rights to organise for higher pay – potentially driving down salaries further in line with the countries currently leading the way as offshore talent hubs. Next stop: the sunlit uplands.