UK tech sector good but banking hit as Brexit effect continues

The UK’s technology sector is continuing to defy the headwinds of Brexit, while financial services centres in Europe are picking up the slack as UK financial services companies have begun to move jobs out of the UK.

According to analysis by professional recruitment firm Robert Walters, the UK continues to be the leading country in Europe for candidates with IT skills, with the number of roles advertised in the tech sector increasing by 11% between 2016 and 2018. Digging beneath this overall figure, Robert Walters says that tech hubs outside London are growing at three times the rate as London, with job creation in Manchester up 29%, 22% in Leeds and 20% in Birmingham. The firm says it expects a further 11% increase in job creation this year. 

Ahsan Iqbal, director of IT at Robert Walters, said: “The UK tech sector is continuing to grow strongly and we expect that to continue. It is not one that is overly dependent on supply chains and is a genuinely global sector, so it appears to be largely unaffected by Brexit.

“London has what is probably the best pool of talent in the world in terms of tech, and will continue to thrive and lead in this area. However, we are seeing a rebalancing in terms of regional centres such as Manchester, Birmingham and Leeds growing even more strongly in terms of tech jobs, which is a good thing for the economy.”

In contrast to the tech sector, Robert Walters says that despite London continuing to have the highest level of banking and finance talent in Europe, other financial centres across Europe are benefitting at London’s expense, with the big winners being Zurich, Frankfurt, Paris and Madrid.

James Murray, director of financial services at Robert Walters, said: “Financial services is busy in centres such as Frankfurt and Dublin. However, in terms of the numbers of jobs that have moved, it is still extremely low when compared to the overall London financial services market.”

Murray said the jobs that are moving to Europe are in risk management, finance and compliance. “Institutions need to have a high level of infrastructure ready in case they need to pull the triggers on contingency plans and more activity more quickly.”

David Leithead, chief operations officer at global professional services company Morgan McKinley, told Recruiter that “a lot of the bigger firms had already acted on Brexit and made quite a lot of changes”. In particular, he explained moves by banks to relocate their legal entity to Europe had meant that “some jobs have gone as well”. He said “the classic examples” of cities that have benefitted are Paris, Frankfurt and Dublin, but also quite a lot to countries like Poland, although he added the migration of jobs to countries such as Poland was part of a general trend for banks to offshore their back office functions. “It is a bit of a mixture,” said Leithead.

At the beginning of the year, professional services firm EY estimated that 7,000 jobs would have moved out of the City by March in order to set up their post-Brexit subsidiaries that would ensure most of the business currently administered out of London will be provided seamlessly from new locations. This is far short of other forecasts, notably by international management consultant firm Oliver Wyman, which predicted that as many as 75,000 jobs could be lost. 

However, Leithead said the picture was not all doom and gloom, and London “remains a strong centre for the finance industry, and there is reason to suppose that won’t continue”.

“It is also a major centre for the fund management industry and the insurance industry, and those sectors employ a huge number of people in the City as well. So London remains very strong regardless of whether some positions have moved abroad.”

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