24 Jul 2018

Can the UK tech sector beat the Brexit skills drain?

Despite continuing solid investment in the UK tech sector, Brexit offers real threats if it reduces the flow of international specialists needed to grow the UK digital economy. Mike Drew, Head of Odgers Berndtson’s Global Technology Practice, shares his insights.

In the technology sector, we are starting to see more gaps opening up in organisations because people are leaving the UK. It’s not happening en masse, but I can point to specific examples. As we get closer to Brexit and the prospect of leaving the European Union becomes more of a reality, these departures may gather pace.

Organisations definitely need a strategy for succession planning, because certain skills are really hard to find, and some specialist roles can only be filled from outside the UK. The UK doesn’t always have the depth of talent needed, especially in emerging fields like artificial intelligence, deep learning and data science, or even highly technical roles like developers. Many specialists in these areas have come from Eastern Europe or India. They represent a valuable pool of talent that, as a result of Brexit, the UK risks reducing substantially. This will create a real issue for the economy unless there are sufficient replacements.

Is the UK a long-term prospect?

Brexit has created a level of uncertainty which wasn’t there before. No-one knows how this is actually going to end. That does affect hiring because it gives organisations pause for thought. They start thinking more about how much they really need the new hire. Should that post be based in the UK, or could it be based elsewhere and, if so, where? Both employers, and also employees, are stopping to think about whether the UK is a place for them in the long term.

Many companies are making short-term decisions, which will impact the UK’s ability to be competitive in technology in the longer term. We haven’t yet seen a great deal of retraction or change in strategy by big employers in the technology industry. Rather, a number of examples of employers are saying to us that non-UK residents who they employ in the UK are starting to leave.

One software organisation has had three of its senior technical people resign within four weeks due to the uncertainty of Brexit. That’s an example of where employees feel they can’t commit their futures to the UK because they don’t know if legally they’ll be able to stay, or if their families will feel welcome, now that sentiment has changed. I think that the weaknesses that will come from all of this will be felt in the years to come.

UK status as European tech hub in question

When you look at the technology hubs around the world, Silicon Valley remains number one, closely followed by Asia, which has really been an emerging technology environment. Between the two, sits the UK, often used as a launch pad to expand into Europe.

“Europe increased its share of tech investment to 980 projects in 2016. A ten-year high and 9% increase on 898 projects in 2015.”

Traditionally, technology companies have evolved here in the UK, and it’s created a good talent pool across most areas. But Brexit opens the door for other countries like the Netherlands, with a lot of similarities. The Dutch speak excellent English and are culturally not too dissimilar to the Brits and Americans. What’s more, they are located in mainland Europe, with good travel hubs, and so on. It could become a very viable alternative base.

Investment up, for now

Ironically, in the short term, however, investment in UK technology companies has increased since the Brexit vote. So, you could argue that North American companies haven’t necessarily reduced their commitment to the UK. There is more investment in UK companies, which is fantastic. The negative, however, is that these technology companies will need more people to grow. If they can’t find the skills in the UK, they may relocate.

“Technology companies will need more people to grow and if they can’t find the skills in the UK, they may relocate.’’

So, if post-Brexit, the UK doesn’t have a structure to enable these companies to recruit people from other countries, welcome them into the UK and give them skilled jobs in technology, the long-term growth of the sector and its importance to the UK economy will suffer.

I do think there is an opportunity for the UK to become a very strong digital economy and be attractive to many countries, but we must lay the right foundations now.

These insights by Mike Drew, Head of Odgers Berndtson’s Global Tech Practice, 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.

Download the full report

To explore more of our perspectives on Brexit, click below: