The official Brexit deadline is on the horizon
The official Brexit deadline is a whisker away, and across the UK businesses are taking on a hunted look as the Government still tries to thrash out a plan. With very little certain, companies trying to hold onto technology talent have a lot to lose.
The uncertainty over Brexit has shaken the tech industry over the last couple of years. Technology companies rely heavily on overseas workers. VC firm Atomico surveyed 5,000 tech workers across Europe late last year and found that 44% of founders and employees at tech startups in the UK are migrants.
Its survey found that UK founders were haemorrhaging tech talent to overseas countries as workers grow increasingly nervous about Brexit. The supply of workers from overseas was also slowing. Other EU countries were more able to attract tech talent than before, while UK founders were less successful in getting tech talent from the EU.
The UK Government’s Tech Nation 2018 report found that access to talent continued to challenge tech communities in 83% of clusters across the UK. Brexit was the third most cited challenge among London startups. The talent shortage was the first. The two challenges are inextricably linked.
Brexit creates two big staffing problems for tech companies. The first is keeping the talent that they have. As it stands, EU workers in the UK who will have been living in the UK for at least five years by the end of 2020 would be able to apply for ‘settled’ status in the UK under Brexit, but the logistics and the Government’s ability to meet its processing deadlines are far from clear.
The second problem is acquiring new talent from the EU. Many EU workers wouldn’t be eligible to work in the UK after Brexit under proposals from the Migration Advisory Committee, according to the Institute for Public Policy Research (IPPR). Up to 30% of EU migrants could be blocked from information and communication jobs, and up to 25% from jobs in the finance sector, the organisation has claimed.
There are other problems, too. The fall in the pound and the uncertainty around the UK economy after the referendum have made it a less appealing location, as has a rising atmosphere of Brexit-spawned xenophobia.
These factors all have a chilling effect on current and would-be migrants from the EU and fuyrther afield. Cherry Freeman, CEO at social network LoveCrafts, said in a Tech Nation 2018 roundtable that she was already losing employees in the run-up to Brexit because they didn’t feel welcome in the country.
Taavet Hinrikus, CEO of fintech firm TransferWise, is joining others such as LoveCrafts in opening additional offices across the continent to mitigate Brexit risk. "Roughly 50% of our London office were not born in the UK," he pointed out in the Atomica report.
What can be done? The government has made some attempts to placate the tech industry, removing healthcare workers from a capped allowance of Tier-2 visas that it awards to skilled workers. This will free up some more space for technology workers to come to the UK. However, this is unlikely to be enough on its own.
This spring, the UK government will also offer a Start Up Visa to entrepreneurs wanting to start companies in the UK. The Centre for Policy Studies would go further. It has proposed a ‘unicorn visa’ to help fast-growing tech companies to quickly source skilled tech workers to help shore up the tech industry, but this will leave companies that don’t meet its strict criteria floundering.
None of this will really help the majority of non-trendy, non-scale-up, non-tech companies trying to figure out where their next Cisco Certified Internetwork Expert or Microsoft developer is coming from. For those firms, the hiring outlook is pretty grim. On the other hand, the market for outsourcing and managed services firms who can handle those companies’ technology requirements using fewer people looks better than ever.
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