Brain-drain? It’s nothing but a blip
Lots of City workers are heading for Dubai at the moment, but don’t worry: London will lure them back soon, says Max Orbach
We all know somebody who has re-located to Dubai, Singapore or even Moscow in the last few months, as the British economy has wobbled, house-prices have fallen and inflation has risen. While British markets continue to take a battering, jobs in emerging markets are starting to become more attractive, with their low rates of tax and a cost of living that is cheap – at least compared to London.
The credit crunch has already claimed more than 80,000 finance jobs globally and laid-off workers who were not offered a transfer are beginning to take calls from financial companies with operations abroad, recruiters say.
Jeanne Branthover, head of the global financial services practice at recruitment firm Boyden Worldwide, says: “I’ve spoken to people who three or four years ago literally refused to relocate. Now they’re open to moving. They do not see growth or change in this market in the near future.”
Recent activity at Branthover’s company is telling. Boyden’s revenue from placing people in finance jobs was about flat, globally, in the first quarter of 2008. But its placement revenue in Russia was up 73 per cent, and in China and Dubai, they were each up more than 300 per cent. In New York, where the market is nearly frozen, revenue from finance job placements was down 24 per cent.
JPMorgan Chase is continuing to hire overseas even as it whittles its London base. The commodities trading group has hired 126 people in the last year, of which 85 are based in emerging markets like Singapore and Hong Kong.
Add this to the scares about nondoms relocating abroad if the capital gains tax goes up, and the fears that the government’s friendly attitude towards foreign workers might be less pressing than their need to raise tax in a downturn, and a full-scale brain-drain could be on the cards. If you are looking for good staff at the moment, you might be forgiven for worrying. Are there any good people left in London?
The message is that, while it might be bad now, it won’t stay that way. True, the market is hardly awash with talented people looking for a job right now, and many firms are holding tightly on to their high-achievers at the moment, but not everybody who has lost their job is packing a suitcase. Most in the recruitment industry say that London will always be the first choice for an ambitious financial services professional.
All the things that make London a world centre are still there: the position on the meridian that means we can trade with Asia and America, the London Stock Exchange and the light touch regulation. And people with children are not likely to just up sticks and jet off at the first sign of a nifty relocation package.
Monima Wardle, managing director at recruiters City Analytics, says that this drain is a blip. “I remember a similar thing happened during the last recession in the early 1990s – but working in emerging markets is just not the same. When the London market picks up people taking jobs in places like the Middle East are going to be seen as damaged goods because the skills are different,” she says.
“People tend to go out there and enjoy the ex-pat lifestyle – things like drinking their managers under the table every night. But the pressures and demands are very different to being a fund manger in the UK. It’s really all smile and dial out there.”
In other words, anybody with any ambition will be heading back to Blighty after a short sojourn soaking up the sunshine and lining their pockets. As soon as things turn around here, they’ll be back.
The message to recruiters is, as that great sage and philosopher Corporal Jones used to tell them on Dad’s Army: “Don’t panic”.