In a further extract from the Odgers Berndtson Report on ‘Brexit, Business Leaders and Investment’, David Webber, Head of Odgers Berndtson’s EU Practice, provides the all-important perspective from Brussels. How is Brexit affecting business thinking and planning at the heart of Europe?
Belgium is the UK’s fifth biggest trading partner, sparking much discussion here about the impact of Brexit. Furthermore, according to PwC, it ranks fourth as the country likely to be hardest hit.
Big global firms building capacity in new European hubs
So far, however, the impact is less in industry and manufacturing, than professional and business services. Unlike much of the rhetoric you hear in the UK, I don’t think there will be as much opportunity for UK businesses unless they package themselves as European.
Big professional services firms like Deloitte, EY, and KPMG, over the last twelve to 18 months, have opened major new offices here, as new international hubs. They’re far too big for a country the size of Belgium. They’re clearly looking to use these to service a number of different European countries.
I’ve seen a number of businesses, mostly in consulting, recognizing there will be a different environment after Brexit. Their UK base will then not be within the EU and they realize they may need to provide a different level of service.
So, at one level, Brexit is a catalyst for many professional services firms to expand. For instance, we’re working for a UK consultancy in Belgium, France, Germany, and Italy to identify and recruit new talent to grow their business.
London, or not?
Beyond this, many professional services firms have built up presences primarily in London and those key operations service most of Europe. Some now wonder whether, post-Brexit, European clients will be so willing to come to London for business and professional services, rather than access them locally.
Also, regulatory challenges around things like data protection – putting conditions around holding data on EU citizens – may require European clients to use EU-based providers. Many firms now recognize that, if they want to service clients across the EU, that’s where they need to have their European baseFor other sectors, such as aviation, there will be operational requirements that require them to have an EU headquarters.
At the same time, we’re seeing a high degree of interest from European professionals based in London, looking for opportunities in continental Europe. I have a lot of inquiries from French, Italians, and Germans in the UK. They’re looking for opportunities in Brussels and staff in consultancies happy to move out of London.
I haven’t had, unlike in previous years, non-UK nationals saying “I’m open to an opportunity in the UK”. We supported a London-based search earlier this year where candidates based in Brussels said they could not consider the role, given the uncertainties over their long-term status in the UK.
EU lobbyists favored to represent big companies
Brussels is also the center of EU affairs, and one of the biggest challenges businesses are coming up against now is how are they represented after Brexit. Especially if there is to be a hard Brexit.
If you are a British bank for instance, how will you be represented here to German politicians, French politicians, European Commission officials and so on? Accordingly, they’re thinking carefully about who will speak on their behalf. The same holds true for trade associations. We have 3,000 in Brussels and many are looking at their own representation. I know a few with British leaders who have been looking to change their leadership to non-UK nationals.
Lobbying is interesting because it’s always been a very Anglo Saxon business model. There’s been a very high percentage of UK firms and UK people within them. The Brexit decision has created an opportunity for non-UK firms. For instance, there’s a new entity from Sweden running a very transparent, inclusive operation. Already, in the first few months of this year, they’ve moved their office here and are winning lots of new accounts.
So Brexit seems to be giving everybody an excuse or reason to try something different. Not forgetting the get-out clause: if it fails, just blame it on Brexit!
These insights by David Webber, Head of Odgers Berndtson’s EU Practice in Brussels, are part of ‘Brexit, Business Leaders and Investment’, a major report from Odgers Berndtson. As leaders in global executive search, across multiple functions and sectors, we have a unique perspective that comes from being close to top executives in almost 30 countries.
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