With Boris Johnson’s “do or die” Brexit day now come and gone, companies both on the British Isles and on the continent still have little clarity as to what they should expect with regards to the future of doing business between the UK and the EU. But despite early suggestions that leaving the European Union would endanger London’s status as a global financial hub, there is little to suggest that banks have begun a mass exodus in favor of continental bases.
Statistics collected from online professional profiles suggest that headcounts at major banking firms have yet to begin to decline. In fact, many firms have continued to add employees in the UK. Some notable growth stories include HSBC–which recently opened a new division based in Birmingham that will focus on the firm’s UK operations post-Brexit–and Goldman Sachs.
One exception to this trend is Barclays, which as in fact reduced its UK headcount by just over 5% since last year. However, it’s not clear that this development is directly related to Brexit planning, as the firm announced layoffs across the board over the summer, and given that Barclays is a British bank, it is to be expected that these would largely affect UK employees. Looking at country headcounts as a percentage of global ones, it appears that this may be the case. At Barclays and its peers, the percentage of the total workforce employed in the United Kingdom has remained largely unchanged.
So, it looks like banks aren’t adding jobs in continental Europe as expected? Well, that’s not true either. They have been filling positions across Western Europe, albeit not at breakneck pace.
Headcount Growth (September 2018-2019)
|HSBC Holdings PLC||4.30%||4.27%||17.61%||8.80%||5.57%||1.55%||5.74%|
|The Goldman Sachs Group, Inc.||11.23%||17.16%||7.06%||5.00%||7.04%||10.80%||11.10%|
Barclays stands out as having shifted focus to Ireland, but this is due in part to the fact that it had a smaller presence in that country to begin with. In absolute terms, both HSBC and Barclays added about 60 heads in Ireland.
Of those who have been hired at Barclays, it has been a small number of VPs and Associates, with some operational staff to accompany the office expansion.
Barclays Expansion in Ireland (by Role)
|VP Financial Services||7||18||157%|
|Associate – Financial Services||6||13||117%|
|Assistant Vice President||9||12||33%|
Across the board, it seems as though firms are expanding somewhat cautiously, moving relatively small numbers of heads (as compared to total headcounts across the region) and spreading those moves out across a handful of popular alternatives, rather than making any large, opinionated moves.
Another prediction after the 2016 referendum was that Britsh and American banks entrenched in London might lose market share to their counterparts on the continent. It seems that some of those counterparts have been increasing headcounts in anticipation of this opportunity. In particular, major French banks BNP Paribas, Crédit Agricole, and Natixis, have increased the size of their workforces over the past 12 months. Their growth hasn’t been limited to France, either. Headcounts have increased across Europe, including a significant uptick in the UK, suggesting they want to continue their operations in the UK post-Brexit.
Headcount Growth (September 2018-2019)
|BNP Paribas SA||2.32%||3.57%||13.00%||12.33%||4.09%||-2.29%||2.19%||16.14%||8.19%||2.32%||1.16%|
|Crédit Agricole SA||2.15%||3.33%||0.28%||16.87%||1.44%||21.62%||-1.69%||6.22%||3.65%||-0.06%||10.23%|
It seems that adjusting to a post-Brexit world won’t be as simple as moving everyone to Paris or Frankfurt, and even if firms decided to do so, the shift couldn’t possibly happen overnight. Deciding where to put employees is more complex than simply signing a lease for more office space. There are a multitude of questions that must be answered. Are there enough people with the right skills for these positions located elsewhere in Europe? Or will there be enough current qualified employees willing to relocate to areas where they may not know the local language and which may not offer the same lifestyle as London? Until it’s more clear what impact Brexit will truly have, it looks as if financial institutions will have to keep workforces in both places, which is likely to increase the cost of doing business, and potentially, the cost to consumers and businesses to access financial services in Europe.